negative Archives - Zxcoachoutlet

Bank of England’s Haskel keeps door open to negative rates, sees risks to growth

October 5, 2020

By David Milliken and Andy Bruce

LONDON, Oct 5 (Reuters) – Bank of England rate-setter Jonathan Haskel said on Monday he saw downside risks to the economy, and also some possible benefits from cutting interest rates below zero, though it was too soon to reach a firm conclusion on this.

The BoE, which cut interest rates to a record-low 0.1% in March, is now looking at whether it is technically feasible to cut its main interest rate below zero, something that has already been done in Japan and the euro zone.

The Bank of England’s chief economist, Andy Haldane, and one of its deputy governors, Dave Ramsden, have expressed doubts about whether this would be helpful, but one external policymaker, Silvana Tenreyro, has been more supportive.

Haskel, like Tenreyro, said evidence from the European Central Bank suggested that cutting interest rates below zero could boost lending, and that banks

CURO Financial: Long-Term Regulatory Pressure Is A Negative (NYSE:CURO)

October 5, 2020

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Investment Thesis

CURO Financial Technologies (CURO) is a financial services company focused on providing financing to subprime borrowers both in-store and online, with operations centered in the United States and Canada. As a result of COVID-19 and the subsequent economic disruptions, the stock has fallen quite a bit from its February highs.

However, loan losses haven’t moved much, as government stimulus helped insulate this consumer base from losses. It is still uncertain if a second round of stimulus is forthcoming. However, given recent guidance from the US government, it seems more likely than not that we will get a second round of stimulus. This will further reduce the credit risk in the portfolio even if the downturn continues.

To be upfront, this is not a historically popular name, with high short interest driven largely by increasing regulatory pressures capping interest rates in states such as California (AB

SPXU Drift Regime Is Negative Again (NYSEARCA:SPXU)

October 2, 2020

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The ProShares UltraPro Short S&P 500 ETF (SPXU) is one of the most popular instruments to short the broad market for trading or hedging purposes. However, its daily -3X leverage factor is a source of drift. It must be closely monitored to detect changes in the drift regime. This article explains what “drift” means, quantifies it in more than 20 leveraged ETFs, shows historical data on SPXU, and, finally, concludes about the current market conditions. The analysis is also valid for Direxion Daily S&P 500 Bear 3X Shares (SPXS), which tracks the same index with the same factor and has almost identical behavior.

Why do leveraged ETFs drift?

Leveraged ETFs often underperform their underlying index leveraged by the same factor. The decay has essentially four reasons: beta-slippage, roll yield, tracking errors, management costs. Beta-slippage is the main reason in equity leveraged ETFs. However, when an asset is in a

Micron Technology Placed on Citi Negative Catalyst Watch

September 28, 2020

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A Citi analyst on Monday opened a negative catalyst watch on shares of Micron Technology (MU) – Get Report, a day before the semiconductor company is scheduled to report fourth-quarter earnings.

Shares of the Boise, Idaho, company at last check were up 0.4% at $49.31.

Analyst Christopher Danely, who has a sell rating on the shares with a $35 price target, said he expected Micron to report sales below guidance of $6 billion but in line with his $5.5 billion estimate due to what he called a double dip in DRAM.

The analyst also expects the stock to trade lower on the report and would be more constructive on the stock in the mid $30s, according to The Fly.

Last week, TheStreet.com Founder Jim Cramer said on CNBC that “Micron’s core DRAM business could be saved by their disk drive business, but I don’t see the stock

Bank of England rate setter backs negative interest rates

September 28, 2020

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a tall building: Photograph: Peter Summers/Getty Images

© Provided by The Guardian
Photograph: Peter Summers/Getty Images

A mortgage that allows home buyers to pay back less than they borrowed came a step closer after Bank of England rate setter Silvana Tenreyro backed the early adoption of negative interest rates to boost the struggling economy.

Tenreyro, a member of Threadneedle Street’s nine-strong monetary policy committee, said there were “encouraging” signs that previous barriers to cutting interest rates to below zero no longer applied.

Denmark’s banks already offer home loans with a minus figure, and the UK could follow suit if the Bank of England cuts its base rate from 0.1% to less than zero.

A negative-rate mortgage means the interest bill is credited to the borrower’s account rather than debited, reducing the sum borrowed over time. This is in contrast to loans offered by banks and building societies 25 years ago, when the interest rate ranged between 5%

BOE policymaker says banks can cope with more pressure from negative rates

September 27, 2020

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Last week, BOE launched official talks with the Prudential Regulation Authority over the operational practicalities negative interest rates, hitting the pound. Photo: Getty

A Bank of England (BOE) policymaker has said that an investigation into whether negative rates might help the UK economy through its current downturn found “encouraging” evidence from other countries.

Silvana Tenreyro, defended the potential use of negative interest rates, which could take the cost of borrowing below zero, in an interview with the Sunday Telegraph.

“There has been almost full pass-through of negative rates into lending rates in most countries,” she said.

Tenreyo, who is an external member of the Bank’s Monetary Policy Committee, said that banks would be able to handle further pressure on their finances.

“Banks adapted well – their profitability increased with negative rates, largely because impairments and loss provisions decreased with the boost to activity and the increase in asset prices.”

The

Bank of England policymaker defends negative rates

September 27, 2020

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A Bank of England (BoE) policymaker has defended the potential use of negative interest rates, which could take the cost of borrowing below zero.

Silvana Tenreyro told the Sunday Telegraph that evidence from other countries was “encouraging”.

On Tuesday, the BoE governor played down the prospect of taking rates below zero, insisting it just needed to make sure it could do so if needed.

The Bank has so far responded to the pandemic by cutting rates to just 0.1%.

If interest rates are negative, the BoE charges for any deposits it holds on behalf of the banks. That encourages banks to lend the money to business rather than deposit it.

In an interview with the newspaper, Ms Tenreyro – an external member of the Bank’s Monetary Policy Committee – said that evidence from other European countries and Japan suggested that negative interest rates had succeeded in cutting

BoE’s Tenreyro says evidence on negative rates is ‘encouraging’

September 26, 2020

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LONDON (Reuters) – The Bank of England’s investigation into whether negative rates might help the British economy through its current downturn has found “encouraging” evidence, policymaker Silvana Tenreyro said in an interview published late on Saturday.

FILE PHOTO: A worker wearing a protective face mask walks past the Bank of England in the City of London, Britain, August 6, 2020. REUTERS/Toby Melville/File Photo

Tenreyro told the Sunday Telegraph that she did not expect Britain to continue to enjoy a fast V-shaped recovery, due to headwinds from local flare-ups in COVID-19, rising unemployment and a “very weak” global economic outlook.

Britain’s central bank said in August that it was taking a closer look at the case for cutting interest rates below zero, and in September it said it would take a detailed look at the idea’s technical feasibility during the fourth quarter.

However Governor Andrew Bailey said this did not mean

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