As investors look for reliable income streams in a world of falling bond yields, Bank of America Merrill Lynch is recommending two global bellwethers in the transportation sector.
The firm said shipping company UPS and small-cap Fortress Transportation and Infrastructure are well positioned in the current environment of low interest rates thanks to their high and steady dividend yields.
Former SEC Chairman Harvey Pitt on Monday questioned the motivation of Harry Markopolos, the Bernie Madoff whistleblower who unveiled a long list of allegations against General Electric last week in an investigation for a short seller.
"One of the ways you can test Markopolos' bona fides, however, is the fact that the SEC has a whistleblower provision. And if he had brought all of his data to the SEC first, he would reap potentially up to 30% of the potential recovery that the SEC might obtain in connection with this case, " Pitt told CNBC.
"Instead what he did was go public, blast the company without giving the company a chance even to address his concerns," Pitt said. "Those are factors that make this look suspicious."
Jacob Frenkel, former senior counsel for the SEC Division of Enforcement, said Markopolos "stepped up the risk to himself, and to others, by going public as opposed to letting the SEC run its process." Frenkel said that regulators are going to want to know the "..
General Electric bounced back Friday after the CEO shored up confidence by purchasing a bulk of company shares, and analysts defended the industrial giant.
GE's stock surged more than 9% on Friday following its biggest drop since April 2008 a day earlier. The shares had tanked 11% on Thursday.
The stock began its downward spiral Thursday morning after Harry Markopolos, best-known for pointing out irregularities with Bernie Madoff's investment strategy years before the Ponzi scheme was exposed, published a report accusing GE of fraudulent financial statements.
Larry Culp, who took over the struggling industrial conglomerate last year, bought 252,200 shares for $7.93 each, according to a Thursday evening filing with the SEC. The CEO has roughly doubled his holding of GE shares this week.
In the 175-page report, Markopolos accused GE of $38 billion in accounting fraud — "bigger than Enron and WorldCom combined." He outlined a "long history" of accounting fraud at GE, dating to a..
The allegations by Madoff whistleblower Harry Markopolos of a $38 billion fraud at General Electric are "at best disingenuous" and "at worst highly inaccurate," according to Nick Heymann, co-group head of global industrial infrastructure at the William Blair financial services firm.
"You got the stock on sale yesterday for absolutely no basis. This is why all the insiders are buying," Heymann told CNBC on Friday, one day after GE shares tanked 11% to $8.01 per share, in their worst trading session in more than a decade.
GE stock on Friday regained most of the losses after the troubled conglomerate late Thursday revealed that CEO Larry Culp purchased nearly $2 million worth of shares. The purchase was made after Markopolos called the company "a bigger fraud than Enron."
Culp, who became chairman and CEO of GE last year, said the Markopolos accusations were false and driven by market manipulation. Leslie Seidman, a GE board director and audit committee chair, also pushed back on the Mar..
President Donald Trump held a conference call with the CEOs of the three biggest U.S. banks as the stock market tanked Wednesday.
Trump held the call with J.P. Morgan Chase CEO Jamie Dimon, Bank of America's Brian Moynihan and Citigroup's Michael Corbat, according to people with knowledge of the situation. The Dow plunged 800 points, or 3%, in its worst day of the year on Wednesday amid a recession warning from the bond market.
The president asked the three men to give him a read on the health of the U.S. consumer, according to one of the people. The executives responded that the consumer is doing well, but that they could be doing even better if issues including the China-U.S. trade war were resolved, this person said.
The CEOs also told Trump that the trade dispute is damaging the outlook for capital spending by corporations, according to another person with knowledge of the discussions. The president was receptive to the notion that uncertainty over trade is hurting corpor..
Volatility is back on Wall Street.
The average daily point range of the Dow Jones Industrial Average so far this month is about 482 points, which is more than double the average daily range from the rest of the year (224 points from January to July).
The CBOE Volatility index, a gauge for investor fear, has risen nearly 50% this month but based on past surges in uncertainty this could be a buying opportunity.
Stocks have whipsawed in August on concerns about the trade war between the U.S. and China and global economic uncertainty. On Monday stocks fell on worries and falling yields, followed by a rally in stocks of 300 points on Tuesday when Trump delayed and cancelled tariffs on select items. Just yesterday, the Dow dropped 800 points as investors worried an inverted yield curve means a recession is coming.
CNBC used Kensho, a hedge fund analytics tool, to track the top ETF performers the week after the volatility Index, a measure of the 30-day implied volatility of U.S. stocks also..
The stock market has done something so unusual this week that it has only happened 19 times in the past 30 years, and the strange pattern could be an ominous sign if history is any guide.
The S&P 500 fell 1.2% on Monday, followed by a 1.5% rebound in the next session, and Wednesday's brutal sell-off saw the benchmark losing 2.9% amid the recession signal from the bond market. This consecutive whiplash for the S&P 500 — down 1%, up 1% and down 2% — is a rare occurrence in market history and going back to 1928, the index has lost 2.5% on average in the six months after the phenomenon occurred, according to Bespoke Investment Group.
Source: Bespoke Investment Group
For stocks, things could change on a dime these days. Investors, who started Tuesday on edge about the geopolitical uncertainties in Hong Kong and Argentina, were surprised by President Donald Trump's decision to delay some of the China tariffs, which sent the market soaring instantly.
The rally only lasted for hours..
Former Federal Reserve Chairman Alan Greenspan said nothing is stopping the U.S. from getting sucked into the global trend of negative yielding debt, Bloomberg reported Tuesday.
"There is international arbitrage going on in the bond market that is helping drive long-term Treasury yields lower," Greenspan said in a phone interview. "There is no barrier for U.S. Treasury yields going below zero. Zero has no meaning, beside being a certain level."
With global central banks engaging in unprecedented monetary easing, a record $15 trillion of government bonds worldwide now trade at negative yields. As uncertainty reigns, investors are looking for a safe haven for their money, even if it means getting back less than they gave.
"Why people continue to buy long-term Treasurys at such low yields may be also due to forces having altered people's time preferences," Greenspan said. "But there is hundreds of years of history showing the long-term stability in time preference, so these changes..
Many global investors are turning toward Silicon Valley instead of Wall Street in search of returns.
The total invested in private markets hit all-time highs last year and continues to break multi-decade records this year. In the first half of the year, total investments in venture capital hit a 19-year high of $53.3 billion, according to data from Refinitiv published last week. That marked a 21% increase by total dollar amount compared to the first half of 2018.
The steady stream of funding comes alongside a drop in the number of publicly listed companies, rock-bottom global bond yields, and historically weak small-cap performance.
"The incentives for early exposure to rapidly growing, mature companies are still intact," PitchbBook senior manager Garrett James Black said in the firm's 2019 "Unicorn Report" published Monday. "With those imperatives in place and current market conditions — despite concern about a supposed imminent recession— looking to persist, unicorns aren'..