Top news and what to watch in the markets on Tuesday, June 9, 2020.

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General Electric Co. (GE) said it reopened portions of its prior debt offerings as it seeks to raise $3 billion in total proceeds to bump up its cash buffers to cope with the coronavirus crisis.The company said the reopening was in “response to a reverse inquiry from a long-term strategic investor”. Shares rose 7.4% to $8.46 on Monday.GE expects to use these proceeds to reduce shorter-duration debt, including repaying a portion of GE’s intercompany debt obligations to GE Capital and lower GE Capital’s outstanding debt obligations.“The combination of transactions is expected to be leverage neutral over time,” the company said in a statement.The move builds on a number of recent leverage-neutral actions that have improved GE’s near-term liquidity by extending $4.2 billion of industrial maturities and $4.4 billion of capital maturities to date. The company added that it remains committed to achieving its leverage goals over time.Upon closing of the two offerings, both the GE notes and the GE Capital notes will rank pari passu with the outstanding existing and future senior unsecured debt of GE, the company said. Both offerings are expected to close on June 15 subject to satisfaction of customary closing conditions.Shares in GE have been hit hard this year, dropping almost 30%. The decline is mostly on account of GE’s heavy dependency on the commercial aviation sector, which has come to an almost standstill during the coronavirus pandemic. GE announced last month that it is cutting 25% of the workforce at its aviation unit, which makes engines for Boeing (BA) and Airbus.Meanwhile Citigroup analyst Andrew Kaplowitz this month kept a Buy rating on the stock with a $8 price target amid optimism that a recovery at GE Healthcare could be underway as COVID-19 supports an acceleration of the adoption of healthcare digital tools.After hosting a virtual meeting with GE Healthcare CEO Kieran Murphy, the analyst tells investors that healthcare demand trends are improving faster than expected with China, in particular, largely "normalized".Kaplowitz believes that longer-term, the "margin expansion runway in the business could remain substantial".As the coronavirus pandemic is forcing a change in certain clinical practices, GE’s digital products related to remote patient monitoring and healthcare workflow have been amongst the tools deployed in dealing with the pandemic, Kaplowitz added.The Street’s rating outlook for GE is currently split with 8 Buy and 7 Hold ratings, adding up to a Moderate Buy consensus. The average analyst price target of $8.66 per share indicates shares have a mere 2.4% upside potential over the coming year, following some recovery over the past month. (See GE stock analysis on TipRanks).Related News: Airbus Gets No New Aircraft Orders In May Amid Aviation Crisis Boeing CEO Says ‘Likely’ A Major Airline Could Fold In 2020 Colombian Carrier Avianca Files for Bankruptcy Protection Due to Coronavirus Woes More recent articles from Smarter Analyst: * Soleno Plunging 48% In Pre-Market On Obesity Study Failure * Scotts Micracle-Gro Spikes 6% In Pre-Market After Raising 2020 Sales Guidance * IBM Makes Surprise Exit From Facial Recognition Business * Macy’s Spikes 15% After-Hours On New Financing Deal

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(Bloomberg) — As a sense of euphoria sweeps through global equity markets propelling stocks to regain $21 trillion in value from a March low, the asset class is looking increasingly frothy.While stock luminaries who had advocated for a bull zone look like winners in hindsight, the debate goes on about whether the rally is a bear market bounce, doomed to end. Asia still looks set to end the day with a gain, but stocks in Europe have turned lower, poised for the worst performance in more than a week.Global equities have climbed back to levels last seen in February, when the coronavirus began spreading rapidly outside of China. The 42% surge from a March low is the best advance over an equivalent time-frame since 2009 for the MSCI ACWI Index that includes stocks in both the emerging and developed world. The gauge is now trading at 20 times next year’s profits, the most expensive since 2002.“This rally is a function of government support being thrown behind the economy,” said Paul Sandhu, head of multi-asset quant solutions and client advisory for Asia Pacific at BNP Paribas Asset Management. “There are key risks that could lead to more volatility ahead over the short term, which is why we continue to hedge our portfolios on the downside while still looking for opportunities to add risk for the medium to long term.”So far bulls are in charge. U.S. stocks just crossed an important psychological milestone of recouping this year’s losses. Asia’s equity benchmark is having its seventh straight day of gains, the longest streak in more than two years. And European shares are on course for the best monthly gain since 2009.Factors including a wall of money from the guardians of global economies, the easing of lockdowns and the shockingly positive employment numbers in the U.S. are drawing more buyers to participate, picking up cheaper sectors and adding more fuel to the rally. Yet caution still abounds with some investors increasing hedges for potential volatility ahead.“The risk of a correction will rise if investors continue to price in a rapid recovery, especially for sectors that are vulnerable to another wave of infections or an escalation of tensions between the U.S. and China,” said Tai Hui, chief Asia market strategist at JPMorgan Asset Management.In another sign that the rally is stretched, global share-price gains in the past month have purely come from multiple expansion as earnings forecasts have barely budged since May. Adding to that is the fact the MSCI world measure has been in overbought territory since the start of the month, with the relative strength gauge on the index reaching the highest since January, which is considered a bearish signal by some.Meanwhile, speculative excess has surged to the highest in at least 20 years among U.S. options traders, a negative for stocks over the medium term, according to Sundial Capital Research Inc. And a time-honored strategy of hedging stocks with government bonds has become questionable now that bond yields have plummeted thanks to policy easing across the world.“If everyone is holding stocks just to pass on to the next greater fool, and if the greatest fool is a central bank with infinite liquidity to buy them, then, yes, prices will keep going up,” according to a note from Rabobank on Tuesday.(Adds market performance in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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