This is what you need to know:.
Coca-Cola, United Airlines, Netflix, AT&T and American Express are all expected to release results this week. Credit…Scott Olson/Getty Images
Analysts expect corporate profits for the S&P 500 in the three months through March to be about 27% higher than a year earlier, when the pandemic sent corporate profits plummeting.
Companies such as Coca-Cola, United Airlines, Netflix, AT&T and American Express plan to release earnings results this week, providing a relatively comprehensive look at the state of corporate America at the start of what could be a strong year for the U.S. economy. It could also help set expectations for the stock market, after already rising sharply this year.
The consensus among 76 economists surveyed by Bloomberg is that gross domestic product will rise 6.2 percent in 2021, making it the best year of economic growth since 1984. And the sentiment of analysts following the stock market is almost universally positive, given the strong economic tailwind.
It would be almost counterproductive to expect U.S. companies as a whole to fail to reach consensus, given the major influence of the macroeconomic environment on earnings, wrote John Weil, head of global strategy at Nikko Asset Management.
Expectations for earnings growth in the current quarter rose again: Analysts expect S&P 500 companies to grow 54% year-on-year in the three months to June.
This increase obviously reflects the recovery from the worst recession caused by the pandemic. But it’s also the result of a strengthening economy and a rebound in commodity prices, said Jonathan Golub, an equity market analyst at Credit Suisse.
Of course, if everyone expects such a jump in earnings, the good news may already be fully discounted in stock prices – meaning anything less than a flawless performance will continue to put pressure on stocks.
That’s what happened to a number of banks that announced their results last week. Shares of Morgan Stanley, for example, fell 2.8% on Friday, even as the bank reported record revenue and profit.
The S&P 500 is already up more than 11% in 2021 and set a new record on Friday.
This could mean that the market has not yet pulled back. The index is relatively expensive based on measures such as the price-to-earnings ratio, which compares stock prices to expected corporate earnings for the next 12 months.
The S&P 500 is trading at nearly 23 times expected earnings. This is roughly in line with the index estimate for most of last year, but is very high by historical standards.
Over the past 20 years, the S&P 500 has traded at an average of 16 times expected earnings.
By comparison, the expected return of 23 times is closer to what equity markets were at the end of the dot-com bubble in the late 1990s. When that ended, the S&P 500 fell about 50% before bottoming out.
The head office of ABN Amro in the centre of Amsterdam. An investigation by Dutch authorities found that the bank had failed to take into account evidence that some of its customers were criminals who were using it as a conduit for dirty money. Credit…Peter Dejong/Associated Press
Dutch bank ABN Amro announced Monday that it will pay a $580 million fine to end money laundering allegations. Subsequently, a former ABN director resigned his new position as director of Danske Bank after admitting that he was the subject of a related criminal investigation.
Chris Vogelsang’s resignation is a disgrace for Danske Bank, Denmark’s largest bank, which hired him in 2019 to restore confidence after a money laundering scandal in that country. Before becoming CEO of Danske, Mr Vogelsang was a member of the board of ABN Amro, responsible for retail and private banking.
Vogelsang admitted that Dutch authorities considered him a suspect in an investigation that led to ABN Amro agreeing to pay 480 million euros to settle money laundering charges. According to a report by Dutch authorities, in many cases ABN Amro ignored warning signs that some of its customers were criminals who were using it as a conduit for black money.
In a statement, Vogelsang said he was surprised that Dutch authorities considered him a suspect. During his time at ABN Amro, he said: I performed my leadership duties with honesty and dedication.
Vogelsang noted that Danske Bank is still under investigation for money laundering in its former Estonian unit, and said he did not want speculation about me to hinder Danske Bank’s future development.
Danske has appointed Carsten Egeris, the bank’s former chief risk officer, to succeed Mr Vogelsang.
Gerrit Zalm, a member of Danske’s board who was CEO of ABN Amro from 2009 to 2017, will also step down, the bank said. No reason was given.
In 2018, Danske Bank admitted that its head office and its Estonian branch, which it has since closed, had failed for years to prevent alleged money laundering involving thousands of customers.
In the ABN Amro case, the Dutch authorities found that the bank had failed to act on clear indications of illegal activities, including large cash transactions. In some cases, authorities said, the bank continued to serve customers whose criminal activities had been reported in the media or who had a known history of fraud.
As a bank, we have not only a legal but also a moral obligation to do everything in our power to protect the financial system from abuse by criminals, said Robert Swaak, chief executive of ABN Amro, in a statement. Unfortunately, I have to admit that in the past we have not been able to fulfil our important role as guardians.
With the relaxation of Covid limits and the acceleration of vaccinations, more and more people are flying every day. However, dangerous variants have led to new outbreaks and raise fears of a deadly extension of the pandemic.
To understand how safe it is to fly today, the Times asked researchers to simulate how air particles flow through the cabin and how potential viral elements could pose a risk.
For example, when a passenger sneezes, the air blowing down the sides pushes the particles into the aisle where they mix with the air from the other row. Not all particles are the same size, and most do not contain infectious viral substances. But if nearby passengers didn’t wear a mask, even for a quick snack, the sneezing air could increase the chance of inhaling virus particles.
According to infectious disease experts, the way air is circulated on planes is not the only part of the safety equation. The likelihood of exposure is just as great, if not greater, when people are in the terminal, sitting in the airport’s restaurants and bars, or going through security screening.
It’s not just the plane that’s the problem, says Saskia Popescu, an epidemiologist who specializes in infection control. Think about the airport and the whole trip.
An English Premier League match in January between Arsenal and Newcastle. Arsenal are one of the founding members of the new Super League…Credit…Photo of Adam Davie’s swimming pool
A dozen major European soccer clubs have announced plans to create a new league to compete with the Champions League, reports Tariq Panja of the New York Times. This plan will concentrate the wealth of the sport in the hands of a handful of teams, provided it can withstand potential legal challenges.
It is common knowledge that the Super League was prepared in secret for months. The founding clubs are Arsenal, Liverpool and Manchester United (England), Real Madrid and Barcelona (Spain), AC Milan and Juventus (Italy). More teams are expected to fill the 15 league spots for the founding regular members.
The idea is to have exclusive weekday games in between home games. A broad-based league would be more akin to the NFL or the NBA, where each year a new group of teams enters the tournament based on their performance in their home league. Five spots in the 20-man league will be filled through the annual qualification process.
There’s a lot of money at stake: The founding clubs of the Super League would share 3.5 billion euros, or more than $4 billion, in the formation. That means they will take a lot more than last year’s Champions League winners.
JPMorgan Chase is leading a multi-billion dollar fundraising campaign to support the new league.
The share prices of listed clubs like Juventus and Manchester United rose more than 10% in early trading.
The news caused an uproar in the school. UEFA, the organisers of the Champions League, have criticised the proposal as a cynical scheme and are looking for ways to block it. The European football body also pointed out that FIFA, the world football body, has threatened to exclude players who play in unauthorised competitions from tournaments such as the World Cup.
Political leaders like British Prime Minister Boris Johnson and French President Emmanuel Macron are also against the Super League.
But the organisation behind the Super League said on Monday it had taken legal action to oppose any attempt to block the formation of the project – although it also said it wanted to work with existing football organisations.
linked to the Robert Neubecker loan.
Members of the National Association of Realtors, the country’s largest industry group with 1.4 million real estate professionals, are speaking out against the Centers for Disease Control and Prevention’s moratorium on evictions.
The Alabama and Georgia real estate associations have sued the federal government, and the national association is paying all court costs. The hearing is scheduled for the 29th. On the April set, Ron Lieber reports for the New York Times.
According to the Center for Policy Response, the N.A.R. spends more on federal lobbying than any other organization. To see through their actions and propaganda, we must first critically examine what N.A.R. is and what interests it serves. Since their own CEO bragged about his membership in 2017, it’s really the National Association of Realtors, not them.
And of those more than a million members, about 38 percent own at least one rental property, according to the association. The N.A.R. does not hesitate to emphasize in the lobbying section of its website that it wants to protect the interests of the property.
Why would he do that? The N.A.R.’s expert on the subject could not schedule an interview, the spokesman said.
But when you choose a realtor for your home from the membership, ask that person if you are interested or curious. Many of them have no idea what the N.A.R. stands for.
linked to credit New York Times illustration; photo by Alexander Drago/Reuters….
That’s where the lobbyists are.
Exchange Coinbase, asset manager Fidelity, payments company Square and investment firm Paradigm have formed a new business group in Washington : Crypto Innovation Council. The group hopes to influence policies that will be key to expanding the use of cryptocurrencies in conjunction with traditional finance, reports Ephrat Livni in the newsletter DealBook.
Cryptocurrencies are still largely speculative assets, but some experts believe bitcoin and related blockchain technology will become a fundamental part of the financial system, and the success of companies built around these technologies could also attract more attention from regulators.
We will always take a closer look at what we are doing, Brian Armstrong, CEO of Coinbase, told CNBC. We are very happy and excited about compliance, he added, but the regulation of cryptocurrencies must be equivalent to that of traditional financial services.
Here are four questions that will keep crypto-currency lobbyists busy:
- The first publication commissioned by the Crypto Council is an analysis of the illegal use of bitcoin. He concludes that the fears are greatly exaggerated and that blockchain technology would be better used by law enforcement to stop crime and gather intelligence.
- New anti-money laundering rules adopted this year will significantly expand the scope of reporting on digital currencies. In addition, the Treasury Department has proposed rules requiring detailed reporting of transactions over $3,000. The U.S. has a $500,000 budget for unhosted wallets, or digital wallets not connected to a third-party financial institution, forcing cryptocurrency institutions to handle more data.
- When is a digital asset a security and when is it a commodity? Bitcoin and other cryptocurrencies issued by a decentralized network are generally considered commodities and are less heavily regulated than securities that represent an ownership interest in a company. Tokens issued by individuals and companies are more like securities, as they represent more of an interest in the issuer’s project.
- The Chinese government is already experimenting with the central bank’s digital currency, the digital yuan. China would be the first country to introduce a virtual currency, but many countries are considering it. Some cryptocurrency advocates fear that China’s enthusiasm for the space could threaten the dollar, national security and America’s competitiveness.
Peloton shares fell in premarket trading after the U.S. Consumer Product Safety Commission issued a safety warning for treadmills…Roger Kisby for The New York Times
European stocks traded mixed on Monday, while U.S. stock futures edged lower as hundreds of publicly traded companies, including Coca-Cola, Netflix and United Airlines, reported earnings early this week.
The Stoxx Europe 600 rose 0.1%, continuing to move at record levels. The European index has been rising for the past seven weeks. On Wall Street, the S&P 500 broke a record Friday after a string of strong economic reports and corporate results. On Monday, futures indicated it would open about 0.4% lower.
European government bond yields rose Monday as investors awaited the European Central Bank’s latest monetary policy decisions, which will be announced Thursday. Last month, the central bank said it would step up the pace of its asset purchases to halt the rise in bond yields.
- Peloton shares fell nearly 6% in pre-trade after the US Consumer Product Safety Commission issued an urgent warning about the fitness equipment maker’s treadmill. Following reports of injuries and a fatal accident, authorities have said that users with young children at home should stop using the device.
- Shares of Coinbase fell nearly 4% in pre-market trading with other crypto stocks. Over the weekend, the price of bitcoin, the most popular cryptocurrency, fell by more than $7,000, or about 9 percent.
- GameStop shares rose 6% in pre-trade after the company announced that its top executive will step down at the end of July. The company, which was at the center of a retail frenzy earlier this year, has been shaken up by new chairman Ryan Cohen, who is an activist investor and wants to make the company digital.
- Oil prices fell slightly. West Texas Intermediate futures, the U.S. benchmark for crude oil, fell 0.3 percent to just below $63 a barrel.
- The US dollar fell against other major currencies, including 0.4% against the euro and the British pound. The currency also weakened by 0.6% against the Japanese yen.
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