The good days for the stock market won’t last, says David Rubenstein, a billionaire investor and co-founder of private equity giant Carlyle Group, who cautioned against bullish near-term market expectations citing a disconnect between rising equity prices and a sluggish economy.

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(Bloomberg) — Bank of America Corp.’s profit slid 52% as it joined rivals in preparing for an onslaught of consumer defaults spurred by the pandemic’s economic fallout.Profit at the consumer-banking unit plunged 98% as the coronavirus shuttered much of the U.S. economy and caused tens of millions of Americans to lose their jobs. The company allocated $5.1 billion for loan losses in the second quarter, the most since 2010, as Bank of America joined its biggest rivals in predicting pain to come that contrasts with stock market optimism for a quick economic rebound.Calling it “the most tumultuous period since the Great Depression,” Chief Executive Officer Brian Moynihan said in a statement that “strong capital markets results provided an important counterbalance to the Covid-19-related impacts on our consumer business.”With its 4,300 branches across the country, Bank of America is often seen as a bellwether for the U.S. consumer. Government stimulus measures and bank forbearance have kept some individuals and businesses afloat, but the largest U.S. lenders used the first full quarter with the pandemic to prepare for coming pain.JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. set aside almost $28 billion of credit-loss provisions when they reported results earlier this week, citing a deteriorating outlook.Shares of Charlotte, North Carolina-based Bank of America slipped 3.5% to $23.75 at 7:44 a.m. in early New York trading. They had declined 30% this year through Wednesday.The bank joined other Wall Street firms in profiting from volatility in financial markets resulting from the pandemic. Fixed-income trading revenue beat forecasts in the second quarter, rising 50% to $3.2 billion, while investment banking fees jumped 57% to a record $2.2 billion.Net interest income — revenue from customers’ loan payments minus what the company pays depositors — fell 11% to $10.8 billion in the second quarter. On a fully taxable-equivalent basis, the figure was $11 billion, falling short of the $11.2 billion average estimate of 11 analysts in a Bloomberg survey.In the consumer business, the bank said it had processed about 1.8 million payment deferrals this year, of which 1.7 million were still in place as of July 9.Also in the second-quarter results:The bank’s efficiency ratio, a measure of profitability, worsened to 60% from 59% in the first quarter.Net income fell to $3.53 billion from $7.35 billion a year earlier. Per-share earnings totaled 37 cents, beating the 25-cent average estimate of 23 analysts.(Updates shares in sixth paragraph, adds chart of loan-loss provisions.)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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(Bloomberg Opinion) — The Covid-19 pandemic may have hurt the economy, but for technology stocks it feels like 1999 again. The Nasdaq Composite Index just reached a record high having rebounded about 50% from its low of the year in March. The stock market is not the economy, but it does feels strange for stocks to be soaring in the middle of a deep recession.The difference is timescale: stock prices represent revenue and earnings very far out into the future, not today. If plans for new technology are sound, the outlook can still look bright even though the present seems gloomy. The rationale for sky-high valuations for tech stocks in the late 1990s also came from projected profits in the decades to come. These so-called concept stocks won investors through a compelling story about future potential, even though the company in the near term would generate little-to-nothing in terms of real revenue.Maybe concept stocks were a crazy phenomenon from a more exuberant time, such as Beanie Babies or jelly shoes. But take Tesla Inc. True fans are buying the stock because they believe in a vision of a technologically advanced electric car and other products, while grouchy short-sellers write long, critical blog posts about the company’s weak balance sheet and high debt. Is it better to price the stock on the concept, or on the fundamentals alone? Neither seems like the perfectly accurate way to value the company.Valuations that are too high can lead to vaporware and waste, but a valuation that is too low can become a self-fulfilling prophecy. In other words, if Tesla were valued only on its balance sheet, the company might not be able to raise enough cash to keep building and developing electric cars. It seems a fairly safe bet that Tesla is innovative enough to keep coming up with new inventions, above and beyond their existing revenue lines, but when new products are involved, the expected future profit and revenue over the long term is difficult to predict.Many people would put a high probability on Apple Inc. coming out with a new product, such as virtual reality glasses, but the company’s shares were trading at around a relatively paltry 20 times earnings through much of 2019, which amounted to not much more than future iPhone revenue. Although the ratio has moved up to about 30, that still seems low for a company like Apple and may be a sign investors are shifting away from valuing it just on iPhone revenue. Experienced venture capitalists are happy to take the risk on hypothetical products for early-stage startups, but the stock market hasn’t figured out how to “price in” products that are yet to be created by established public companies.It’s often said that tech companies “ship their org chart,” meaning that the products they create can be directly predicted by the structure of the organization. By looking at the people and incentives, an outside observer should be able to estimate the impact, quality and probability of success of a new product, and perhaps even future revenue. If Apple had hired a world-class team of chip engineers who had all taken a pay cut to work on a cutting edge project, we might expect its share price to rise on the news, though without a better valuation method, we can't yet say precisely by how much.Economist Stian Westlake used the phrase “intangible capital” to describe the benefits a company derives from its people and organizational structure. If we could use an org chart to accurately price intangible assets, it might be easier to value a company for not only its past products, but expected future products as well.To be sure, the difficulty of pricing in new product lines does exist in the realm of private companies. Softbank Group Corp’s Vision Fund made big and bold bets in promising companies, valuing them above what their revenue might suggest. But some of these companies were not able to meet their targets, collapsing under the weight of too much capital. For growing tech unicorns, valued in the $1 billion to $50 billion range, it is certainly difficult to raise money for a new product line based on intangible assets. Capital should be flowing into these highly innovative, cutting-edge companies in the current low-interest rate world, but few understand how to structure the appropriate financing.With an economy in trouble, the path back to prosperity depends on tech companies rapidly scaling up, generating revenue and creating jobs. Finer-tuned pricing of intangible assets could speed up the recovery process, allowing growing tech companies to raise money for new product lines, rather than just to scale up old ones. It could also help them to acquire old economy companies in leveraged deals financed around symbiotic revenue benefits.In some ways, intangible capital is reminiscent of the nascent days of high-yield bonds in the 1980s, in that an accurate formula could change the world. Price it correctly, and you would be able to leverage small amounts of capital to totally reshape the economy instead of promoting breakups and hostile takeovers. So instead of criticizing high stock prices for tech companies, embrace and understand them for they may be the key to the economic recovery. The race is on to figure out the winning formula.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Saku Panditharatne is a consultant for the technology industry. She was formerly an analyst at venture capital firm Andreessen Horowitz and specializes in 3-D graphics and augmented reality.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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While not a mind-blowing move, it is good to see that the Truist Financial Corporation (NYSE:TFC) share price has…

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Beyond Meat (BYND) will start to sell its plant-based meat patties in supermarkets in Brazil as it enters yet another international market this month.The stock jumped 3% to close at $131.75 on Wednesday after the California-based company said that it plans to sell its vegan burgers, sausages and faux beef at 19 stores owned by retail chain St. Marche in Sao Paulo.“Our Brazil market entry marks an important step in furthering our mission of increasing accessibility to plant-based meat globally,” said Beyond Meat in a statement. “As the third-largest market in the world in terms of animal meat consumption, Brazil offers significant opportunity for plant-based meat adoption.”The country known for its barbecues and churrascarias is also the No. 5 market for the world’s health food industry, Beyond Meat said referring to a survey by the Good Food Institute.The move to capture the market in Brazil comes after Beyond Meat earlier this month announced that it will sell its plant-based meat burgers in supermarkets in mainland China through a partnership with Alibaba’s (BABA) Freshippo grocery stores.Back in April, Beyond Meat made the foray into the market in China announcing a partnership with Starbucks (SBUX). The company also teamed up with Yum Brands (YUM), which operates fast-food chains Kentucky Fried Chicken (KFC) and Pizza Hut, to sell Beyond Meat products in China.Beyond Meat is entering new international markets and shifting sales to retail as the coronavirus pandemic is boosting the appetite for healthier eating, while outdoor dining options are limited and consumption in supermarkets is increasing.The company’s expansion deals have helped the value of its share price to more than double since mid-March. Following the impressive rally, the $112.38 average analyst price target now indicates 15% downside potential from current levels. (See Beyond Meat stock analysis on TipRanks)Citigroup analyst Wendy Nicholson earlier this month initiated coverage of the stock with a Sell rating and a $123 price target asking investors to “look beyond the headlines” and divest the stock in view of its high valuation multiples and risk exposure.The analyst cautions that the company faces “near-term pressure as a result of its exposure to the food service segment” as well as “longer-term pressure as the [alternative meat] category becomes more competitive.”For now, the rest of Wall Street analysts are bearish on Beyond Meat’s stock. The Moderate Sell analyst consensus breaks down into 6 Sell and 5 Hold ratings versus 2 Buy ratings.Related News: Beyond Meat Burgers Make Foray Into Alibaba’s Grocery Stores In China Beyond Meat To Sell Cheaper Plant-Based Burgers Ahead Of Summer Season; Stock Jumps 5% Beyond Meat Teams Up With KFC, Pizza Hut In China More recent articles from Smarter Analyst: * Facebook To Increase Oculus Production To 2 Million Units- Report * Google Expands Android Subscription Service To Nine More Countries * Google Brings 5 Game Studios To Stadia To Make Exclusive Games * BioNTech (BNTX): Fast Track Designation Does Not Justify Current Valuation, Says J.P. Morgan

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David Rubenstein, the co-founder of the Carlyle Group and host of “Leadership Live,” discusses the current scope of the U.S. stock market and employment.

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(Bloomberg) — Oil retreated from its highest close in four months after the OPEC+ alliance confirmed it would start tapering output cuts from next month.Futures in New York dropped below $41 a barrel. Saudi Arabia and Russia said the producer bloc would proceed with its plan to add more supply next month and were confident that it wouldn’t hurt oil’s rally, with the tapering to be offset by extra cuts from countries that didn’t meet their targets.Oil was also under pressure from a drop in equities in Europe and Asia. That was despite figures that showed China’s economy returned to growth and expanded more than forecast last quarter.The recovery in China is in stark contrast to other corners of the globe, where the coronavirus continues to rage out of control. That’s leading to a patchy rebound in crude, though there are pockets of strength in some parts of the oil market, with North Sea contracts trading at their strongest levels in five months. All of that has left headline prices struggling to break far beyond $41.“Unless the market makes a convincing jump today, those with bullish inclination will become disillusioned and the recent highs will not be challenged in the near future,” said Tamas Varga, an analyst at brokerage PVM Oil Associates.The Organization of Petroleum Exporting Countries and its allies will withhold 7.7 million barrels a day from the market in August, compared with 9.6 million currently. The actual cut next month will be 8.1 million to 8.3 million barrels a day due to the compensatory curbs from members including Iraq and Nigeria.See also: U.S. Gasoline Stocks Mirror Nation’s Fractured Pandemic ResponseThere were also signs that supplies from Russia will remain low, at least in the short-term. It will ship three cargoes of Urals crude from its Baltic ports in the first five days of August, down from five a month earlier, according to a loading program. Urals loadings were planned at the lowest in a decade for July.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 Dell Technologies (DELL) surged 7% in pre-market trading as the PC maker said that it is considering a spin-off of its 81% stake in cloud computing software maker VMware Inc. (VMW), which could unlock value for shareholders.The stock soared to $56.40, while VMware rose 1.9% to $142.40 in Thursday’s early market trading. Dell said that a divestment could benefit both Dell and VMware shareholders by simplifying capital structures and creating additional long-term enterprise value. A potential spin-off is not expected to occur before Sept. 2021 and would qualify to become tax-free for U.S. tax purposes.If the PC maker decides to pursue a spin-off, it would set up a special committee to negotiate mutually beneficial commercial arrangements, including intellectual property agreements. In that event Dell would seek to negotiate the payment of a special cash dividend by VMware that would be paid on a pro rata basis to all VMware shareholders."For more than 20 years, we've innovated for our customers and created substantial growth and value for both companies and our teams. Regardless of the options we are exploring to create additional value, we are accelerating our strategy – which remains unchanged,” said Dell CEO Michael Dell. “We are focused on winning in the consolidating markets where we operate and innovating across the Dell portfolio to create integrated solutions that turn data into insights and action.”Dell added though that it continues to evaluate a range of strategic options concerning its ownership interest in VMware, including holding on to its current ownership in the company.Meanwhile, five-star analyst Daniel Ives at Wedbush, said that the Dell-VMware “soap opera” has been a multi-year ownership structure partnership that has been a “frustration point” for investors since EMC sold its 81% stake to Dell in 2015.“The likely path in our opinion and the one most appetizing to investors would be a tax-free spinoff for this stake,” Ives wrote in a note to investors. “The Dell ownership structure has been an albatross around the VMware story and ultimately causes the stock to trade at a discount, a dynamic that would be removed if Dell ultimately decided to head down this path.”Ives estimated that if Dell did not own VMware this would add $15 to $20 per share as he expects a positive knee jerk reaction from investors. However, the analyst cautioned that it was too early to pop the champagne yet as there could be many twists and turns in this strategic relationship which could potentially end with no deal at all.Ives maintains a Buy rating on VMware stock with a $175 price target given its “position in the cloud evolution with an expanding product footprint that could see an acceleration of growth for the coming years”.Overall, analysts have a cautiously optimistic outlook on the stock. The Moderate Buy consensus shows 12 Buy ratings vs 6 Hold ratings. The $170.67 average analyst price target implies 22% upside potential over the coming year. (See VMW stock analysis on TipRanks).Related News: Google Snaps Up 7.7% Stake In India’s Jio Platform For $4.5B Intel Capital Snaps Up $255M Stake In India’s Jio Platforms Medtronic To Buy Medicrea For About $154 To Bolster Spine Surgery Business More recent articles from Smarter Analyst: * AstraZeneca Pops Ahead of Covid-19 Vaccine Data Report Due July 20 * Beyond Meat Shares Rise On Sale Of Plant-Based Meat In Brazil * Facebook To Increase Oculus Production To 2 Million Units- Report * Google Expands Android Subscription Service To Nine More Countries

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