Author: therawinformant

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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Baillie Gifford has invested $35 million in Germany-based air-taxi startup Lilium, the Financial Times reported.What Happened The United Kingdom-based private investment firm holds a nearly 4% stake in Lilium as a result of the investment that valued the startup at more than $1 billion, according to the Financial Times.Baillie Gifford is looking for "situations where there is the potential for a really transformative new market or product in the long term, while recognising that these will often take a lot of time to come to fruition," investment manager Michael Pye told the Financial Times.The firm is best-known for being the largest external investor in electric vehicles maker Tesla Inc. (NASDAQ: TSLA) and was also an early investor in Amazon.com Inc. (NASDAQ: AMZN), the Space Exploration Company (or SpaceX), Spotify Technology SA (NYSE: SPOT), and Airbnb Inc.Baillie Gifford, earlier this year, invested in California-based Lilium rival Joby. Pye told the Financial Times that the firm's Lilium funding is higher than what it invested in Joby.Lilium, which is aiming to launch five-seater city-to-city air taxis, has raised $375 million to date, according to the Financial Times.Image Credit: Lilium.See more from Benzinga * IBM Discontinues Facial Recognition Technology, Says It Can't Condone 'Racial Profiling' Or 'Mass Surveillance' * Facebook-Backed Jio Platforms Gets 0M From Abu Dhabi Sovereign Fund As It Looks To Challenge Amazon, Walmart In India * Chinese Online Grocery Seller Dada Welcomes 'Better Auditing And Regulation,' As Company Starts Trading At Nasdaq(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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(Bloomberg) — Occidental Petroleum Corp. is reviewing options for its Middle Eastern assets as it seeks ways to reduce its debt pile, people familiar with the matter said.Houston-based Occidental is considering reducing its stakes in oil and natural gas fields in Oman, according to the people, who asked not to be identified because the information is private. Its holdings in the Gulf sultanate could be valued at more than $1 billion, the people said.The company is also open to divesting other assets in the Middle East, though it isn’t formally soliciting interest, the people said. Outside of Oman, it has a presence in the United Arab Emirates and Qatar.Occidental was saddled with about $40 billion of debt after its purchase of Anadarko Petroleum Corp. last year. It has gone from being a steady, diversified producer to a shale-focused driller that has seen its shares fall more than 40% this year. A slump in energy demand worsened Occidental’s financial situation, forcing it in May to cut a quarterly dividend to the lowest level in decades.Failed DealsThe company has been producing in Oman for more than 30 years, according to Occidental’s website. It has operations at the Safah Field and Block 62 in the north of the country and at the Mukhaizna Field in the south.Occidental has a 40% holding in Abu Dhabi National Oil Co.’s Al Hosn project in the United Arab Emirates and a 24.5% interest in Qatar’s North Field, which both rank among the region’s biggest gas reservoirs. It also owns a stake in Dolphin Energy Ltd., which processes gas from the Qatar project and transports it by pipeline to the UAE.No final decisions have been made, and there’s no certainty the deliberations will lead to a transaction, the people said. A representative for Occidental declined to comment.Occidental shares extended gains in Monday afternoon trading. They were up 17% to $24.40, the highest in more than three months, at the close in New York.The explorer previously tried in 2014 to raise as much as $8 billion by selling a stake in its Middle Eastern business. At the time, it was in talks to sell a 40% interest in the operations to a consortium of government-backed firms from Oman, Abu Dhabi and Qatar. That attempt fell apart amid political turmoil in the region, Bloomberg News reported at the time.More recent divestment plans were derailed when Total SA abandoned a purchase of Occidental assets in Ghana and Algeria.(Updates with closing share price in seventh 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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Shares in Macy’s, Inc. (M) spiked 15% in Monday’s after-hours trading after the company announced the closing on approximately $4.5 billion of new financing.This included its previously announced $1.3 billion of 8.375% senior secured notes, as well as a new $3.15 billion asset-based credit agreement.In addition, the company has amended and substantially reduced the credit commitments of its existing $1.5 billion unsecured credit agreement. Macy’s intends to use the proceeds of the notes offering, along with cash on hand, to repay the outstanding borrowings under the existing $1.5 billion unsecured credit agreement.With the closing of these financings, M now expects to have sufficient liquidity to address the needs of the business, including funding operations and the purchase of new inventory for upcoming seasons, resolving its accrued payables obligations, and repaying upcoming debt maturities in fiscal 2020 and fiscal 2021.“We are pleased with the strong demand from new investors in our notes issuance, which allowed us to tighten pricing and increase the size of the offering” said Jeff Gennette, CEO of Macy’s.“The high quality of our real estate portfolio positioned us well to execute this offering. Additionally, the continued commitment from our bank group allowed us to more than double the size of our existing revolving credit facility” the CEO added.Shares in Macy’s have plunged 44% year-to-date, and analysts have a bearish Moderate Sell consensus on the stock with 3 recent hold ratings and 7 sell ratings. The average analyst price target of $5 also indicates 49% further downside potential from current levels. (See M stock analysis on TipRanks).“We remain Neutral-rated as we continue to favor Kohl’s (KSS) in the department store space, and we expect a highly promotional environment and M’s on-mall presence to weigh on results going forward” wrote Guggenheim analyst Robert Drbul on May 21.Related News: Buckle Down Says Street, As Stitch Fix Sinks 7% Post-Print Zoom (ZM) Is a Winner, but the Stock Is Fairly Valued Here Syracuse Is Said To Be In Talks To Buy Bankrupt J.C. Penney; Shares Leap 55% More recent articles from Smarter Analyst: * Buckle Down Says Street, As Stitch Fix Sinks 7% Post-Print * Brazil’s XP Acquires Majority Stake In Fliper; Shares Spike 12% * Gilead Seeks Europe Remdesivir Approval; Three Analysts Reiterate Bullish Calls * Beyond Meat Pops 22% On Sinodis Food Distribution Partnership In China

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