(Bloomberg) -- When the coronavirus pandemic sent shares plunging, you didn’t have to be a professional investor to spot a buying opportunity. In fact, it might be better if you weren’t.The can’t-miss rise of equity markets around Asia is fueling the explosion of interest among retail investors in the region, mirroring their exuberance worldwide. Millions of investors who had never so much as opened a trading account before have been piling into the market.Just as the pandemic led bored Americans to make the Robinhood investing app a household name, it’s the amateurs who have helped to lift equities from India to Thailand despite some of the worst macroeconomic fundamentals in memory. But it’s also giving professionals pause - what happens when these investors are no longer around?“If everyone is going into the same name and something happens, those names are likely to be sold off quite aggressively,” said Catherine Yeung, Fidelity...
(Bloomberg) -- Asian stocks pared declines and U.S. equity futures edged higher as investors weighed signs China’s economy is recovering against the ongoing spread of the coronavirus.Stocks were down in Japan and Australia though off session lows. Shares fluctuated in Hong Kong and dipped in China, where markets reopened after a two-day holiday. S&P 500 contracts reversed early losses to trade modestly higher. South Korean shares slipped after the country’s finance minister ruled out another budget for this year. Treasuries and the dollar were steady.Investors are bracing for a continuation of last week’s risk-off sentiment as coronavirus cases surpassed 10 million globally and a resurgence in the U.S. continues to batter states likes Texas, Arizona and Florida. Providing some respite from the negative news, China’s industrial companies saw the first monthly increase in profits since November.“The recovery is going to be much slower and much more uneven than most people believe,”...
(Bloomberg) -- The shale bust has reached a grim milestone by claiming the pioneer of America’s drilling renaissance. But Chesapeake Energy Corp., which filed for bankruptcy protection on Sunday, is just the latest in a long list of casualties.More than 200 North American oil and gas producers, owing over $130 billion in debt, have filed for bankruptcy since the beginning of 2015, according to a May report from law firm Haynes & Boone. This year alone, at least 20 have gone under after oil prices plunged amid the Covid-19 pandemic.The shale boom spearheaded by the likes of Chesapeake a decade ago was fueled by debt. Profitability and shareholder returns have been consistently disappointing, and investors had already grown wary of throwing more money into shale before this year’s oil crash. The rate of default on high-yield energy debt stood at 11%, Fitch Ratings said in a June 11 report, the highest...
The SPDR S&P 500 ETF Trust (NYSE: SPY) is up 36.1% since it bottomed on March 23, but the potential for a second wave of coronavirus infections has investors concerned about whether or not US stocks are still the best place to be invested.In a report last week, LPL Financial analyst Jeffrey Buchbinder listed five reasons he believes international equities will continue to underperform U.S. stocks.1\. Relatively Weak Economic Outlook: Buchbinder is projecting a more severe economic contraction in Europe than in the U.S. in 2020. Consensus economist projections are now calling for about 8% Eurozone GDP contraction this year compared to 5.7% contraction in the U.S.2\. International Stocks Are More Value-Oriented: Buchbinder said value stocks are unlikely to outperform growth stocks until there are clear signs of a durable global economic recovery. High-growth tech stocks have roughly a 26% weighting in the S&P 500, whereas tech stocks have only about...
(Bloomberg) -- When the coronavirus pandemic sent shares plunging, you didn’t have to be a professional investor to spot a buying opportunity. In fact, it might be better if you weren’t.The can’t-miss rise of equity markets around Asia is fueling the explosion of interest among retail investors in the region, mirroring their exuberance worldwide. Millions of investors who had never so much as opened a trading account before have been piling into the market.Just as the pandemic led bored Americans to make the Robinhood investing app a household name, it’s the amateurs who have helped to lift equities from India to Thailand despite some of the worst macroeconomic fundamentals in memory. But it’s also giving professionals pause - what happens when these investors are no longer around?“If everyone is going into the same name and something happens, those names are likely to be sold off quite aggressively,” said Catherine Yeung, Fidelity...
