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Strong gains for technology stocks send Wall Street higher – 680 News

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Stocks marched higher again on Monday, as Wall Street extended its gains from last week’s rally, the market’s best in three months.

The S&P 500 rose 1.6%, following up on strengthening in stock markets around the world. Big Tech stocks, including Apple and Microsoft, powered much of the gains. Their businesses have proven to be practically impervious to the pandemic, unlike companies that would benefit from a strengthening economy.

The market’s latest upward push came as Wall Street appeared to largely shrug off the latest signs that Democrats and Republicans are no closer to reaching a deal on more aid for the economy, which remains hobbled by the pandemic. Over the weekend, Democratic House Speaker Nancy Pelosi criticized the latest offer from the Trump administration on a stimulus package as “one step forward, two steps back,” while the president’s fellow Republicans called it too expensive.

Investors may be betting that Congress will deliver a more generous aid bill after the election, should Democrats regain the majority in Congress, as some polls suggest.

“The market is expressing some comfort with Democrats taking the White House and the Senate, if it means that there will be more stimulus,” said Willie Delwiche, investment strategist at Baird. “But the reality is it’s several months away before anything could get passed. It does raise a question in my mind whether or not some of this is too much, too soon in terms of the market anticipating stimulus at this point.”

The S&P 500 rose 57.09 points to 3,534.22. The benchmark index is on a four-day winning streak and is now within 1.4% of its all-time high set Sept. 2. The Dow Jones Industrial Average climbed 250.62 points, or 0.9%, to 28,837.52. The Nasdaq composite, which is heavily weighted with technology stocks, gained 296.32 points, or 2.6%, to 11,876.26.

Apple climbed 6.4% and alone accounted for a quarter of the S&P 500’s rise. The iPhone maker also was the index’s biggest gainer. Amazon rose 4.8%. Both companies have events coming up this week, with Apple expected to unveil its latest batch of iPhones on Tuesday and Amazon holding its Prime Day on Tuesday and Wednesday.

Microsoft also closed higher, rising 2.6%, Facebook added 4.3% and Google’s parent company gained 3.6%.

The Russell 2000 index of small-cap stocks, which tends to move more with expectations for the economy’s strength than Big Tech companies, notched more modest gains than the rest of the market. The index picked up 11.51 points, or 0.7%, to 1,649.05.

Mondays gains add to last week’s 3.8% rally for the S&P 500, which came amid a dizzying 360-degree spin on expectations for Congress and the White House to be able to deliver more aid for the economy.

President Donald Trump said early in the week he’d put a halt to negotiations on stimulus, even though economists and the chair of the Federal Reserve say the economic recovery likely needs it. He then backed a set of more limited programs before admonishing negotiators at the end of the week to “Go Big!” His administration unveiled its latest, increased proposal to House Democrats, valued at about $1.8 trillion, but it was rejected by Democrats over the weekend.

Investors have been agitating for more stimulus since the expiration of extra unemployment benefits for laid-off workers and other support for the economy approved by Congress earlier this year. Even if Washington can’t deliver the aid soon, some investors have been building up their expectations that it may arrive in 2021.

Rising poll numbers for Democrats are raising the odds for a sweep of the White House, Senate and House of Representatives. If that were to happen, investors say it would also increase the likelihood for a big stimulus package after the election. That could offset the drag on corporate profits that investors expect a Democratic-controlled Washington would create through higher taxes and tighter regulations.

This week also marks the start of earnings reporting season for big U.S. companies, where CEOs will tell investors how they fared from July through September. Analysts are forecasting another quarter of weaker profits, with S&P 500 earnings expected to be down 20.5% from a year earlier, according to FactSet.

But that’s not as bad as analysts were forecasting a few months ago, and it’s not as bad as the 31.6% drop that S&P 500 companies reported for the spring quarter. As widespread lockdowns eased across the country, companies have been able to feel a bit of increasing momentum.

This week will feature earnings reports from many of the nation’s biggest banks, and how they fare “could give a clearer picture into just how far we’ve come in terms of economic recovery,” said Chris Larkin, managing director at E-Trade Financial.

In European markets, indexes rose in France and Germany but slipped in Britain. Asian markets closed broadly higher, except in Japan, where they fell slightly.

U.S. bond trading was closed for a holiday.

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Ant Group set to surpass Aramco as biggest-ever IPO – Aljazeera.com

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Jack Ma’s fintech giant Ant Group is set to raise $34.5bn through initial public offerings in Shanghai and Hong Kong – a listing that will rank as the largest ever.

Jack Ma’s Ant Group Co is set to raise about $34.5 billion through initial public offerings in Shanghai and Hong Kong, a blockbuster listing that will rank as the biggest IPO ever and make it one of the most valuable finance firms on the planet.

The fintech giant will have a market value of $315 billion even before exercising its greenshoe option, based on filings Monday. That’s about the same valuation as JPMorgan Chase & Co. and four times larger than Goldman Sachs Group Inc.

The IPO is attracting interest from some of the world’s biggest money managers, and sparking a frenzy among individual investors in China clamoring for a piece of the sale. In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, or over 284 times of the initial offline offering tranche, according to Ant’s Shanghai offering announcement.

“This was the first time such a big listing, the largest in human history, was priced outside New York City,” billionaire founder Ma told the Bund Summit in Shanghai Saturday. “We wouldn’t have dared to think about it five years, or even three years ago.”

Such demand puts the much-anticipated IPO on track to surpass Saudi Aramco’s $29 billion sale last year. Ant priced its Shanghai stock at 68.8 yuan ($10.27) apiece and its Hong Kong shares at HK$80 ($10.32) each. The company may raise another $5.17 billion if it exercises its greenshoe options.


This is “a homecoming for capital markets in Shanghai and Hong Kong,” said existing investor John Ho, founder of Janchor Partners. Ho, who invested $400 million in Ant two years ago, added that he’s trying to secure a bigger allocation of the Hong Kong shares and that being able to invest in Ant “is priceless.”

T. Rowe Price Group Inc., UBS Asset Management and FMR LLC, the parent of Fidelity Investments, are among the money managers angling for a piece of the deal, a person familiar with the matter has said. Hong Kong stockbrokers are so confident Ant IPO will go smoothly that they’re offering to let mom-and-pop investors buy the stock with as much as 20 times leverage.

“The investment thesis of Ant is a systemic valuation transfer from mainstream Chinese financial institutions such as banks to a platform that’s data-driven, with a huge network effect, and enjoying almost zero marginal costs of cross-selling,” said Nick Xiao, CEO of Hywin International, the Hong Kong arm of Hywin Wealth which is helping rich individuals buy shares of Ant. “Every bank and securities house and fund manager will have to plug into it, while every consumer, corporate or individual, cannot live without it.”

The fintech giant that runs the Alipay platform is charging ahead with its landmark offering just days ahead of the U.S. election. The Hong Kong listing day will be on Nov. 5., only two days after the U.S. vote, an event that could spark market volatility if the vote is disputed or counting delayed.

Ant has picked China International Capital Corp. and CSC Financial Co. to lead its Shanghai leg of the IPO. CICC, Citigroup Inc., JPMorgan. and Morgan Stanley are heading the Hong Kong offering. Existing Ant shareholders won’t be able to sell shares for six months, according to the filings.


The company will issue no more than 1.67 billion shares in China, equivalent to 5.5% of the total outstanding before the greenshoe, according to its prospectus on the Shanghai stock exchange. It will issue the same amount for the Hong Kong offering, or about 3.3 billion shares in total.

Alibaba Group Holding Ltd., which was co-founded by Ma and currently owns about a third of Ant, has agreed to subscribe for 730 million of the Shanghai shares, which will be listed in Shanghai under the ticker “688688,” according to the prospectus. Alibaba will hold about 32% of Ant shares after the IPO.

(Updates with quotes and details throughout.)
© 2020 Bloomberg L.P.

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Stock markets sell off on renewed uncertainty over COVID-19 and U.S. election – CBC.ca

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Stock markets around the world sold off on Monday as surging coronavirus infections prompted a new wave of fear and uncertainty, barely a week before a U.S. election that could reshape global geopolitics.

The Dow Jones Industrial Average finished the day at 27,685, down 689 points or 2.3 per cent. At the lowest point, the benchmark group of 30 large U.S. companies was off by more than 900 points.

The broader S&P 500 and technology-focused Nasdaq fared slightly better, but both closed down by almost two per cent.

The reason for the selling was a new wave of fear washing over markets as COVID-19 infections are rising to record levels in many places.

Spain’s government declared a national state of emergency on Sunday that includes an overnight curfew, while Italy ordered restaurants and bars to close each day by 6 p.m. and shut down gyms, pools and movie theatres.

Numerous Latin American nations also set their own daily case records over the weekend.

After two record days of more than 80,000 new cases over the weekend, the seven-day average of new cases in the U.S. is now at 68,767, according to data compiled by Johns Hopkins University. 

“And nobody is quite sure about what the response is going to be,” said Colin Ciezinsky, chief market strategist with SIA Wealth Management. “Are we going to see widespread lockdowns or more targeted rollbacks? Markets are like a deer caught in headlights.”

TSX down, too

Canadian stocks got swept up in the gloom, although on the whole they held up comparatively better.

The TSX’s main index lost 257 points, down 1.6 per cent on the day. 

Travel-related companies were hit hardest, with shares in Air Canada losing more than $1 to close at $15.91. Those same shares were valued at more than $50 apiece in January, but that was before COVID-19 wiped out demand for air travel.

Energy companies were battered too, as the price of oil lost more than three per cent with a barrel of the North American benchmark known as WTI closing at $38.52 US.

Oil’s sell off was mainly due to COVID-19, said Judith Dwarkin, chief economist at Enverus. “COVID’s second wave or third wave has enveloped Europe and prompted a new raft of travel restrictions,” she said. “It’s not surprising there’s heightened volatility in the market.”

Surging coronavirus infections have prompted a new wave of uncertainty on stock markets. (Lucas Jackson/Reuters)

Shares in three of the biggest oil companies in Canada — Cenovus, CNR Limited, and Suncor — all fell. Cenovus plunged by eight per cent to $4.47 despite news the company was planning to take over smaller rival Husky in a $23 billion deal.

U.S. election impact

Renewed coronavirus fears were the main thing roiling markets, but the U.S. election was also a contributing factor, Ciezinsky said.

“People are starting to take money off the table,” he said. “They aren’t sure what the result might be or if it is disputed [so] this is about fear and uncertainty. People don’t know what’s going to happen.”

Hopes are also fading that Democrats and Republicans will come together on another stimulus package, but Esty Dwek, head of global market strategy at Natixis Investment Managers, said some sort of deal is likely once the uncertainty of the election can be settled.

“It’s going to be a little bit volatile in the next week depending on the results, but we’re not expecting weeks of uncertainty,” she said.

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Bombardier will get $275M for sale of aerostructures business to Spirit, less than originally agreed to – CBC.ca

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Bombardier Inc. says it will receive less cash than it originally had agreed to in the sale of its aerostructures business to Spirit AeroSystems Holding Inc.

The company says it will receive US$275 million in cash in the amended deal, down from the US$500 million in cash that was first announced last year.

Spirit will also assume liabilities, including government refundable advances and pension obligations, valued at US$824 million.

The sale includes operations in Belfast, U.K., and Casablanca, Morocco, as well as a maintenance, repair and overhaul facility in Dallas.

Concerns about the future of the deal were raised last month after Spirit said some closing conditions were unmet, injecting a degree of uncertainty into the deal.

Bombardier said Monday the closing conditions have been met and the transaction is expected to close on Friday.

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