A look at all the twists and turns of a trade that almost happened but hasn’t….Yet. Where Patric Hornqvist to Florida for Mike Matheson stands With the Federal Reserve calling for more fiscal support for the U.S. economy, four market watchers share their outlook on whether there’s more stimulus to come. Stocks accelerated losses into the close, erasing earlier gains and ending an advance that began on Tuesday. The S&P 500, Dow and Nasdaq each had their worst day in two weeks. WASHINGTON – Gilbert resident Nadia Saco bought the home of her dreams this August. But landing it, she said, was a “nightmare.” Saco, 32, and… The top finance stories for September 23, including the news on Barclays distressed-credit team and JLL’s new hire.
It was a quiet day up until 11:17 this morning, when former Pensburgh podcast guest Kevin Weekes broke some news via twitter that shook up the hockey world.
“As per what I’m told – the @penguins are trading F Patric Hornqvist to @FlaPanthers in exchange for D Mike Matheson,” was the tweet.
Before long, the instant reactions were ticking in about the deal itself. After all, almost always when a report that strong from a credible source hits social media, the confirmation from official accounts once the finalization comes through isn’t long to come.
Yet, official world did not come out, and just a half hour after Weekes’ broke the news, fellow in-the-know reporter Elliotte Friedman tweeted there was a “glitch” causing a delay in wrapping up this transaction.
This evening, Friedman published a story on Sportsnet about how the Penguins/Panthers trade was apparently “falling apart” throughout the afternoon.
The two teams were considering it, and, from what I understand, there were two hurdles. The first was Hornqvist’s no-trade. The second is his contract. The Panthers had concerns about insurance in case of injury, and would the winger’s deal be covered?
GM Bill Zito was in Columbus when the Blue Jackets had a similar issue with Nathan Horton. That contract was not insured, and, therefore, a financial headache when he could not play for the final six seasons of it. (Eventually, they traded Horton to Toronto for David Clarkson, a move that allowed the Maple Leafs to use Long-Term Injury relief.)
You could see why Zito would be concerned about that.
Whatever the case, it sounds like the news got out before either issue was settled.
Some instant reaction was negative towards Pittsburgh general manager Jim Rutherford, as if he simply forgot to ask Patric Hornqvist to waive his no trade clause before agreeing to a trade to send him away. That criticism doesn’t look to be very accurate, especially since NHL general managers are often chatting and touching base with each other in loose conversation that can draw out over weeks and months as they explore which teams might have interest in certain players, and what teams are willing to deal away.
As Friedman writes at the end there, a big problem was information got out before a final decision and agreement was made between all parties. Weekes wasn’t wrong to say what he said, as Pittsburgh/Florida was clearly discussing this trade, yet in 2020 sometimes the news of a transaction can actually outpace the actual transaction. And that could be what happened here.
From a Pittsburgh perspective, The Athletic’s Josh Yohe wrote a tweet that taken in context with Friedman’s information adds up into a logical piece of the puzzle as well.
And by the way, while the Penguins and Panthers were obviously close to pulling this off, the trade might not happen at all. Clearly information got out before the teams would have liked. Sounds like things are totally stuck now.
Like I said, the Penguins…never boring.
“Totally stuck now” doesn’t sound very promising. Then again in the world of NHL transaction nothing happens until it happens, and it only takes one change of mind or a new proposal to go from nothing to a completed deal.
As of now, with the trade “stuck”, it might simply take Panthers’ GM Zito to internally debate and decide if he can live with the risk of Hornqvist getting hurt to justify getting his team off the hook for six years of a player who struggled in the 2020 playoffs in Matheson. Then again, with time ticking, the Pens could always pull back and look for a new angle or totally different team or negotiation to try.
This Hornqvist almost-trade is reminiscent of the February 2018 trade that sent Derrick Brassard from Ottawa to Pittsburgh, and involved the Vegas Golden Knights. You might remember, the NHL actually rejected the transaction and forced the teams to re-structure the trade.
If you care about the details, as we wrote back then:
Pensburgh has learned that the main issue the NHL had with this trade involves the reserve list and salary retention. It is believed that the way the deal was initially presented, the Vegas Golden Knights were agreeing to retain salary for Derick Brassard, a necessary step to keep the Pens under the upper limit of the salary cap.
The issue according to the league: Vegas can’t technically retain any of Brassard’s salary due to the fact that Brassard has never been a member of the Vegas organization.
Basically the Penguins were using Vegas to park some of Brassard’s salary cap hit, so that Pittsburgh could afford to get Brassard and stay under the upper limit of the salary cap. But Brassard wasn’t a member of Vegas, and the Golden Knights were giving up no assets, simply using their cap space to get Ryan Reaves and a draft pick. So the parties simply reworked the deal, Vegas sent a low-level AHL player in Tobias Lindberg to Pittsburgh, appeasing the league that VGK gave up an “asset” in exchange for receiving Ryan Reaves plus a 2018 fourth round pick from Pittsburgh, the Pens gift to Vegas for VGK holding 40% of Brassard’s cap hit.
However, this 2020 trade has some meaningful differences from the 2018 train-wreck of a trade attempt that was the three-team deal for Brassard. It has NOT been reported that the Pens and Panthers actually submitted the trade paperwork to the league, a key designation. Today’s “almost trade” doesn’t appear to have ever made it all the way to a trade call to confirm details and get league approval, and stalled before getting to that point.
Ultimately, what Weekes threw out in public light was details of a fast-moving trade negotiation that by good information was rapidly moving towards finalization. Only as Friedman said, “the two teams were considering it”, as in the negotiation wasn’t completely officially signed off on, due to Florida’s concerns about the potential ramifications of a Hornqvist injury.
One other item learned to file away is that the Penguins pretty clearly would like to move on from Hornqvist. This isn’t a shock since his name has been in the national trade rumor mill, and the team’s stated mission was to get “younger and faster” this off-season. Hornqvist is the second oldest forward on the team at 33, and not a very fast player. He’s been bounced down to the third line, and at times not even the first power play. He carries a hefty $5.3 million salary cap hit.
All signs point to him being a player a team would probably like to trade, with the major obstacle being Hornqvist’s full NTC as well as probably taking back a not-so-great contract in return for his own not-so-great contract — which would have been the case with Matheson’s six years remaining on a $4.875m cap hit.
Time will tell if this deal gets “unstuck”, but for one day a major move left the Pens and their fans in limbo as confirmation of a reported trade hung out there but never reached the finish line.
Author: Hooks Orpik
Fed calls for more fiscal stimulus. Four market analysts on what’s ahead for stocks
Federal Reserve Chairman Jerome Powell urged Congress on Wednesday to provide the U.S. economy with more fiscal support to combat the coronavirus pandemic’s ongoing impact.
“Many borrowers will benefit from these programs, as will the overall economy,” Powell said. “But for others, a loan that could be difficult to repay might not be the answer, and in these cases, direct fiscal support may be needed.”
Market watchers can agree on one thing: There is a need for further fiscal stimulus. How the congressional stalemate will unfold and affect U.S. stocks is a larger debate.
Here’s what four market analysts said on Wednesday as the major averages fell:
Eugene Profit, the president, CEO and managing director of Profit Investment Management, questioned the idea of a V-shaped recovery:
“September has caused a little bit of a reversal, and that reversal to some extent has been caused by a little bit of focus on CARES 2 [stimulus legislation] really not being passed and not getting more fiscal stimulation. … We don’t believe that there’s going to be much support before the election due to the fact that the Congress’ attention is focused elsewhere, especially with the unfortunate passing of Justice Ruth Bader Ginsburg. Condolences to her family. So, we’re looking here and we’re watching the market to see where investors begin to look toward the sidelines, but we also are watching what’s going on in the vaccine fight. For most of the pandemic, investors have been very optimistic about the market and thinking that we’re going to have a straight-line, V-shape-type recovery, and that’s the way we’ve invested, or that’s the way most of the market is invested. We don’t think that’s going to continue.”
Glenn Hutchins, chairman of North Island and a co-founder of Silver Lake, said politics getting in the way of further stimulus would be a “very significant issue” for the market:
“One example of the politics getting in the way of all this right now is that we can’t get another stimulus package, which we clearly need, which both sides think we need, which the airline CEOs say we need, which labor leaders say we need, people who are mayors and governors say we need. There’s a fair amount of debate about how big it should be, how it should be targeted, but there’s nobody saying we can’t have it and we don’t need it and we’re not going to have it because of the politics of the season we’re in right now. By the way, these projections that we’re looking at right now … all assume at least $1 trillion or more of stimulus. So, if we don’t have that, that will be a very significant issue.”
Dan Niles, the founder and senior portfolio manager for the Satori Fund and also the founding partner and portfolio manager at Alpha One Capital Partners, said federal stimulus would likely lead to more upside, but the path could be choppy:
“Before the unfortunate passing of Ruth Bader Ginsburg, I thought for sure we would get a Phase 5 package, because … I felt like it would take the market really going down hard for politicians to be forced to act like grown-ups and come together with something that’s good for the country, and I felt like we were almost there. Now, with the Supreme Court fight on, I think you’re back to both sides not wanting to compromise. But … this market has been driven by stimulus the whole way up. It’s about 30% of GDP between monetary and fiscal stimulus, and we’ve seen what that’s done. The market’s up year to date even with this froth, which is incredible, given we’re still in the middle of this pandemic trying to get through it. So, I think it could be good for easily a 5% to 10% move on the upside, potentially, if we get it. But remember, the Fed is backing off of their balance sheet expansion. That expanded to [$]7.2 trillion in the middle of June. It’s actually down [$]150 billion since then, and … when you’ve had that, the market’s really struggled in 2011, ’15 and ’18 during periods of time. So, that’s why we’re trying to be very nimble, I guess is the best way to put it right now, moving into some lower-volatility names on the long side.”
Ed Yardeni, president of Yardeni Research, figured that politics aside, the government had the means to keep the economy chugging along:
“I reckon that there’s still enough of this government stimulus that it’ll keep the economy growing probably through September, October, maybe November. And hopefully along the way, we’ll see employment continue to pick up so that the economy can grow on its own without necessarily needing another or at least another big stimulus package.”
Author: Lizzy Gurdus
Stock market news live updates: S&P 500 closes at lowest level since July as tech shares fall anew
Stocks accelerated losses into the close, erasing earlier gains and ending an advance that began on Tuesday. The S&P 500, Dow and Nasdaq each had their worst day in two weeks.
The S&P 500 sank more than 2%, led by a drop in the energy and information technology sectors, to close at its lowest level since the end of July. The Nasdaq’s more than 3% decline brought the index down also to near a two-month low.
The Dow fell to its lowest close since the beginning of August, even as shares of component stock Nike (NKE) climbed to a record high after reporting quarterly results that far surpassed consensus expectations. However, the increase was offset in the Dow by declines in tech names including Salesforce and Apple.
Shares of Stitch Fix (SFIX) sank more than 15%, after the digital personal styling service posted a wider than expected quarterly loss. Tesla (TSLA) shares fell 10% after the company’s inaugural “Battery Day” event Tuesday evening, wherein CEO Elon Musk unveiled a new target to slash battery costs in half to be able to produce a cheaper $25,000 electric car by 2023, disappointing some on Wall Street who had hoped for nearer-term developments.
Tech shares reversed course and dropped on Wednesday after leading the broader market higher a day earlier, with the S&P 500 on Tuesday rising for the first time in five sessions. Investors digested a confluence of concerns, including those over the pace of the economic recovery in absence of further stimulus.
“The early recoveries in retail sales, industrial production, auto sales and payrolls were indeed broadly V-shaped. But it’s also pretty clear that the rates of recovery have slowed, with only retail sales having completed the V. You can thank the enhanced unemployment benefits for that – $600 per week for more than 30M people, at the peak,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in a note Tuesday. He added that home sales have been the only area where the V-shaped recovery has continued, with a report Tuesday showing existing-home sales jumped to the highest level since 2006 in August.
“It’s hard to be optimistic about September and the fourth quarter, with the chance of a further relief bill before the election receding as Washington focuses on the Supreme Court,” he added.
Other analysts echoed these sentiments.
“Even if just coincidence, September has become the month when most of investors’ widely-held reservations about the global economy and markets have converged,” John Normand, JPMorgan head of cross-asset fundamental strategy, said in a note. “These include an early-stage downshift in global growth; a rise in US/European political risk; and virus second waves. The only missing component has been the use of systemically-important sanctions in the US/China conflict.”
Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin on Tuesday addressed the need for further fiscal stimulus in testimony before the House Financial Services Committee. Powell underscored the limitations of the Federal Reserve’s lending powers, especially in light of the meager appetite among companies to turn to the central bank’s Main Street Lending Program, which has so far extended less than 1% of its loan capacity to small businesses.
“Many borrowers will benefit from these programs, as will the overall economy. But for others, a loan that could be difficult to repay might not be the answer,” Powell said. “And in these cases, direct fiscal support may be needed.”
To that end, Mnuchin said he would support a reauthorization of measures under the Paycheck Protection Program, which would offer forgivable loans to businesses that stayed open and kept most of their workers employed. However, any reallocation of funds would require congressional approval – a factor that remains elusive as lawmakers struggle to come to a consensus on components of another virus relief-related fiscal stimulus package before the presidential election.
Here were the main moves in markets as of 4:03 p.m. ET:
S&P 500 (^GSPC): -78.64 (-2.37%) to 3,236.93
Dow (^DJI): -525.05 (-1.92%) to 26,763.13
Nasdaq (^IXIC): -330.65 (-3.02%) to 10,632.99
Crude (CL=F): -$0.28 (-0.70%) to $39.52 a barrel
Gold (GC=F): -$46.10 (-2.42%) to $1,861.50 per ounce
10-year Treasury (^TNX): +1.2 bps to yield 0.6760%
The three major indices held lower in afternoon trading, and losses in the Dow accelerated. The energy, information technology and real estate sectors weighed on the S&P 500.
Here were the main moves in markets, as of 1:56 p.m. ET:
S&P 500 (^GSPC): -35.18 points (-1.06%) to 3,280.39
Dow (^DJI): -214.02 points (-0.78%) to 27,074.16
Nasdaq (^IXIC): -175.26 points (-1.6%) to 10,788.62
Crude (CL=F): +$0.19 (+0.48%) to $39.99 a barrel
Gold (GC=F): -$38.50 (-2.02%) to $1,869.10 per ounce
10-year Treasury (^TNX): +1.7 bps to yield 0.681%
The three major indices gave up earlier gains to trader lower Wednesday mid-morning, as tech stocks renewed their declines. The Dow gave up an advance of as many as 176 points earlier in the session, as more than 1% declines in Apple, Microsoft, Chevron, American Express and Disney offset a steep gain in Nike.
The Nasdaq underperformed, dropping 0.7%.
US manufacturing and services sector activity steadied in September over August, according to IHS Markit’s preliminary monthly purchasing managers’ indices.
The manufacturing PMI ticked up slightly to 53.5, matching expectations and rising slightly from the 53.1 in August. Readings above the neutral level of 50 indicate expansion in a sector.
The service sector PMI moderated, however, and edged down to 54.6 in September from 55.0 in August. Consensus economists had looked for a reading of 54.7, according to Bloomberg-compiled data.
“US businesses reported a solid end to the third quarter, with demand growing at a steepening rate to fuel a further recovery of output and employment,” Chris Williamson, chief business economist for IHS Markit, said in a statement.
“The question now turns to whether the economy’s strong performance can be sustained into the fourth quarter,” he added. “Covid-19 infection rates remain a major concern and social distancing measures continue to act as a dampener on the overall pace of expansion, notably in consumer-facing services. Uncertainty regarding the presidential election has also intensified, cooling business optimism about the year ahead. Risks therefore seem tilted to the downside for the coming months, as businesses await clarity with respect to both the path of the pandemic and the election.”
Here were the main moves in markets, as of 9:30 a.m. ET:
S&P 500 (^GSPC): +3.86 points (+0.12%) to 3,319.43
Dow (^DJI): +128.94 points (+0.47%) to 27,417.12
Nasdaq (^IXIC): -15.64 points (-0.17%) to 10,946.44
Crude (CL=F): +$0.09 (+0.23%) to $39.89 a barrel
Gold (GC=F): -$19.80 (-1.04%) to $1,887.80 per ounce
10-year Treasury (^TNX): +1 bps to yield 0.674%
General Mills (GIS) posted estimates-topping results on the top- and bottom-line for its fiscal first quarter, aided by a continued trend toward consumers dining at home rather than going out to restaurants.
First-quarter adjusted earnings were $1.00 per share, versus the 88 cents expected. Net sales of $4.4 billion grew 9% over last year and topped expectations for $4.2 billion. The company said it expects the largest factor impacting this fiscal year’s performance will be at-home versus away-from-home consumer food demand, which in turn will depend heavily on the pace and shape of the recovery from the pandemic.
It added that while it saw at-home food demand still elevated from pre-pandemic levels, demand did moderate from the fourth quarter of fiscal 2020 ending in May. General Mills expects current-quarter at-home food demand will still remain elevated to see high single-digit retail sales growth in its North America Retail Category, which is by far the company’s largest segment.
Here were the main moves in markets, as of 7:12 a.m. ET Wednesday:
S&P 500 futures (ES=F): 3,315.5, up 16.25 points or 0.49%
Dow futures (YM=F): 27,367.00, up 224 points or 0.83%
Nasdaq futures (NQ=F): 11,181.25, up 31.75 points, or 0.28%
Crude (CL=F): +$0.12 (+0.3%) to $39.92 a barrel
Gold (GC=F): -$11.60 (-0.61%) to $1,896.00 per ounce
10-year Treasury (^TNX): +1.3 bps to yield 0.679%
The Mortgage Bankers Association’s weekly mortgage application index grew 6.8% during the week ended Sep. 18, returning to growth after a 2.5% drop during the previous week.
The increase was driven by a 9% weekly jump in refinances. Over last year, refinances grew 86%.
Purchases grew 3%, seasonally adjusted, on a week-over-week basis. Unadjusted, home purchases were up 25% over last year.
“Mortgage applications activity remained strong last week, even as the 30-year fixed-rate mortgage and 15-year fixed-rate mortgage increased to their highest levels since late August,” Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, said in a statement. “Purchase applications were up over 25% from a year ago, and the demand for higher-balance loans pushed the average purchase loan size to another record high. The strong interest in home-buying observed this summer has carried over to the fall.”
Here were the main moves in equity markets, as of 6:04 p.m. ET Monday:
S&P 500 futures (ES=F): 3,300.5, up 1.25 points or 0.04%
Dow futures (YM=F): 27,0207.00, up 64 points or 0.24%
Nasdaq futures (NQ=F): 11,149.75, up 0.25 points, or 0.00%
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Author: Emily McCormick·ReporterSeptember 23, 2020, 10:09 PM
‘Crazy, crazy’ real estate market puts Gilbert near top of rankings
Author: Rob Winder/Cronkite News
Trading bloodbath at Barclays — Nasdaq pushes back on SEC — Wells CEO on diversity
Happy hump day!
While much of Wall Street has acknowledged more needs to be done to diversify its ranks, one financial firm has already made excuses.
Wells Fargo chief executive Charles Scharf said during a Zoom meeting over the summer that the bank struggled to reach diversity goals because of a lack of qualified minority applicants, according to a recent Reuters report.
“While it might sound like an excuse, the unfortunate reality is that there is a very limited pool of black talent to recruit from,” Scharf reportedly said in a subsequent memo, according to Reuters.
While some attendees of the meeting were offended by the comments, according to the story, at least one participant described it as “incredibly constructive.”
The entire piece is worth a read.
Like the newsletter? Hate the newsletter? Feel free to drop me a line at email@example.com or on Twitter @DanDeFrancesco.
Trading distressed credit is difficult during the best of times. Throw in a global pandemic, where even the most sound business models are at risk, and things can go wrong quickly.
Alex Morrell has the scoop on just how bad things can get. Barclays’ distressed-credit team is staring down the barrel of $60 million in losses through mid-year.
Alex breaks down what exactly has gone wrong for the British bank.
Click here to read the full story.
Rebecca Ungarino has the latest update on the battle over a proposal from the SEC on disclosures for money managers. Nasdaq is the latest financial firm to throw its hat in the ring and oppose the idea. Read all the details here.
Small-business lending is going through some tough times. However, this fintech updated its platform in hopes of better connecting lenders with borrowers in the space. Shannen Balogh has the full story here.
Wall Street Commodity Traders Head for Best Year in a Decade (Bloomberg)
Blackstone Ready to Lend After Raising Record Property Debt Fund (WSJ)
Insurance Freeze Snarls U.S. Supply Chains (WSJ)
11 real abandoned places where your favorite movies and TV shows were filmed (Insider)
Orlando Bravo Rides Software Deals to Heights of Private-Equity Industry (WSJ)
The Chainsmokers just raised $35 million from Mark Cuban, Ron Conway, others to invest in tech startups but quickly discovered that buying into a hot startup is harder than they imagined (Business Insider)
A high school teacher in Detroit bought a ‘trashed’ home in the city for $2,600 and got it into livable condition in less than 2 years. Here’s how she did it. (Business Insider)
The bakery made famous by ‘Sex and the City’ has released the recipe for its popular banana pudding (Insider)
Author: Dan DeFrancesco