2024-03-14 14:34
March 14 (Reuters) - An exchange-traded fund that follows the stock trades of Democratic lawmakers has seen sharp gains since its launch last year, outperforming a Republican-oriented fund, on the back of big bets on megacap technology companies. The $49 million Subversive Unusual Whales Democratic ETF , the ticker of which is a play on the name of former Democratic Speaker Nancy Pelosi, has surged nearly 35% since its launch on Feb. 7 last year. That compares with a 25.8% gain for the benchmark S&P 500 index (.SPX) , opens new tab during the same period and an 18.1% advance in the $12.5 million Subversive Unusual Whales Republican ETF , whose ticker is a nod to Republican senator Ted Cruz. "NANC has outperformed KRUZ because it tilts toward growth stocks and underweights energy," said Bryan Armour, an analyst at Morningstar, adding that the Republican ETF also favored more value stocks. AI darling Nvidia (NVDA.O) , opens new tab makes up near 10% of the Democratic fund, followed by Microsoft Corp (MSFT.O) , opens new tab, Alphabet (GOOGL.O) , opens new tab Amazon.com (AMZN.O) , opens new tab, Salesforce (CRM.N) , opens new tab and Apple (AAPL.O) , opens new tab, which constitute about 27.3% of its assets, according to the fund's website. Meanwhile, energy stocks such as Shell (SHEL.L) , opens new tab, NGL Energy Partners (NGL.N) , opens new tab, ConocoPhillips (COP.N) , opens new tab and Chevron (CVX.N) , opens new tab, that are among the top 10 holdings of the Republic ETF have broadly underperformed the market with some falling year-to-date. The Democratic fund has seen net inflows of $32.8 million year-to-date, according to LSEG Lipper data, while the Republican fund has garnered just $5.8 million. "We are getting large allocations solely based on performance and the story of what these funds represent: the best information from the best-informed crowd," said Christian H. Cooper, portfolio manager at Subversive Capital, which launched both the funds with financial data firm Unusual Whales. Congressional trading has been under growing scrutiny and attracted calls to ban lawmakers from trading. A 2012 law requires lawmakers to disclose their stock transactions as well as that of family members within 45 days. Pelosi's portfolio that includes Nvidia and Apple, is up 84.3% year-to-date, according to Unusual Whales. Republican congressman Mark Green's portfolio is up 126% so far this year, after bumper gains last year, while senator Rand Paul's portfolio fell 6.9%. Total assets of the Democratic fund have grown to $49 million from $6.7 million in one year, while the Republican fund has climbed to $12.5 million from $4.3 million, according to LSEG Lipper data. Another battle brews as Democrats prepare to face the Republicans in the U.S. presidential elections and primaries this year, with the former wresting for control of the House of Representatives and trying to hold on to their majority of the Senate. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/democratic-etf-outpaces-republican-peer-big-tech-bets-2024-03-14/
2024-03-14 13:44
TOKYO, March 14 (Reuters) - The Bank of Japan has started to make arrangements to end its negative interest rate policy at the March 18-19 meeting, Jiji news agency reported on Thursday. A number of major firms this week announced wage hikes above those of 2023, heightening expectations that the rosy pay trends will give the central bank leeway to make the key policy shift. Sources have told Reuters that the central bank will debate the end of its negative rate policy next week if Friday's preliminary survey on big firms' wage talks outcome yield strong results. The BOJ will make a final decision on what would be the first rate hike in Japan in 17 years after reviewing Friday's preliminary wage survey result, Jiji said. Get a look at the day ahead in Asian and global markets with the Morning Bid Asia newsletter. Sign up here. https://www.reuters.com/markets/asia/boj-preparing-end-negative-interest-rate-policy-march-meeting-jiji-reports-2024-03-14/
2024-03-14 13:31
WASHINGTON, March 14 (Reuters) - U.S. producer prices increased more than expected in February amid a surge in the cost of goods like gasoline and food, which could fan fears that inflation was picking up again. The producer price index for final demand rose 0.6% last month after advancing by an unrevised 0.3% in January, the Labor Department's Bureau of Labor Statistics said on Thursday. Economists polled by Reuters had forecast the PPI climbing 0.3%. A 1.2% jump in the prices of goods accounted for nearly two-thirds of the increase in the PPI. Goods prices were driven by energy products, which surged 4.4% after declining 1.1% in January. Goods prices had edged down 0.1% in January. In the 12 months through February, the PPI shot up 1.6% after advancing 1.0% in January. Government data on Tuesday showed consumer prices increasing strongly for a second straight month in February. But economists largely shrugged off the rise, arguing that difficulties adjusting the data for price increases at the start of the year continued to exert an upward bias on inflation. Wholesale gasoline prices rose 6.8% last month. There were also increases in the prices of diesel and jet fuel. But prices for hay, hayseeds, and oilseeds fell as did those for iron and steel scrap and asphalt. Food prices rose 1.0%, amid increases in the costs of eggs and beef. Excluding food and energy, goods prices rose 0.3%, matching January's gain. This suggests that goods deflation, the major driver of lower inflation, was drawing to an end and services would need to pick up the slack in easing price pressure. Services gained 0.3% in February after rising 0.5% in the prior month. A 3.8% increase in the costs of hotel and motel rooms accounted for a quarter the increase in services prices. There were also increases in the costs of outpatient care, airline tickets as well as securities brokerage, dealing and investment advice. Portfolio management fees gained 0.2% after accelerating 5.9% in January. Portfolio management fees, healthcare, hotel and motel accommodation, and airline fares are among components that go into the calculation of the personal consumption expenditures (PCE) price indexes. The PCE price indexes are the inflation measures tracked by the Federal Reserve for it 2% target. Financial markets expect the U.S. central bank to start cutting interest rates by June. Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. The narrower measure of PPI, which strips out food, energy and trade services components, rose 0.4% in February after climbing 0.6% in January. The core PPI increased 2.8% year-on-year after gaining 2.7% in January. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/gasoline-food-boost-us-producer-prices-february-2024-03-14/
2024-03-14 13:00
March 14 (Reuters) - MicroStrategy (MSTR.O) , opens new tab is planning to raise capital through convertible bonds offering to buy bitcoin for the second time in less than 10 days, as the aggressive crypto investor looks to increase its exposure to the booming cryptocurrency. The software firm said after markets closed on Wednesday that it was offering $500 million in convertible notes due in 2031 to institutional investors. The company had announced a $600 million private offering in convertible notes on March 5. Its shares dropped 5% on Thursday, after hitting a 24-year high in the previous session. The stock has surged nearly threefold so far in 2024. Bitcoin , the world's largest cryptocurrency, hit a fresh record high at $73,803, taking its year-to-date gains to nearly 70%. It later fell below the $70,000 mark and was last trading down nearly 3% on the day. "A 5% move (in MicroStrategy) seems mild to me, especially on a day when bitcoin was down over $2,000," said TD Cowen analyst Lance Vitanza. Tysons, Virginia-based MicroStrategy has joined a slew of companies offering convertible bonds in a high interest rate environment. "MicroStrategy is now singlehandedly making it clear there is nothing restrictive about the (monetary) policy environment," said Michael O'Rourke, chief market strategist at JonesTrading. "Since late 2020, the company has come to market with convertible offerings and to a lesser extent at-the-market stock offerings for the specific purpose of investing the proceeds in bitcoin. It appears it is now becoming a weekly event." Convertible notes, which can be exchanged for shares when the stock hits a predetermined level, offer companies an option to raise capital at lower interest rates than regular bonds without the risk of immediately diluting shareholders as stock offerings do. MicroStrategy is marketing the corporate bonds at a yield of 0.375%-0.875% with an option to convert when the stock climbs 40% to 45% above current levels, according to LSEG IFR data. Citigroup and Barclays, the bookrunners for the deal, declined to comment on investor interest in the offering. MicroStrategy, which began buying and holding bitcoin in 2020, is the largest corporate holder of the cryptocurrency as revenue from its software business eased in 2022 and 2023. The company bought 15,000 bitcoins since Feb. 15, taking its total holdings to 205,000 as of March 10. Separately, crypto exchange Coinbase (COIN.O) , opens new tab priced an upsized convertible bond offering of $1.1 billion to repay or redeem its outstanding convertible debt and notes maturities. The Technology Roundup newsletter brings the latest news and trends straight to your inbox. Sign up here. https://www.reuters.com/technology/microstrategy-offers-second-convertible-debt-10-days-buy-more-bitcoin-2024-03-14/
2024-03-14 12:58
MOSCOW, March 14 (Reuters) - Russia's energy ministry said on Thursday that it expected the country's crude oil exports to increase due to unplanned maintenance at refineries, news agencies reported. "The situation is stable, but primary (refinery) output will be less. This is a fact, but there is nothing critical about it, because it means that oil exports will be higher," First Deputy Energy Minister Pavel Sorokin said, according to TASS news agency. He added that there was no concern about fuel supplies on domestic market, Interfax news agency reported. Russia has seen multiple outages at its refineries due to technical faults and drone attacks by Ukraine since the start of the year. Ukraine struck Russian oil refineries in a second day of heavy drone attacks on Wednesday, causing a fire at Rosneft's (ROSN.MM) , opens new tab biggest refinery in what President Vladimir Putin had said was an attempt to disrupt a presidential election this week. The country, the world's second largest crude oil exporter after Saudi Arabia, had already introduced gasoline exports ban for six months starting from March 1 to keep prices stable. Domestic gasoline prices are sensitive for motorists and farmers in the world's biggest wheat exporter ahead of the March 15-17 presidential election. Russia and Ukraine have targeted each other's energy infrastructure in a bid to disrupt supply lines and logistics and demoralise their opponents, as they seek the edge in a nearly two-year-old conflict that shows no sign of ending. Exports of oil, oil products and natural gas are by far Russia's biggest export, a major source of foreign currency revenue for Russia's $1.9 trillion economy, and ensure that Moscow has a place at the top table of global energy politics. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. https://www.reuters.com/business/energy/russia-expects-oil-exports-rise-due-refinery-outages-2024-03-14/
2024-03-14 12:55
March 14 (Reuters) - Stronger than expected producer prices and weaker-than-expected consumer spending reported Thursday did little to budge financial market bets on a June start to Federal Reserve interest-rate cuts, based on prices of futures contracts that settle to the U.S. central bank's policy rate. Fed policymakers meeting next week are looking for data that gives them more confidence inflation is on a path to their 2% goal, allowing them to start reducing the policy rate. They are widely expected to keep the rate in the 5.25%-5.5% range until their mid-June meeting, with two more rate cuts seen likely by year end. Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here. https://www.reuters.com/markets/us/traders-stick-bets-june-fed-rate-cut-after-economic-data-2024-03-14/
