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Exxon Gets Kicked Out Of The Dow Jones Industrial Average – OilPrice.com

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Exxon Gets Kicked Out Of The Dow Jones Industrial Average | OilPrice.com

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Exxon is being kicked out of the Dow Jones Industrial Average index, where it has had a place since 1928. The reason: the Dow needed to make space for other, more valuable companies—and Apple’s stock split, CBS News reports.

The change will be effective on August 31.

Exxon, which was the oldest member of the index for the last two years after Dow removed GE, has been one of the most valuable companies in the U.S. and the world for decades. That is until Big Tech showed up and began changing the world, its stock reflecting this change by swelling market caps.

When Apple recently passed the $2-trillion valuation mark for a few hours, it became the most valuable company in the world.

Meanwhile, Big Oil—and Exxon specifically—hasn’t been faring all that well. Energy, which featured solidly on the index and in people’s lives a few decades ago, is being booted out by technology—Exxon’s replacement on the DJIA is a software company, Salesforce.

And then there is the climate change narrative and the accusations that Exxon knew about it but did not do anything about it. And it is not doing anything about it still, according to critics, unlike European supermajors, which are all but racing towards renewables.

Meanwhile, the double blow from the Saudi price war and the pandemic hit the world’s largest public oil company hard. Exxon reported two quarterly losses this year, blaming oil prices and the effect of the pandemic on oil’s fundamentals. It is reducing its production in the face of lower demand and adjusting its spending plans like its peers to weather the worst of the crisis.

In the end, however, it is just about its share price. At a little over $42 a piece at the time of writing, Exxon is just too cheap for the DJIA, cheaper than the only other remaining energy company on the index: Chevron. Chevron is trading above $82 per share.

By Irina Slav for Oilprice.com

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TSX joins global stock market sell off as coronavirus fears refuse to go away – CBC.ca

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The TSX joined stock markets around the world in a new round of selling off Monday, as surging cases of the coronavirus reignited concerns that the economic impact of the pandemic is still far from over.

The S&P/TSX Composite Index was down by almost 400 points or more than 2.5 per cent nearing midday, as health-care companies, energy companies, mining companies, banks and even tech names were all lower.

Losses began in Asia as soon as trading opened for the week, and they accelerated in Europe on worries about the possibility of tougher restrictions there to stem rising coronavirus counts.

In New York, the broad S&P 500 was down by 84 points or 2.5 per cent, while the Dow Jones fared even worse, down almost 1,000 points or 3.5 per cent.

Bank stocks had sharp losses Monday morning after a report alleged that several of them continue to profit from illicit dealings with criminal networks despite being previously fined for similar actions.

Shares in technology companies have been on fire for the past six months, as pandemic lockdowns have caused booming demand for online services such as Amazon, Netflix, Apple and Facebook.

But tech companies have been selling off of late on fears that they have risen too far, too fast.

“Stock markets around the world are trading lower to start the week amid mounting uncertainty,” said Colin Cieszynski, chief market strategist with SIA Wealth Management in Toronto. “Growing uncertainty and volatility in world markets has sparked a move of capital.”

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Global banks hit by new corruption allegations. Why authorities are unlikely to act this time – MarketWatch

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Shares of European banks fell sharply on Monday, after the release by BuzzFeed and the International Consortium of Investigative Journalists of thousands of documents seemingly showing that some $2,000 billion worth of illicit funds were moved and laundered through the U.S. financial system over two decades.

– The papers show that five global banks — JPMorgan
JPM,
-4.29%
,
 HSBC, Standard Chartered Bank, Deutsche Bank
DBK,
-7.96%
,
and Bank of New York Mellon — kept doing business with “oligarchs, criminals and terrorists” even after being fined by U.S. authorities for earlier failures to clamp down on dirty money. The banks themselves said they could not comment on specific transactions due to bank secrecy laws. Their statements can be found here.

– The reports are based on leaked suspicious activity reports (SARs) filed by banks and other financial firms with the U.S. Department of Treasury.

– Shares in British-Asian giant lender HSBC
HSBA,
-4.98%

 and the U.K.’s Standard Chartered
STAN,
-5.09%

 fell 6% and 5%, respectively, marking 20-year lows in London mid trading. HSBC said in a statement that “all of the information provided (…) is historical.”

The outlook: The report, based mostly on past behavior already fined and sanctioned by U.S. authorities, is unlikely to trigger new punishments by governments or regulators. Especially not in a moment in the deepest of the coronavirus recession, when authorities are trying to convince and subsidize banks so they can keep lending to businesses and households. And even if legal grounds did exist in a few cases for authorities to act, regulators everywhere are likely to decide that punishment by markets is enough for now.

Read: U.K. edges closer to second national lockdown to help contain second coronavirus wave

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HSBC shares plunge to 25-year low on banks report, China fears – Aljazeera.com

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HSBC Holdings Plc slumped below its financial crisis low set more than a decade ago as pressures mount on several fronts including a potential threat to its expansion plans in China.

The London-based bank’s Hong Kong shares on Monday slid below their closing low for March 2009, hitting as low as HK$29.60, as they extended this year’s plunge to about 50%. Echoing a decline in London on Friday, its Hong Kong shares are trading at the lowest since 1995.

Europe’s largest bank is a possible candidate for China’s “unreliable entity list” that aims to punish firms, organizations or individuals that damage national security, the Communist Party’s Global Times newspaper reported Saturday. A day later, HSBC was among global banks named in a report by the International Consortium of Investigative Journalists on lenders that “kept profiting from powerful and dangerous players” in the past two decades even after the U.S. imposed penalties on the institutions.

“If the company is listed as a unreliable company by China, which looks certain since it’s a Global Times article, the bank will be facing lots of difficulties to do business in China,” Banny Lam, head of research at CEB International Investment Corp., said by phone Monday. “They may have trouble expanding the mainland business, after investing so much there over the past few years.”

The bank has rankled China over its participation in the American investigation of Huawei Technologies Co. Penalties include restrictions on trade, investments and visas on companies, countries, groups or persons that appear on the list.

HSBC declined to comment on the Global Times article. In a statement Monday in response to the ICIJ report it said that “starting in 2012, HSBC embarked on a multi-year journey to overhaul its ability to combat financial crime across more than 60 jurisdictions. HSBC is a much safer institution than it was in 2012.”

[Bloomberg]

Standard Chartered Plc, which was also mentioned in the ICIJ report, declined as much as 3.8% in Hong Kong. “We take our responsibility to fight financial crime extremely seriously and have invested substantially in our compliance programs,” the bank said Monday in a statement.

HSBC now risks being caught in deepening turmoil after a swirl of trouble over the past year amid political unrest and an economic slump in its biggest market, Hong Kong. It also faces difficulties in navigating low interest rates and surging loan losses sparked by the global pandemic.

HSBC Chief Executive Officer Noel Quinn, who took over as the bank’s permanent head in March, last month issued a stark warning about tough times ahead while reporting that first-half profit halved and predicting loan losses could swell to $13 billion this year. Quinn said the bank would attempt to hasten a shakeup of its global operations, accelerating a further pivot into Asia as its European operations lose money.

Struggling to boost returns, the lender has come under fire both in the West and in China as it attempts to steer through political tension. HSBC was lambasted in the U.S. and the U.K. over its support for China’s new security legislation on Hong Kong.

A jump in income from its markets business has failed to make up for broader shortcomings, unlike at some Wall Street and European competitors. HSBC stock has fallen more steeply than most big rivals this year, with Citigroup Inc. and JPMorgan Chase & Co. posting declines of 44% and 29%, respectively.

To make matters worse, HSBC sparked anger in Hong Kong earlier this year, alienating some of its most loyal investors, after scrapping its dividend in response to the pandemic. The bank is the worst performer on the benchmark Hang Seng index so far this year.

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