Latest news with #RanchoCucamonga
Yahoo
9 hours ago
- Business
- Yahoo
Corporate Cash Levels Are Starting to Fall
(Bloomberg) -- The latest earnings period brought what might be an early warning sign about credit quality for high-grade US companies. Next Stop: Rancho Cucamonga! Where Public Transit Systems Are Bouncing Back Around the World ICE Moves to DNA-Test Families Targeted for Deportation with New Contract US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. Cash levels at blue-chip companies are shrinking, when excluding results from the most-cash-rich corporations. Among members of the S&P 500 that have posted results, cash levels for the latest quarter fell nearly 1% compared with the last three months of 2024. That's according to a Bloomberg News analysis that focuses on non-financial companies with less than $30 billion of cash. The group's cash holdings, now at $1.14 trillion, have broadly been declining since the third quarter of 2023, when they peaked at $1.21 trillion. While companies are still generally performing well, shrinking cash levels can be a sign of business slowing and profits falling. That's a particular concern now as escalating trade wars potentially boost the cost of foreign inputs, weigh on profits, and increase inflation. Bond prices for many US companies leave little room for error. Spreads, or risk premiums, on US high-grade corporate debt averaged just 0.85 percentage point on Friday, the tightest level since March. The average level for the last two decades is closer to 1.5 percentage point. 'It's actually a dangerous position to be in,' said Michael Contopoulos, deputy chief investment officer at Richard Bernstein Advisors. 'If you bring down cash balances and you find yourself having to deal with higher inflation and higher volatility, your debt is going to get punished.' For the biggest cash generators, the story is different. Giants from Meta Platforms Inc. to Microsoft Corp. and Nvidia Corp. generally posted strong earnings this quarter. The top 12 biggest holders of cash saw their holdings rise about 1.4%, to around $756.7 billion. The dozen companies, which also include companies outside of the technology industry like Johnson & Johnson, each have more than $30 billion of cash and marketable securities on their books, and hold in total about 40% of the S&P 500's cash. The biggest companies can distort averages, and by some measures many high-grade companies aren't looking great. Leverage levels, for example, have been better about 80% of the time over the last two decades, a UBS Group AG analysis found. But by other measures companies are still performing well. Investment-grade firms are holding more cash as a share of their assets than they have on average over the past decade, according to data from S&P that analyzed North American companies. It's likely the behavior that has contributed to the declines in cash — such as boosting share buybacks — has reversed this quarter as companies prepare for a slowdown, Bank of America credit strategist Yuri Seliger said. That's why some money managers are stopping short of saying that it's time to prepare for the worst. 'You still want to be positioned in companies that have the ability to weather a range of scenarios, but at the same time, I don't think you want to price your entire portfolio to the worst possible outcome,' said Maulik Bhansali, senior portfolio manager at Allspring Global Investments. If any credit weakness were to hit, it would likely start with smaller companies, and in leveraged finance or even private credit, said Matthew Mish, UBS' head of credit strategy. A close look does show some signs of weakness, at least in the smaller firms. Corporate profits for domestic, non-financial companies declined by about 3% in the first quarter compared to the previous period, Bureau of Economic Analysis data shows. 'The large liquid megacaps have certainly outperformed,' Mish said. 'Under the hood, there certainly is a little bit more weakness.' Week In Review Elon Musk is selling $5 billion of debt to help fund his artificial intelligence startup xAI Corp., the latest in a series of fundraising efforts across his business empire as the billionaire pivots away from politics and returns to running his companies. As part of that bond and loan sale, xAI opened its books to investors, showing the company generated about $52 million of gross revenue in the first quarter, and lost $341 million before interest, tax, depreciation and amortization. The sale may be complicated by a very public feud between Trump and Musk. Hong Kong developer New World Development Co. is sliding deeper into distress after its recent decision to delay interest payments on some bonds, marking the latest flashpoint in a years-long crisis in China's property market. Hedge fund founder George Weiss filed personal bankruptcy months after a federal judge ruled he's liable for more than $100 million in debt his eponymous firm owes Jefferies Financial Group Inc. JPMorgan Chase & Co. is sounding out investors for an almost $2 billion loan for Trucordia, the latest instance of a Wall Street bank refinancing debt that insurers initially secured from private credit firms. A group of Wall Street banks, led by Jefferies Financial Group Inc. and UBS Group AG, have started pre-marketing more than $1 billion of debt to fund Bain Capital's acquisition of restaurant chain operator Sizzling Platter. Owens & Minor, a distributor of medical supplies, canceled its planned purchase of Rotech Healthcare Holdings, sending its bonds on a wild ride. Notes it sold in April, with a 10% coupon and due 2030, dropped, because they can be redeemed at par and had been trading above face value. Many other securities the company had sold rallied. Banks and private credit funds are competing with each other to provide as much as €2.5 billion ($2.9 billion) of debt to insurance broker Diot-Siaci Group. Clearlake Capital-backed Wellness Pet Company snagged fresh financing and completed the first step of a debt deal that involves creditors taking a reduction in the value of the original amount they lent. German autoparts maker ZF Friedrichshafen AG pulled in more than €4.5 billion ($4.6 billion) in orders for a new bond sale, signaling strong investor support for shoring up its finances during a rocky stretch for the sector. Delta Air Lines Inc. sold $2 billion of investment-grade bonds Thursday to help repay a government loan it took out during the pandemic to pay employees. A $2.15 billion leveraged loan has been launched to help fund the planned acquisition of Colonial Enterprises Inc. Bankrupt genetic analysis company 23andMe will hold a second auction for its cache of DNA data with an opening bid of $305 million from a group led by the company's former chief executive officer, Anne Wojcicki. A subsidiary of Sunnova Energy International Inc. filed for bankruptcy in Texas as its parent struggled to convince creditors to give it funding to turn around its business in an out-of-court process. EchoStar Corp., the wireless and pay-TV operator controlled by billionaire Charlie Ergen, has decided to skip interest payments on three bonds after skipping another late last week. On the Move MUFG Securities Americas Inc. has hired two longtime leveraged loan bankers — Adam Hoffman and Roger Gilbert — as it continues to grow that business. Hoffman joins as head of loan trading while Gilbert will serve as head of loan sales. Both previously worked at Macquarie Group Ltd., which shuttered its US debt capital markets arm earlier this year to focus on private credit. Lane42 Investment Partners founder Scott Graves is building out his senior leadership team, hiring former CVC Capital Partners and Oaktree Capital Management employees to add to the asset manager he founded earlier this year. London-based hedge fund Redhedge Asset Management LLP has hired two portfolio managers amid growing US investor interest for European credit. Won Choi joined from Maven Investment Partners to oversee credit opportunities and special situations. Nick Campregher, formerly at ExodusPoint Capital Management, started last month and is focusing on financials. Before moving to the asset management industry, he had spent about a decade at UBS Group AG as a trader and risk manager. --With assistance from Tom Contiliano. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Is Elon Musk's Political Capital Spent? What Does Musk-Trump Split Mean for a 'Big, Beautiful Bill'? Cuts to US Aid Imperil the World's Largest HIV Treatment Program ©2025 Bloomberg L.P. 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
11 hours ago
- Business
- Yahoo
UK Timeline for US Deal Is Too Ambitious, Ex-Trade Adviser Says
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Next Stop: Rancho Cucamonga! Where Public Transit Systems Are Bouncing Back Around the World ICE Moves to DNA-Test Families Targeted for Deportation with New Contract US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. Prime Minister Keir Starmer would need President Donald Trump to be 'extraordinarily generous' to meet his ambition of finalizing the UK-US tariff deal in two weeks, according to Britain's former top trade negotiator. Crawford Falconer, who led British trade negotiations until late last year, cast doubts on the UK government's efforts to settle remaining issues within a fortnight. While Starmer and Trump announced the so-called Economic Prosperity Deal to great fanfare in early May, numerous details have yet to be finalized. 'My assumption is that they're expecting the US to be extraordinarily generous and understanding toward them,' Falconer told Bloomberg News. 'Because otherwise I think it would take longer than two weeks.' That assessment will come as a blow to Starmer as he tries to seize on the UK's status as the first country to agree to a trade deal with Trump this year. On Tuesday, the White House ramped up the pressure, giving the UK five weeks to resolve outstanding issues or risk a doubling of US tariffs on British steel and aluminum imports to 50%. Trump's tariffs are already weighing on the UK's beleaguered steel industry, with some manufacturers saying American orders have dried up. Starmer dismissed concerns in Parliament on Wednesday, telling lawmakers he expected a resolution within a 'couple of weeks.' 'The deal we agreed is a good deal for UK steel producers,' the government said in a statement on Friday. 'We will continue to work with the US Commerce Department to implement our agreement as soon as possible so all UK steel producers can start to feel the full benefit.' Key to the deal is Trump's promise to remove all tariffs on British steel exports to the US. Although Trump spared the UK the 50% rate imposed on steel from the rest of the world, he reserved the option to apply it if negotiations haven't concluded by July 9. Remaining hurdles include the Chinese ownership of British Steel, the struggling producer the UK government took over in April. There's also a question about whether the US will require British steel to have been melted and poured in the country. Tata Steel UK can no longer fulfill that provision. It closed down its last blast furnace in 2024 and a new electric arc furnace isn't yet up and running, so the company has been importing steel substrate from abroad. In a statement Friday, Tata Steel UK Chief Executive Officer Rajesh Nair said his company would need to import steel substrate until late 2027. 'It is therefore critical for our business that 'melted and poured in the UK' is not a requirement to access the steel quotas in any future trade deal,' Nair said. British Steel is facing a different set of problems. While the UK government took control of its plants earlier this year to prevent them closing, the company is still legally owned by China's Jingye Group. The general terms of the UK-US deal say the UK must meet 'US requirements' on the 'nature of ownership of relevant production facilities.' That is widely understood to mean that Trump would not grant preferential tariff rates to a company with connections to a strategic rival such as China. 'They will want clarity on what that means,' Falconer said. 'It's difficult for me to believe that the US will be confident that it would give the green light to Jingye, if it is uncertain about what the actual commercial arrangements are for British Steel going forward.' Finding a buyer for the loss-making manufacturer in the near-term seems unlikely. Meanwhile, fully nationalizing British Steel could bring its own problems, since the US generally tries to avoid giving state-owned entities preferential access to its market. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Is Elon Musk's Political Capital Spent? What Does Musk-Trump Split Mean for a 'Big, Beautiful Bill'? Cuts to US Aid Imperil the World's Largest HIV Treatment Program ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
11 hours ago
- Business
- Yahoo
US Trade Team Said to Extend India Stay as Talks Gather Momentum
(Bloomberg) -- Supply Lines is a daily newsletter that tracks global trade. Sign up here. Next Stop: Rancho Cucamonga! Where Public Transit Systems Are Bouncing Back Around the World ICE Moves to DNA-Test Families Targeted for Deportation with New Contract US Housing Agency Vulnerable to Fraud After DOGE Cuts, Documents Warn Trump Said He Fired the National Portrait Gallery Director. She's Still There. A US trade team that's currently in India for negotiations has extended its stay, according to people familiar with the matter, in a sign talks are progressing ahead of a July deadline. The team, which was initially scheduled to hold talks with Indian officials on June 5-6, will now be staying till Tuesday to continue discussions, the people said, asking not to be identified because the information isn't public. Most of the issues may get finalized within a week, the people estimated. India and the US are working on a phased trade deal with an early agreement targeted for July, the deadline for implementation of the so-called reciprocal tariffs. At the same time, those tariffs are facing legal challenges in Washington. India's Commerce Ministry and the US Trade Representative's office in Washington didn't respond to email requests for comment outside of regular business hours. Local Indian media earlier reported the extension of the visit. Indian Commerce Minister Piyush Goyal described his meeting with US counterpart Howard Lutnick during a visit to the US in May as 'constructive.' Earlier this month, Lutnick said he's 'very optimistic' about prospects for a trade deal between the US and India 'in the not-too-distant future.' India was one of the first countries to begin negotiating a trade deal with the US, hoping to avert President Donald Trump's reciprocal tariffs, which are scheduled to kick in on July 9. --With assistance from P R Sanjai. Cavs Owner Dan Gilbert Wants to Donate His Billions—and Walk Again The SEC Pinned Its Hack on a Few Hapless Day Traders. The Full Story Is Far More Troubling Is Elon Musk's Political Capital Spent? What Does Musk-Trump Split Mean for a 'Big, Beautiful Bill'? Cuts to US Aid Imperil the World's Largest HIV Treatment Program ©2025 Bloomberg L.P.
Bloomberg
3 days ago
- Business
- Bloomberg
Rancho Cucamonga Bets Big on Becoming First US Bullet Train Hub
Rancho Cucamonga, a car-dependent suburb 40 miles east of Los Angeles, is positioning itself to become America's first bullet train hub when Brightline West's high-speed rail line opens in 2028. The private rail line will connect Southern California and Las Vegas, making Rancho Cucamonga the western terminus of the $12 billion project. The city is planning a dense, walkable urban district around its upcoming rail station, transforming the sprawling commuter town into a transit-oriented destination for the millions of passengers expected to pass through annually, contributor Sarah Stodola reports. Success ultimately hinges on Brightline's ability to meet its ambitious deadline and ridership projections. Today on CityLab: Next Stop: Rancho Cucamonga!
Bloomberg
3 days ago
- Automotive
- Bloomberg
Next Stop: Rancho Cucamonga!
Rancho Cucamonga, about 40 miles east of Los Angeles in California's Inland Empire, was made by the automobile. After Interstate 15 opened here in the 1960s, this rural expanse of citrus orchards and vineyards transformed into a commuter town and logistics hub. Families flocked to the single-family homes that replaced farmland, while companies like Reyes Coca-Cola Bottling, flavor maker T. Hasegawa, Frito-Lay, and Amphastar Pharmaceuticals exploited its strategic location at the confluence of three major freeways and the Ontario International Airport. Now this car-based city may be remade by the train. The private rail company Brightline has broken ground on a high-speed rail line between Las Vegas and Southern California, making Rancho Cucamonga the western terminus of its $12 billion Brightline West project. In a full-circle moment, the city was chosen because of its location along the I-15 freeway, in the median of which the majority of the 218-mile track will run.
