Wealthy clients are increasingly being told by financial advisers to buy gold, betting the Fed's binge of bond buying and an overbought stock market will soon push the precious metal's price up — potentially to its highest ever.
What's happening: A new report from Reuters surveying nine private banks that collectively handle around $6 trillion in assets for the world’s ultra-rich, found they had advised clients to increase their allocation to gold.
To understand why Robinhood is so popular, it's best to think in terms of game design.
Why it matters: While other brokerages sell ultra-sophisticated investing tools or boring things like retirement planning, Robinhood makes an addictive mobile-native game.
These are the hottest stocks on Robinhood, the easy-to-use app that is drawing young users who otherwise would be betting on sports during the shutdown.
The big picture: While stocks favored by institutional investors like Apple, Microsoft and Amazon occupy slots in the top 20, the list is heavily filled by speculative bets like cruise operators and airlines whose share prices are down significantly from their levels at the beginning of the year.
"They walked all the way up to the edge — and stopped." That's the verdict of Thomas Gorman, a partner at the law firm Dorsey Whitney and an expert on SEC enforcement, regarding Hertz's attempted sale of $500 million in new equity.
Driving the news: Hertz issued its prospectus on Monday, and then followed up on Wednesday with an update essentially saying "eh, never mind" after SEC chairman Jay Clayton made some pointed comments about the offering on CNBC.
SoftBank Group confirmed it will sell most of its $30 billion stake in T-Mobile US (Nasdaq: TMUS), which it acquired via T-Mobile's recent purchase of Sprint. Word is the moves could begin as early as next week.
Why it matters: This is part of SoftBank's mad dash for cash — partially driven by write-downs from its $100 billion Vision Fund — and could fund around half of its planned $40 billion in divestitures.
Stocks have clawed back a fraction of its Thursday losses, the worst day for the market since mid-March.
By the numbers: The S&P 500, Dow Jones Industrial Average and Nasdaq Composite opened more than 2% higher on Friday morning.
The Dow fell 1,861 points Thursday, the fourth worst one-day point drop on record, and the S&P 500 and the Nasdaq sank 5.9% and 5.3%, respectively. It was the worst one-day decline for the major averages since March 16.
Why it happened: Various media reports have pointed to an increase in COVID-19 cases and deaths (which had been happening for at least a week) and the Fed's dour economic outlook at its June policy meeting (which was little changed from its dour economic outlook in April).
The S&P 500 closed 5.9% lower on Thursday — the worst decline for the index since March — while the Dow Jones Industrial Average fell 6.9% (over 1,800 points), and the Nasdaq dropped 5.3%.
Why it matters: It's a pause in an epic Wall Street rally that has seen stocks recover about 40% since the worst of the coronavirus sell-off in March — despite the economy's slide into possibly one of the deepest recessions of all time.
If stock trading is the new sports betting, then the best kind of stock to gamble with is a stock that's guaranteed to end up being wiped out entirely.
The big picture: Bankrupt companies like Hertz, Whiting Petroleum and JC Penney are great gambling vehicles for low-information bettors. Much like bitcoin, they have no intrinsic value; their share price is therefore simply a reflection of short-term flows and manias.
Tesla's stock rose to more than $1,000 a share for the very first time Wednesday, lifting its valuation above $190 billion.
Why it matters: Given its pace of growth this year, Tesla is now closing in on car industry leader Toyota's $216 billion, according to the WSJ.