5,525 new COVID-19 cases registered in Hungary | The Budapest Business Journal on the web

 Bence Gaál

 Saturday, December 5, 2020, 15:30

The number of active coronavirus cases in Hungary stands at 167,479, with 5,525 new cases and 193 new deaths registered since yesterday, according to data by government coronavirus information site koronavirus.gov.hu.

Image by Shutterstock.com

The death toll stands at 5,706.

Some 19% of active cases are located in Budapest.

The total number of confirmed cases stands at 243,581 up from 238,056 yesterday.

The number of recoveries has risen to 70,396.

Currently, 7,695 COVID-19 patients are hospitalized, 637 of whom are on ventilators.

So far, 1,918,043 tests have been conducted at accredited laboratories. Some 53,315 people are currently in compulsory home quarantine.

Looking at all diagnosed cases until now, Budapest remains the most affected area of the entire country, with the number of cases (both active and inactive) reaching 50,786. Pest County is the second most affected, with 31,617 cases, followed by Győr-Moson-Sopron County (15,479 cases).

The number of curfew violations registered by authorities throughout the country so far has reached 9,582.



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Schumpeter – Nestlé gives a flavour of the future | Business

SWITZERLAND IS KNOWN for its timepieces. But it is also home to another business that for most of its history has operated with metronomic regularity. That is Nestlé, the world’s biggest food company. Established in the 1860s in Vevey, a small town on the shores of Lake Geneva that remains its home to this day, it has long been seen as an opaque behemoth with an insular culture and the occasional brush with scandal. Yet a billion of its products are consumed every day. Its sales last year surpassed $93bn. When it talks coffee, it talks in 100bn cupfulls. Data may be the new oil in America and Asia, but in Europe hot beverages are hotter than either crude or computing. With a market value of $320bn, Nestlé is worth more than Royal Dutch Shell, the continent’s biggest energy firm, and SAP, its software giant.

Many global food firms have been models of reliability. Other venerable names, such as Campbell’s, Danone, Kraft Heinz and Unilever (which sells more non-food items than food), also have roots stretching back over a century. Yet five years ago, amid a sharp slowdown in growth, the industry suddenly found itself under siege. 3G, a Brazilian private-equity group with a zeal for ruthless cost-cutting, merged H.J. Heinz and Kraft Foods. Two years later American activists targeted Nestlé, demanding the same recipe. The same year Kraft Heinz tried and failed to take over Unilever, and later saw its profits tumble, leaving 3G’s reputation in tatters.

Europe’s consumer-goods business is still growing at about half the pace it did a decade ago. It badly needs a caffeine shot. No one has shown better how to administer one than Mark Schneider, Nestlé’s first chief executive from outside the firm in almost a century—and the barista-in-chief of its three-year turnaround.

Mr Schneider, a straight-talking German with an American passport and a fondness for quips, is the perfect foil for bossy hedge funds. He is not prone to panic. But nor is he complacent. He came from outside the food industry, so sees it with fresh eyes. He carried out what Martin Deboo of Jefferies, a bank, calls “the chief-executive version of Blairism”, steering a middle course between the aggressive profit-margin targets desired by the Americans and the meagre restructuring tolerable to the Swiss. Most significant, he revived confidence in organic sales growth, a metric that had fallen at Nestlé from an annual 7.5% in 2011 to 2.4% the year he took over. During the slash-and-burn era of 3G, sales growth was for wimps. No longer—partly thanks to Mr Schneider.

The importance of sales growth is hard to overstate in food. Bernstein, a broker, calls it the “lifeblood” of the industry. In recent years it has been pummelled by changing diets, digitalisation and deflation in parts of the rich world, as well as sluggishness in emerging markets. But Mr Schneider swiftly found remedies.

The first was innovation. Thanks to e-commerce, small upstart brands were able to elbow aside the behemoths and sell directly to consumers. He responded by forcing boffins to bring Nestlé’s ideas to market more quickly, often digitally. The three years it sometimes took them was fine for a car, but not for a chocolate bar, he says. New ideas he cherishes include allergy-busting cat foods and vegan burgers. Second, he was quick to strike transformative deals. Within six months of licensing Starbucks coffee in 2018, Nestlé had already launched 24 of the chain’s products. Third, he bought and sold companies, adding to fast-growing nutritional-health businesses and selling down pedestrian ones such as ice cream in America and packaged meat in Europe.

Nestlé has sped up growth in other areas, too. It is moving relentlessly upmarket. Last year the share of sales from premium products rose to more than a quarter, including items with naked snob appeal such as “flat white over ice” Nespresso pods. It has joined the craze for plant-based foods and other healthy fare (never mind that this makes its confectionery business look increasingly out of place). And it is desperate to improve its reputation for sustainability. On December 3rd it said it would invest SFr1.2bn ($1.3bn) over five years to help its farmers improve their soils as part of a SFr3.2bn effort to combat climate change. It has also pledged to make packaging recyclable or resuable by 2025. These are attempts to soften its image as a corporate goliath, which puts off not just young shoppers but snobby well-off ones, too.

For now, investors are impressed. As Mr Deboo notes, the share price has already awarded Nestlé ten out of ten for the turnaround, though that may be premature. Sales growth has still not recovered to the 4-6% a year that the firm once promised. Infant formula remains a laggard. So does water, with its cheapest bottled products, consumed in offices, battered by the pandemic. And Nestlé is not immune to industry-wide problems. Growth is slowing in emerging markets as people there spend less on ingestible treats and more on digital goods. Moreover, low incomes among the young will dampen their appetite for premium products.

Not so sweet

Relatively speaking, the virus has been kind to Nestlé. Most of its products are used at home, rather than on-the-go, so extra sales for the pantry easily eclipsed what was lost at the sweet shop. Danone, a European rival that was already struggling to keep up with Nestlé at the start of the year, has slipped much further behind.

Still, Mr Schneider is no blithe optimist. In a recent Zoom meeting held amid stockmarket euphoria about the prospects for a covid-19 vaccine, he was cautious. As a former health-care executive used to handling cold chains, he expressed doubts about the ability to distribute vaccines at the required temperatures, especially in the developing world. The longer it takes to spread the vaccine, the higher public debts will pile up, potentially casting a “long shadow” over the 2020s. On top of that, he notes, a demographic challenge is looming with rising numbers of elderly requiring medical care. “I’m quite muted in my outlook,” he admits. But Nestlé, in more than 150 years of history, has survived worse.

This article appeared in the Business section of the print edition under the headline “Feathering its own Nestlé”

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Wall Street heads back toward highs despite dour jobs report – Long Island Business News

U.S. stocks are ticking higher and heading back toward record highs on Friday, despite discouraging data detailing how much damage the deepening pandemic is doing to the job market.

The S&P 500 was 0.6% higher in afternoon trading, putting it on pace to erase its slight loss from the day before and return to a record. The Dow Jones Industrial Average was up 177 points, or 0.6%, at 30,144, as of 2:34 p.m. Eastern time, and the Nasdaq composite was 0.4% higher.

The gains were broad, with about 80% of the companies in the S&P 500 moving higher. Technology, energy and industrial companies drove a big share of the gains, outweighing losses in utilities stocks and companies that rely on consumer spending.

Hopes remain deeply rooted on Wall Street that one or more coronavirus vaccines are coming to rescue the global economy next year. But efforts to contain a surge in new virus cases has stoked worries about more economic pain for companies and consumers.

That’s why Friday’s much weaker-than-expected jobs report perversely helped lift stocks. Investors are betting the report may be bad enough to help kick Congress out of its paralysis and deliver more support for the economy.

“In a twist of irony, the bad jobs number is positive for markets today,” said Keith Buchanan, portfolio manager at Globalt Investments. “The market is telling us today that if the labor market continues to show slowing momentum, it’s much more likely the powers that be in D.C. agree to something that’s material.”

The initial reaction in financial markets to November’s disappointing jobs report was to fall. Treasury yields sank, and U.S. stock futures wobbled after the data showed employers added just 245,000 jobs last month, half of what economists were expecting. It marked a sharp step down from October’s gain of 610,000 and was the fifth straight month of slowing growth.

Economists called the numbers disappointing and evidence that the worsening pandemic will likely destroy more jobs and income for the economy in the coming months, which are shaping up to be a bleak winter.

But markets quickly firmed amid hopes that the dour data could spur some action from Congress, which has dithered for months after much of its last round of financial support for the economy expired during the summer.

“Overall, today’s report is beckoning lawmakers to act on additional fiscal stimulus measures in order to bridge the output gap in the economy until a vaccine is deployed, and the longer they hold out the wider the gap may become,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Democrats and Republicans have been making on-and-off progress on talks for another round of support for the economy, including aid for laid-off workers and industries hit hard by the pandemic. Momentum has seemed to swing back to “on” this week after Democrats signaled willingness to accept a smaller package than they were earlier demanding.

House Speaker Nancy Pelosi and Senate Majority Leader Mitch McConnell spoke on the phone about a possible deal on Thursday, and lawmakers from both parties have been voicing support for a bipartisan deal. The glimmers of progress follow months of cajoling and pleading by economists and investors, who say such aid is essential. Many obstacles remain, though.

The hope in markets is that financial support from Washington could help carry the economy through a dark winter. Surging coronavirus counts, hospitalizations and deaths are pushing governments around the world to bring back varying degrees of restrictions on businesses. They’re also scaring consumers away from stores, restaurants and other normal economic activity.

Hopefully, the economy will be able to stand more on its next year after one or more COVID-19 vaccines help start a slow return to more normal conditions.

Such hopes have helped stocks muscle higher since early November, though the momentum has slowed a bit recently as the pandemic accelerates at a troubling rate. The S&P 500 is on pace to close this week with a 1.5% gain, following up on November’s 10.8% surge.

Stocks that would benefit most from a reopening, healing economy have been clawing back some of their steep plummets from earlier in the year, such as airlines and other travel-related companies. Stocks of smaller companies have also recently helped lead the market after earlier lagging. The Russell 2000 index of small-cap stocks was up 1.7% in Friday trading, more than double the gain for the big stocks in the S&P 500.

Stocks of energy companies were some of Friday’s best performers, as oil prices climb further out of the hole they plunged into during the spring following a collapse in demand. Diamondback Energy jumped 12.1%, and Occidental Petroleum gained 11.3% for two of the biggest gains in the S&P 500. Both stocks remain down by about 50% for the year, though.

In European stock markets, the German DAX was up 0.3%, while the French CAC 40 rose 0.6%. The FTSE 100 in London was up 0.9%.

In Asia, Japan’s Nikkei 225 slipped 0.2%, but other markets were stronger. South Korea’s Kospi gained 1.3%, Hong Kong’s Hang Seng gained 0.4% and stocks in Shanghai added 0.1%.

The yield on the 10-year Treasury shook off an initial stumble following the release of the jobs report to rise to 0.97%, up from 0.91% late Thursday.

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Gov’t lifts total ban on conferences, workshops

CONFERENCES, workshops and other similar activities are now allowed in areas under the general quarantine level, a move that will help boost the battered tourism sector.

“While the pandemic has taught organizers to embrace technology, some gatherings in a physical set-up can now proceed, with health and safety protocols in place. We are optimistic that the country’s MICE (Meetings, Incentives, Conferences Exhibitions) sector shall start to thrive again,” Tourism Secretary Bernadette Romulo-Puyat said in a statement on Friday.

Under the eased policy approved by the national task force against the coronavirus, “workshops, trainings, seminars, congresses, conferences, board meetings, colloquia, conclaves, symposia, and consumer trade shows” can be held at a maximum 30% capacity of the venue.

Allowed venues under Resolution No. 87 are “restaurants, in general; restaurants attached to hotels; ballrooms and function halls within hotels; venues within hotel premises; and mall atria.”

Ms. Puyat noted that social events such as birthdays, weddings, Christmas and office parties, pageants, award events, gala receptions, product launch, political gatherings, cultural festivities, and sporting events “are not covered” by the new resolution.

Task Force and Palace Spokesperson Harry L. Roque said the Department of Tourism and the Department of Trade and Industry will issue joint guidelines on the conduct of these events.

The Management Association of the Philippines welcomed the government’s decision, citing its benefit to the economy.

“It is consistent with the government’s desire to return to normalcy. It will lend a helping hand to the hotel and accommodation industry, which is highly impacted by the pandemic,” the group said in a statement on Friday signed by its president, Francis E. Lim.


Meanwhile, the police is deploying more officers in Metro Manila to help ensure the enforcement of health protocols as the holidays draw near and more people are going out of their homes.

“We are focusing on areas of convergence such as markets, public markets, malls, churches, and ports, sea ports, and public transportation,” Police Deputy Chief of Staff Cesar R. Binag, speaking in Filipino, said in a briefing Friday.
Mr. Binag, who is also the Joint Task Force COVID Shield chief, said they are also in talks with the management of shopping malls to strengthen protocols.
Coronavirus cases in the capital region has been on a decline, but it remains one of the country’s epicenters of the outbreak. — Gillian M. Cortez

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Starling Banks proves customer experience comes first

Starling Bank has had its forward-tech thinking banking approach rewarded this year, becoming the first digital bank of its kind to make profit.

I have to admit that on a personal level I’ve watched the tech world take over the traditional banking methods with absolute glee. When fiat currencies have been rife for years it made no sense to have such antiquated systems of work running the customer experience. None, whatsoever. For someone to march in and declare that it was time to challenge the status quo was a breath of fresh air. Showing the world that change against enormous adversity can be achieved with room for true expansion with a secure business ethos moving forwards. All hail Anne Boden, CEO and Founder of Starling. Note needs to be made to her every day for doing something that the millions of us just sat at home thinking: ‘well wouldn’t it be nice if …’

Starling Bank has attributed this success to a strong momentum in customer accounts and revenues, coupled with a stable opex base. With nearly 1.8 million accounts, c.£4 billion in deposits and c.£1.5 billion of lending, Starling expects to be profitable on a monthly basis going forward as it continues to grow and gears up to scale across Europe.

Whilst Covid caused serious disruption to many of their clients, Starling’s systems are all online which meant that they were able to adapt very quickly, listen to customer feedback and win new clients.

Rivals, Revolut and Monzo posted losses and spoke openly now of their growth trajectory and plans to shift their focus and strategies from awareness to profit in order to break even and profit ones. As high street banks race to innovate and create new apps they have lost their status as stalwarts of society and are viewed now as a time costing exasperation.

In fact, Starling is winning more customers than any other UK bank through their Current Account Switch Service. In the second quarter of the year, they recorded the highest switching gains of any bank in the UK with nearly 12,000 customers switching to them on a net basis. 2020 has also seen them topping the Which? customer satisfaction table with an overall score of 88% and recommended provider status for the second year in the row.

In terms of how and why they’re storming their marketplace, it has a lot to do with Anne Boden’s initial pitch which still rings true today. It’s a powerful message and one which every SME business owner needs to read and re-read again until their mantra for change becomes a mantra for their own companies. Cut and paste this comment and apply it to your own business in 2021 …

‘We’re not like most companies where change is seen as a risk, so everything is done to minimise change. To us, the biggest risk is standing still and not changing.

The reason Starling keeps powering on is that we don’t think like a bank. As per my original pitch, we are a technology company. Today, banking is seen as a tech business. Starling has played a huge part in making that happen.’

Starling generated total operating income of £9.0m for the month of October 2020, which represents an annualised revenue run rate of c.£108m. This figure is split £5.5m of net interest income and £3.5m of gross fees and commissions income.

This is a 4x increase in revenue compared to 12 months ago, and a c.30% increase from Starling’s last trading update 3 months ago. Interest income continues to be supported by strong growth in lending volumes, particularly the extension of government-backed lending schemes.

Interchange income continues to perform well, having increased over 20% between July and October 2020, despite the increased COVID-19 restrictions put in place around the country in recent months. This is the result of strong primary account growth, as well as increased customer engagement and card spend. The vast majority of our transactions continue to occur domestically with international spend declining after a strong recovery over the summer months.

‘We’ve continued to launch new products to the market, including chargeable subscription features such as the SME Toolkit and Kite card. While there has been strong uptake of these products, they are still a small contribution to operating income relative to interest income and present further upside to revenues and profitability in the future.’

‘Our goal has always been giving our customers the bank they tell us that they want and one which puts them in control of their money and their data. We know exactly what our customers want too, because they tell us every day. We’ve always welcomed and encouraged the interaction. Their suggestions, positive and negative, help us stay ahead of the curve when it comes to new product development. Plenty of Starling’s premium products you now see are as a result of someone getting in touch and saying: wouldn’t it be great if …?’

In terms of 2021, Starling are looking to scale their offering across Europe. Anne continued: ‘We’ve learned new and better ways of working in this most unusual and difficult of years. I fully expect there will be long-term improvements to the world of work in banking and elsewhere once a new kind of normality resumes.

‘I’m equally certain that we will become a formidable competitor in the European banking market as we gear up to scale across Europe. We know that our technology is hugely scalable because our tech team runs a constant simulation at around ten times our current capacity. We’re prepared for a sudden influx of customers and transactions. In fact, we’re prepared for pretty much anything.’

I think there are many valuable lessons that Business Matters readers can learn from the Starling ethos and journey. Crucially at this moment in time, as 2021 strategies are being researched and composed, I will every reader to read and re-read Anne’s quote above on how they view change.  Every business has had to deal with the reality of this during 2020 and hopefully many of you have been quick to adapt and conquer. Moving forwards if you spend time doing a SWOT analysis for the past twelve months and ‘not adapting to change quickly enough’ comes up, you know that it needs to be looked at for the next year. Call it ‘innovating in 2021’ if that sits better with you and your team, either way, to innovate means growth towards a brighter future for your team, company and goals. It can be incredibly empowering … and that will be my next article.

Cherry Martin

Cherry Martin

Cherry is Associate Editor of Business Matters with responsibility for planning and writing future features, interviews and more in-depth pieces for what is now the UK’s largest print and online source of current business news.

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Kia recalls 295,000 U.S. vehicles for fire risks

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WASHINGTON — Kia Motors Corp said on Saturday it is recalling 295,000 U.S. vehicles for engine fire risks.

The Korean automaker said the recall covers some 2012-2013 model year Sorento, 2012-2015 Forte and Forte Koup, 2011-2013 Optima Hybrid, 2014-2015 Soul, and 2012 Sportage vehicles because an engine compartment fire can occur while driving.

Dealers will inspect the engine compartment for fuel or oil leaks, perform an engine test and make any repairs including engine replacement, as necessary. Kia said it is currently developing a Knock Sensor Detection System software update.

Last week, Kia and affiliate Hyundai Motor Co agreed to a record $210 million civil penalty after U.S. auto safety regulators said they failed to recall 1.6 million vehicles for engine issues in a timely fashion.

The Korean automakers agreed to consent orders after the U.S. National Highway Traffic Safety Administration (NHTSA) said the automakers inaccurately reported some information to the agency regarding the recalls.

Kia’s civil penalty totaled $70 million, including an upfront payment of $27 million, requirements to spend $16 million on specified safety measures, and a potential $27 million deferred penalty.

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Stock Market Rally Outlook Pros And Cons; Apple Stock, Google, PayPal Are Buys Now| Investor’s Business Daily

Dow Jones futures will begin trading Sunday evening, along with S&P 500 futures and Nasdaq futures. The stock market rally continued last week, with broad-based gains and many leaders delivering powerful gains, including Qualcomm stock,  CrowdStrike (CRWD), Advanced Micro Devices (AMD) and, to a lesser extent, Apple (AAPL).


Apple stock is buyable from early entries. PayPal (PYPL), Etsy (ETSY), FedEx (FDX) and Google parent Alphabet (GOOGL) are hovering just above buy points at record highs.

CrowdStrike stock, Qualcomm (QCOM) are greatly extended. AMD stock is slightly extended, but could drift back into buy range or form a high handle.

Apple, CrowdStrike and AMD stock are on IBD Leaderboard. Qualcomm stock, Google, AMD and FedEx are on SwingTrader. PayPal stock is an IBD Long-Term Leader. Etsy stock, AMD and PayPal are on the IBD 50.

While there are a number of reasons to be positive about the market rally, there are also some troubling signs. Investors should weigh the pros and cons for the stock market rally outlook.

Why This IBD Tool Simplifies The Search For Top Stocks

Dow Jones Futures Today

Dow Jones futures were open for trading at 6 p.m. ET Sunday. S&P 500 futures and Nasdaq 100 futures.

Remember that overnight action in Dow futures and elsewhere doesn’t necessarily translate into actual trading in the next regular stock market session.

Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live.

Coronavirus News

Coronavirus cases worldwide reached 66.59 million. Covid-19 deaths topped 1.53 million.

Coronavirus cases in the U.S. have hit 14.85 million, with deaths above 286,000. Newly reported Covid cases topped 235,000 on Friday, yet another record high.

The U.K. will giving doses of the Pfizer (PFE) and BioNTech (BNTX) coronavirus vaccine in a few days. An FDA panel will review the Pfizer vaccine, with emergency approval seen soon after that.

Stock Market Rally Last Week

U.S. Stock Market Today Overview

IndexSymbolPriceGain/Loss% Change
Dow Jones(0DJIA)30217.77+248.25+0.83
S&P 500(0S&P5)3699.13+32.41+0.88
Nasdaq(0NDQC )12464.23+87.05+0.70
Russell 2000 (IWM)188.23+4.31+2.34
IBD 50 (FFTY)39.67+0.17+0.43
Last Update: 4:06 PM ET 12/4/2020

The stock market rally had another strong performance, buoyed by stimulus deal talk, coronavirus vaccine progress and

The Dow Jones Industrial Average rose 1% in last week’s stock market trading. The S&P 500 index climbed 1.7%. The Nasdaq composite advanced 2.1%.

Among the best ETFs, the Innovator IBD 50 ETF (FFTY) advanced 0.9%. The iShares Expanded Tech-Software Sector ETF (IGV) was up just 0.6%. While there were soaring software stocks last week, IGV is dominated by big-cap software names that were generally lackluster, while Salesforce.com (CRM) was a notable drag. The VanEck Vectors Semiconductor ETF (SMH) vaulted 6.3%.

Apple Stock In Buy Range

Apple rose 4.65% last week to 122.25. AAPL stock cleared a downward-sloping trend line as it rebounded from its 50-day line, offering an aggressive entry. Apple stock also topped a 122.09 early entry. Another early entry is 125.49. The official buy point for AAPL stock is 138.08. The relative strength line for Apple stock is showing a little improvement, but has been trending lower since early September. But that follows a strong rise since January 2019, reflecting an impressive run of outperformance vs. the S&P 500 index for AAPL stock.

Google stock is slightly extended from a cup-base buy point of 1,726.20, but it’s just above a short consolidation right above that base. This entry is 1,816.99. Google stock climbed 2.1% last week to 1,823.76.

FedEx stock rose 2.6% last week to 294.48, moving above a 293.40 buy point. Investors could have used a rebound from the 10-week line to get an early entry into FDX stock in the prior couple of weeks.

PayPal stock rallied 3% to 217.77, above a 215.93 buy point from a short consolidation next to a prior base. That followed a 9.7% spike in the prior week, offering some early entries for PYPL stock.

Etsy stock fell 3.4% last week, but pared losses to finish at 155.63, just above the 154.98 buy point, according to MarketSmith analysis. That followed a 14.6% surge in the prior week, offering multiple early entries as well. Etsy stock could be forming a short consolidation right about the buy point, much like Google stock did.

Five Stocks Near Buy Points After Finding Bullish Support

Stock Market Rally Pros

Last week was the second straight week of solid or strong gains for the stock market rally. The Dow Jones, S&P 500 index and Nasdaq composite, finished at the top of their weekly ranges.

The stock market rally is showing breadth. Software, chips, IPOs are all doing well, as well as some medical products companies. But real economy names such as Caterpillar (CAT) and Boeing (BA) are booming.

Finally, where the market rally is showing breadth, leading stocks continue to outperform, with several new breakouts in the past week.

All of those reasons suggest that the stock market rally is in good health, with the prospect for further gains.

Stock Market Rally Cons

There’s a point on a ladder where it’s still relatively safe, but if you take one more step up, you’re suddenly in a precarious spot. The stock market rally doesn’t look extended on the major indexes right now, but it’s getting close. Right now the Nasdaq is 6.5% above its 10-week line. That’s not too worrisome, but if the Nasdaq becomes more extended, the risks of a pullback will rise, with a greater danger than the pullback will be short.

Apple stock’s weekly gain aside and Google’s generally solid performance, big-cap techs have been generally lackluster. If those giants get on a roll, the stock market rally will look overheated in a hurry.

Meanwhile, bullish sentiment in the market rally is already worrisome. The bulls vs. bears measure of investment newsletters’ sentiment is at the highest since early 2018. It’s at levels associated with at least short-term tops. Other psychological indicators, such as the put/call ratio and the CBOE Volatility Index also point to growing complacency. Greed and complacency don’t spike the way fear does, so high levels of bullishness can continue for some time before a stock market rally falters.

Finally, many segments of the market are showing some froth. Many IPOs, many in the software space have skyrocketed over the last several weeks. There also many other leading stocks that have seen sizeable gains in the last couple of weeks and are now well above their 10-week lines, including Qualcomm stock and some other Apple chipmakers such as Qorvo (QRVO) and Taiwan Semiconductor (TSM).  While not necessarily extended, the broader trend raises questions about how much further growth stocks can rise.

One positive note is that some frothy niches have been correcting relatively normally, and without a broad market sell-off. Chinese EV makers Nio (NIO), Li Auto (LI) and Xpeng Motors (XPEV) all tumbled 20% or more last week. Recent IPOs Palantir (PLTR) and Corsair Gaming (CRSR), which recently were more than 50% above their 10-day moving averages, have come back without breaking apart or triggering a wider sell-off. So far, there hasn’t been a day when growth stocks suffer 5% losses broadly.

What You Should Do Now

Review your stocks, especially your winners. Make sure they’re not too extended. Are you overexposed overall or in a particular sector? If you bought hot software or IPO names, those capital gains might be boosting your exposure to a specific sector, leaving you vulnerable to a targeted market sell-off.

More broadly, for the past several weeks it’s been easy for investors to make money. That can be a signal to be cautious.

While this article discussed near-term reasons to be bullish or bearish about the stock market rally, the market is going to do what it’s going to do. Don’t try to guess what stocks are going to do. What you can do is pay attention to what the market is doing right now, and prepare accordingly.

At some point, whether it’s next week or next year, the stock market rally is going to have a retreat. That doesn’t necessarily mean the end of the rally. But investors should be ready to deal with a short-term pullback or a longer-lasting correction.

Read The Big Picture every day to stay in sync with the market direction and leading stocks and sectors.

Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.


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Rajinikanth’s political party will fight on all 234 seats in 2021 TN Assembly elections

CHENNAI: The political advisor of actor-turned-politician Rajinikanth, Tamilaruvi Manian on Saturday said that their political party which will be launched in January 2021 will fight on all 234 seats in the next Assembly elections.

“We will contest on all 234 seats in next Assembly elections. Our politics will be spiritual politics unlike the politics of hatred, currently being practised. We will not slam anybody,” Manian told reporters here.

Earlier on Thursday, putting an end to all speculations, Rajnikanth had announced that he would launch his political party in January 2021, months ahead of the Assembly polls in Tamil Nadu.

He said an official declaration regarding the same will be made on December 31.

In a brief statement released on Twitter, Rajinikanth said that his party would fight the Assembly election in 2021 and “emerge victorious”.

The superstar, who announced his entry into politics in 2017, at a time when Tamil Nadu faced a vacuum after the demise of AIADMK chief Jayalalithaa and ailing DMK chief M Karunanidhi, tweeted: “A political party will be launched in January; Announcement regarding it will be made on December 31.”

Tamil Nadu is set to go to Assembly elections in 2021.

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Tesla says Black people hold just 4% of its U.S. leadership roles

FILE PHOTO: Tesla Inc CEO Elon Musk speaks onstage during a delivery event for Tesla China-made Model 3 cars at its factory in Shanghai, China January 7, 2020. REUTERS/Aly Song/File Photo

December 5, 2020

(Reuters) – Black employees make up just 4% of Tesla Inc’s American leadership roles and 10% of its total workforce in the country, the electric carmaker has disclosed in its first U.S. diversity report.

Women comprise 17% of the company’s U.S. leadership roles – directors and vice presidents – and 21% of the overall workforce, according to the report. The figures for Asian, Black and Hispanic people combined are 33% and 60%.

The carmaker noted, though, that leadership roles were a “very small cohort”, or less than 0.4%, of its workforce.

Elon Musk’s Tesla, whose meteoric rise has seen it become the most valuable auto company in the world and worth about $550 billion, acknowledged the lack of representation.

“We know that our numbers do not represent the deep talent pools of Black and African American talent that exist in the U.S at every level – from high-school graduates to professionals,” it said in the Diversity, Equity and Inclusion Impact Report https://www.tesla.com/sites/default/files/downloads/2020-DEI-impact-report.pdf 2020 published on Friday.

“While women are historically underrepresented in the tech and automotive industries, we recognize we have work to do in this area,” it added.

Tesla, based in Palo Alto, California, said it planned to increase representation of all under-represented groups next year and would be recruiting at historically Black colleges and universities.

Nasdaq Inc filed a proposal with the U.S. Securities and Exchange Commission on Tuesday that, if approved, would require all Nasdaq-listed companies to adopt new rules related to board diversity.

The rules would require most of the companies to have, or publicly explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+.

(Reporting by Aakriti Bhalla in Bengaluru; Editing by Pravin Char)

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Robo-surveillance shifts tone of CEO earnings calls

When Man Group chief executive Luke Ellis discusses his investment company’s results with analysts he chooses his words carefully. He knows better than most that the machines are listening.

The crown jewel of Man is its $39bn hedge fund group AHL, whose algorithms scour huge data sets for profitable signals that feed into investment decisions.

One of the hottest areas in this field is “natural language processing”, a form of artificial intelligence where machines learn the intricacies of human speech. With NLP, quant hedge funds can systematically and instantaneously scrape central bank speeches, social media chatter and thousands of corporate earnings calls each quarter for clues. 

As a result, Mr Ellis’s quant colleagues have coached him to avoid certain words and phrases that algorithms can be particularly sensitive to, and might trigger a quiver in Man’s stock price. He is much more careful about using the word “but”, for example.

“There’s always been a game of cat and mouse, in CEOs trying to be clever in their choice of words,” Mr Ellis says. “But the machines can pick up a verbal tick that a human might not even realise is a thing.” 

This is a growing phenomenon. Machine downloads of quarterly and annual reports in the US — scraped by an algorithm rather than read by a human — has rocketed from about 360,000 in 2003 to 165m in 2016, according to a recent paper by the US’s National Bureau for Economic Research. That was equal to 78 per cent of all such downloads that year, up from 39 per cent in 2003.

The paper — How to Talk When a Machine Is Listening: Corporate Disclosure in the Age of AI — points out that companies are keen to show off their business in the best possible light. They have steadily made reports more machine-readable, for example by tweaking the formatting of tables, as a result of this evolving analysis.

“More and more companies realise that the target audience of their mandatory and voluntary disclosures no longer consists of just human analysts and investors,” authors Sean Cao, Wei Jiang, Baozhong Yang and Alan Zhang note. “A substantial amount of buying and selling of shares are triggered by recommendations made by robots and algorithms which process information with machine learning tools and natural language processing kits.”

However, in recent years the corporate adjustment to the reality of algorithmic traders has taken a big step further. The paper found that companies have since 2011 subtly tweaked the language of reports and how executives speak on conference calls, to avoid words that might trigger red flags for machine listening in.

Not coincidentally, 2011 was when Tim Loughran and Bill McDonald, two finance professors at the University of Notre Dame, first published a more detailed, finance-specific dictionary that has become popular as a training tool for NLP algorithms. 

Since 2011, words deemed negative in the Loughran-McDonald dictionary have fallen markedly in usage in corporate reports, while words considered negative in the Harvard Psychosociological Dictionary — which remains popular among human readers — show no such trend. 

Moreover, using vocal analysis software, the authors of the National Bureau for Economic Research paper found that some executives are even changing their tone of voice on conference calls, in addition to the words they use. 

“Managers of firms with higher expected machine readership exhibit more positivity and excitement in their vocal tones, justifying the anecdotal evidence that managers increasingly seek professional coaching to improve their vocal performances along the quantifiable metrics,” the paper said. 

Some NLP experts say some companies’ investor relations departments are even running multiple draft versions of releases through such algorithmic systems to see which scores the best. 

One word can say a lot . . .

















Source: Loughran-McDonald dictionary

“Access to NLP tools has become an arms race between investors and management teams. We see corporates increasingly wanting to have access to the same firepower that hedge funds have,” says Nick Mazing, director of research at Sentieo, a research platform. “We are not far from someone on a call reading ‘we said au revoir to our profitability’ versus ‘we recorded a loss’ because it reads better in some NLP model.”

However, Mr Mazing said that NLP-powered algorithms are also continuously adjusted to reflect the increasing obfuscation of corporate executives, so it ends up being a never-ending game of fruitless linguistic acrobatics. 

“Trying to ‘outsmart the algos’ is ultimately futile: buyside users can immediately report sentence misclassifications back to the model so any specific effort to sound positive on negative news will not work for long,” Mr Mazing says. 

Indeed, most sophisticated NLP systems do not rely on a static list of sensitive words and are designed to both identify problematic or promising combinations of words and teach themselves a chief executive’s idiosyncratic styles, Mr Ellis notes. For example, one CEO might routinely use the word “challenging” and its absence would be more telling, while one that never uses the word would be sending as powerful a signal by doing so.

Machines are still unable to pick up non-verbal cues, such as a physical twitch ahead of an answer, “but it’s only a matter of time” before they can do this as well, Mr Ellis says.

Twitter: @robinwigg

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