Tag Archives: stock markets

Travel and leisure topped list of evolving corporate credit ratings during pandemic | Instant News


The COVID-19 pandemic has been disrupting not only lives and businesses around the world for over a year, but also the credit ratings of major corporations. Corporate credit ratings are a key measure of creditworthiness, but can also determine borrowing costs. They range from AAA to blue chip companies like Johnson & Johnson JNJ, -0.39% and Microsoft Corp. MSFT, + 1.34% to D for defaulting companies. Increasingly, credit ratings may also point to a potential path of recovery for industries hard hit by the protracted public health crisis. Take, for example, travel and recreation, an industry that has seen half of all blue chip companies in the world transition to high yielding, or “junk” status during the pandemic, according to a new report from Credit Benchmark . Even as parts of Europe remain stranded to contain the coronavirus, travel and leisure has seen the highest share of ‘fallen angels’ (at 11.1%) revert to investment grade status during the crisis (see graph below). Fallen Angels, Rising Stars Credit Benchmark The report identified 1,051 fallen angels out of 6,895 companies sampled around the world, or about 15% of the total. He found that about 5% went back to the investment grade. The retail, oil and gas, and auto and parts sectors have also been volatile on the credit ratings front over the past year, according to the report, with migrations between the two main tranches being now a key objective for investors. Read: The next rising stars in the debt world? Probably the Fallen Angels of Businesses Upgrades and downgrades can make a big difference to a business in terms of borrowing costs. The average yield on bonds issued by investment grade US companies is now in the 2.21% range, while it is almost double for those in speculative grade territory at around 4.21%. These rates are important, especially in the past year, as cruise lines including Carnival Corp CCL, -1.52%, Royal Caribbean Group RCL, -1.37% and Norwegian Cruise Line Holdings Ltd NCLH , -2.20%, borrowed billions because their ships were largely idle. See: White House pushes back cruise industry efforts to restart in July, as Florida sues Biden administration But with other ‘clawback’ deals, Carnival shares rose 31.9 % year-to-date Thursday, while those of Royal Caribbean and Norwegian were up about 20%, according to FactSet data. This compares to the Dow Jones Industrial Average’s DJIA, + 0.17%, up 9.5% for the same period, while the S&P 500 SPX Index, + 0.42% was up 9.1%. .



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Recovery in leisure travel in full swing, helping airlines | Instant News


A recovery in leisure travel is “in full swing” and airline bookings are on the rise, Bank of America analysts said in a note Monday, raising their expectations for the stock prices of a few US airlines. A “reopening of trade” that began in November alongside the vaccine news helped raise the market capitalization of US airlines by 7% above pre-pandemic levels, compared to 10% below for the United States. Most of the travel industry, including European airlines and US hotels and cruise lines, analysts told me. “With a strong rally reflected in stocks, the ability to meet or beat estimates will be important and will support the theme of ‘getting back to fundamentals’,” they said. They raised the price targets on “a robust reservation dynamic” and “prefer airlines exposed to leisure with good balance sheets”: Southwest Airlines Co. LUV, -1.12%, Alaska Air Group Inc. ALK, – 1.71%, and JetBlue Airways Corp. JBLU, -0.69%. Delta Air Lines Inc. DAL, -1.03% also achieved a target price increase. Shares of major airlines fell alongside the broader stock market on Monday, but saw a rise in March, with American Airlines Group Inc. AAL, -1.00% leading the pack with a 7% gain to now this month, followed by United Airlines Holdings Inc. UAL, -1.83% with a 5% lead. The US Global Jets ETF JETS, -1.39% gained 0.7% in March and is up 17% over the last 12 months, against 55% for the S&P 500 SPX index, -0.13% in the past 12 months. B. of A analysts raised their price targets on Southwest shares to $ 68 from $ 60; on Delta at $ 49 from $ 46; on Alaska at $ 78 from $ 72; and on JetBlue at $ 22 from $ 19.50. Small airline Allegiant Travel Co. ALGT, -4.74% and Spirit Airlines Inc. SAVE, -2.22% also got target price hikes, with the price target on Allegiant rising from $ 245 at $ 260 and the Spirit price target at $ 37 of $ 36. Raymond James analysts also noted the “encouraging” trends in US airline bookings, saying they have been “the strongest” so far in the pandemic. Travel restrictions imposed during the pandemic have devastated airlines, dampening demand for air travel and major airlines around the world to reduce capacity, lay off employees, cut costs and survive on government bailouts. “We expect investors to… (focus) on the overall recovery in income and cash flow, with earnings season feedback likely to be encouraging as the peak summer season approaches,” the reporters said. Raymond James analysts. “Potential risks include the possible moderation of bookings recovery between the spring / Easter and summer break periods and the more resilient COVID variants taking hold.” For business travel, a “significant” recovery in demand is only expected in the second half of the year, they said. The short-term momentum is “the strongest” for JetBlue and Spirit, they said. .



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Australia stocks rise as inflation fears subside and travel stocks rise | Instant News



* Travel securities surge following announcement of support program * Gold stocks hit 10-day high March 11 (Reuters) – Australian stocks followed global markets higher on Thursday, so inflation fears eased after a report on US consumer prices, while domestic travel stocks surged on expectations US Congress approval of a relief package Also aiding sentiment was $ 1.9 trillion COVID-19, with the S & P / ASX 200 Index gaining 0.2% to 6,731.1 at 11:04 p.m. GMT. Travel-related stocks have surged as Prime Minister Scott Morrison is set to announce an A $ 1.20 billion ($ 927.8 million) program that includes subsidized domestic flights, financial support for his two major airlines and cheap loans to small tour operators. Flight Center Travel Group jumped 10.9%, Webjet rose 6% and Qantas rose 3.2%. Elsewhere, the US Department of Labor said its Consumer Price Index (CPI) rose 0.4% in February, in line with expectations, while the core CPI edged up 0.1%, helping the Dow Jones Industrial Average to hit a record high. The S&P 500 rose 0.60% overnight, while the Nasdaq finished at about the same level. Returning, Australian financial stocks rose 0.4%, led by Janus Henderson Group, up 2.4%, while Insurance Australia Group rose 1.3%. 0.5% after bullion prices peaked in one week. The best performers were Chalice Mining and De Gray Mining, up 3.7% and 3.4% respectively, while energy stocks rose 0.2%, with Beach Energy and Ampol rising 1.8% respectively. and 1.2%. Economic recovery and falling gasoline inventories in the U.S. Mining stocks fell 0.4%, however, weighed down by BHP Group and Capricorn Metals. In New Zealand, the benchmark S&P / NZX 50 increased 0.5% to 12,315.46. were Air New Zealand and Arvida Group, which grew 2.4% each. ($ 1 = A $ 1.2933) (Reporting by Aditya Munjuluru; editing by Uttaresh.V).



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Vaccines spice up travel stocks | Instant News


Illustration by Elias Stein Text size For much of the past year, travel-related companies have been posters for the companies that have been most disrupted by Covid-19. Although bets on an economic recovery rose, stocks remained severely depressed. Recently, they have shown a bit of pizzazz. The US Global Jets exchange-traded fund is up 17% this year, compared to 3% for the S&P 500 index. The latest bump came as vaccines were more widely distributed and airlines moved. started to see an improvement, albeit modest, in operational parameters. Investors seem increasingly optimistic that travel will recover significantly as the pace of vaccinations picks up. Airlines are lining up more money from Washington, with $ 14 billion in aid likely as part of the $ 1.9 trillion stimulus bill. Domestic traffic, revenues and bookings are all increasing, says UBS analyst Myles Walton, who sees the situation improving further. Investors are also betting that domestic flights will rebound before international routes and that leisure travel will recover before business. The biggest winners of the year were US-focused carriers such as Spirit Airlines and JetBlue Airways, up 48% and 29%, respectively. Norwegian Cruise Line Holdings, Carnival and Royal Caribbean Group also grew at least 23% in 2021. Carnival has raised capital twice this year, selling $ 1 billion in stocks and $ 3.5 billion in non-debt. guarantees to consolidate its liquidity. Unsecured debt means lenders haven’t demanded collateral, betting Carnival will be able to repay its loans out of profits. Equity investors want to own part of the business and don’t see it going into insolvency. Inflation Fix Last Week The S&P 500 had its biggest day since June Monday, with all 11 sectors up, led by the 3.2% rise in tech. But questions about bond yields, inflation and the Federal Reserve persisted. Volatility rose, as tech stocks slipped, then indexes plunged after the Fed’s Jerome Powell stuck to his easy money policy, then rallied despite big jobs numbers that did raise bond yields. Over the week, the Dow industry rose 1.8% to 31,496.30; the S&P 500 edged up 0.8% to 3,841.94; and the Nasdaq Composite fell 2.1%, to 12,920.15.A Vaccine Deal The Food and Drug Administration has approved the Johnson & Johnson Covid-19 vaccine, while the White House negotiated a deal with Merck for the ‘help produce it. President Biden announced that there will be enough vaccine to immunize all American adults by the end of May. He also prioritized teachers and school staff for vaccinations by the end of March. Texas and Mississippi abandoned mask mandates and opened businesses; Biden called the movements “Neanderthal”. The relief bill, meanwhile, has been sent to the Senate and discussions continue on the minimum wage. Climate change The American Petroleum Institute has approved a price for carbon emissions. Exxon Mobil has added two new board members, activist investor Jeffrey Ubben and former Comcast CFO Michael Angelakis, leaving out activist Engine No.1, who had sought four seats. And Texas’ largest cooperative electricity supplier, Brazos Electric Power, has filed for bankruptcy after being hit by $ 2.1 billion in bills following the recent freeze. the “gamification” of stock trading – a response to the GameStop episode – and the increasing concentration of retail execution. Almost all of Biden’s nominees have been approved. The exception: Neera Tanden, whose leadership appointment in the Office of Management and Budget was withdrawn by the White House after failing to get the votes. Buffett on Berkshire Hathaway’s Warren Buffett buyouts in his annual letter was down on fixed income and up on share buybacks, praising one of the company’s “four gems”, Apple, for its buyback program. Berkshire has stepped up its own buyouts. Annals of Deal-Making It’s been a great week for Apollo Global Management. The private equity giant pocketed Las Vegas Sands for $ 6.3 billion as the casino company left Vegas; said he was taking private Michaels craft chain for $ 3.3 billion, the chain’s second buyout; and talked about taking the online photo company Shutterfly public through a PSPC. And it found itself competing for the assets of bankrupt Greensill Capital, after SoftBank-backed fintech filed for insolvency in the UK and German regulators took the case to court. Write to Nicholas Jasinski at [email protected] and to Daren Fonda at [email protected]



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As business travel declines, Airbnb sees opportunity in remote work travel | Instant News



While business travel has been one of the victims of the coronavirus pandemic, Airbnb plans to capitalize on the new work-life balance that has emerged during the shift to remote working. Airbnb CEO Brian Chesky told CNBC’s Jim Cramer on Thursday that the home rental company is seeing signs that consumers are taking advantage of the anywhere work model that businesses are embracing to get out of their homes and get a change of scenery. “The lines between travel and living are starting to blur,” he said in an interview with “Mad Money”. . As opposed to just renting Airbnb sites for vacations, more and more people are using rental for living purposes, said Chesky, who bought out the company he founded last year. The IPO, originally slated for early 2020, was postponed later in the year due to uncertainty surrounding the global pandemic. The travel industry has been one of the hardest hit parts of the economy due to lockdowns that have been put in place around the world to contain Covid-19. Remote workers now have even more flexibility, choosing to take more three-day weekends or move into homes for longer periods of time than before, as long as the internet is available to connect to Zoom for business purposes, Chesky said. “We think a lot of the trips will be in small towns because people are going to get in the car and travel nearby,” he said. “We are really adaptable and resilient to any type of travel behavior. This is what we learned last year,” he added. The comments come after Airbnb published its first quarterly report. as a state-owned company Airbnb said it had fourth-quarter revenue of $ 859 million, compared to FactSet’s estimate of $ 747 million, and a net loss of $ 3.89 billion. Much of the loss was blamed on fees billed to it at the end of last year. To date, the stock is up 24%.



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