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US durable goods orders slump the most since 2014, weighed down by the coronavirus pandemic and canceled Boeing orders

Fri, 04/24/2020 - 12:06pm

  • New orders for durable goods in March fell 14.4% after a 1.1% revised increase in February, according to a Friday report from the Commerce Department.
  • Transportation equipment fell 41% in March, leading the report lower. That was led by a 300% drop in orders for non-defense aircrafts, likely due to decreased Boeing orders. 
  • New core capital goods orders, which exclude aircraft, rose 0.1% in March following a 0.8% decline in February.
  • Visit Business Insider's homepage for more stories.

US durable goods declined in March by the most since 2014, weighed down by falling oil prices, the coronavirus pandemic, and a decline in orders for Boeing aircraft. 

New orders for durable goods in March fell 14.4% after a 1.1% revised increase in February, according to a Friday report from the Commerce Department. The median estimate was a decline of 12% from economists surveyed by Bloomberg. 

Transportation equipment fell 41% in March, leading the report lower. Much of the drop can be attributed to a huge decline in new orders for non-defense aircraft and parts. In March, the category had negative orders of $16.3 billion, a nearly 300% drop from the previous month. This decrease is likely the result of canceled Boeing orders.

Other parts of the report exceeded economist's expectations. Orders excluding transportation dipped 0.2% in for the month, outperforming the consensus estimate of -6.5%. 

"The March numbers were better than we expected; presumably, it takes a bit of time for management decisions to cut spending to filter into the hard numbers," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a Friday note. 

New core capital goods orders, which exclude aircraft, rose 0.1% in March following a 0.8% decline in February. Shipments of core capital goods dipped 0.2% in March, after a 0.9% decline in the previous month. 

Read more: Manny Stotz is so good at allocating capital that billionaire Howard Marks was his biggest investor from the get-go. He breaks down a high-upside bet he's making on 'frontier' stocks in nations like Bangladesh and Egypt.

While Friday's report was rosier than many expected, economists foresee further pain ahead. Shepherdson thinks that April core capex could fall 20% to 30%, outpacing the worst month during the Great Recession of -11.1% in January 2009.

"We can't be too upbeat," James Knightley, chief international economist at ING, wrote in a Friday note. "We still expect to see investment fall sharply through 2Q and given the long lead times, we suspect we will also see hefty falls in 3Q irrespective of whether the economy has re-opened by then."

He continued: "With manufacturing surveys pointing to output contracting 20%, there is little need to increase productive capacity while the carnage in the oil industry given recent price plunges suggests this capex hungry sector is also going to face major cutbacks in expenditure."

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Oil spikes 9% as market rebound puts negative prices in rear view

Fri, 04/24/2020 - 11:56am

  • West Texas Intermediate crude oil tore higher for a second straight session, jumping as much as 9% to $17.95 per barrel on Friday.
  • Brent crude, oil's international benchmark, traded as much as 6.4% higher to $22.70 per barrel.
  • The rally marks a sharp reversal from lows seen earlier in the week, when Tuesday expiration for May delivery contracts drove WTI to negative prices for the first time in history.
  • While some analysts are cheering the rebound, others see the move as a "dead-cat bounce" before another downturn. 
  • Watch oil trade live here.

West Texas Intermediate crude oil surged as much as 9% on Friday as investors turned back to the thrashed commodity market.

Contracts for June delivery traded as high as $17.95 per barrel before paring some gains later in the day. The jump follows a similar move on Thursday, marking a brief rally to close a volatile week.

Brent crude, oil's international benchmark, traded as much as 6.4% higher to $22.70 per barrel.

The world's most-traded commodity is hot off historic negative prices posted at the start of the week. May contracts closed at negative $37.63 on Monday before expiring the following day, a first for oil as the coronavirus pandemic pushes demand to the floor. Traders were forced to pay others to take contracts off their hands as storage options dried up and delivery deadlines loomed.

Brent crude traded at a two-decade low amid the market turmoil.

Read more: Morgan Stanley explains why the end of wild swings in the stock market is near — and shares the perfect trade to profit from the calm ahead

Oil prices turned higher on Wednesday, bolstered by President Donald Trump's tweet warning the US will "shoot down and destroy" Iranian ships threatening American vessels. The message was "perhaps the oldest Middle East oil trick in the book," Rabobank analysts said in a note, adding such language typically lifts oil prices.

Not all experts are convinced the market rally is sustainable. Oil's end-of-week leap is merely "a dead-cat bounce" before markets turn lower once more, Naeem Aslam, chief markets analyst at Avatrade, said.

"Speaking from a fundamental perspective, nothing has changed in terms of supply and demand, and it will be a surprise if we do not see the price falling again next week," he added.

Now read more markets coverage from Markets Insider and Business Insider:

Manny Stotz is so good at allocating capital that billionaire Howard Marks was his biggest investor from the get-go. He breaks down a high-upside bet he's making on 'frontier' stocks in nations like Bangladesh and Egypt.

The Fed will keep interest rates near zero for at least 3 more years, economist survey says

'Ferocity not previously seen in recent history': US economic output plunged the most since 2009 in April as the coronavirus lockdown spread

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Zoom surges as much as 7% to all-time highs following inclusion in Nasdaq 100 Index (ZM, QQQ, WLTW)

Fri, 04/24/2020 - 11:38am

  • Shares of Zoom Video Communications surged as much as 7% in Friday's trading session to new all-time highs after it was announced that the company would be included in the Nasdaq 100 Index on April 30.
  • The company has seen its daily user base surge 2,900% since the coronavirus outbreak.
  • Shares of Zoom have risen more than 400% since pricing its IPO at $36 per share in 2019.
  • Visit Business Insider's homepage for more stories.

Shares of Zoom Video Communications surged as much as 7% to $181.50 in Friday's trading session after Nasdaq announced Thursday night that the Nasdaq 100 Index would replace Willis Towers Watson with Zoom prior to market open on April 30. 

Today's move follows yesterday's 12% surge after the company announced it had surpassed 300 million daily active users, representing a 2,900% increase from December 2019 when the company had 10 million daily active users. The company's video conferencing software has become popular among customers stuck at home during lockdowns due to the coronavirus. 

Read more: The CIO overseeing $270 billion at Guggenheim says stocks will plunge another 27% from current levels — but lays out a series of recommendations for bargain-hungry investors

Zoom stock is up more than 400% since pricing its initial public offering at $36 in April 2019.

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Singapore's richest man is getting $1 billion richer each month from selling ventilators

Thu, 04/23/2020 - 11:59pm

  • Singapore's wealthiest man Li Xiting is already $4.3 billion richer this year. He's now worth $13.5 billion, according to Bloomberg data.
  • Xiting is the co-founder of a medical devices company, and he can thank his rising fortune from booming orders for medical equipment — particularly ventilators — as nations try to deal with the coronavirus. 
  • A spokesperson told the South China Morning Post, about 100 countries had already made orders, including an order for 10,000 ventilators from Italy.
  • Visit Insider's homepage for more stories.

Singapore's wealthiest man's fortune has grown by about $1 billion a month this year from selling ventilators to nations trying to combat the coronavirus.

Li Xiting, who is the co-founder and chairman of a medical devices company called Shenzhen Mindray Bio-Medical Electronics, has had his fortune increase by $4.3 billion this year, according to the South China Morning Post, as the company's stock price "soared" by almost 50%.

He's now worth $13.5 billion, according to Bloomberg data — which is a 47% increase. It equates to his fortune increasing on average by about $37.7 million every 24 hours.

Demand for Shenzhen Mindray Bio-Medical Electronics' ventilators has boomed, as healthcare workers around the world struggle without enough to treat people. Ventilators — a medical device that helps patients breathe — are critical to treating COVID-19 patients whose lungs are assailed by the respiratory illness.

And unlike the highly competitive nature of producing masks — 38,000 mask companies have registered to make masks in China this year alone — it's a small market since building ventilators is technical and highly specialized.

A spokesperson for the company told the South China Morning Post: "Orders for our products increased sharply in March. We received orders from 100-odd countries for our medical devices to fight against the epidemic."

The spokesperson said it received an order for about 10,000 ventilators from Italy, although the exact price of a ventilator wasn't clarified.

Li isn't the only billionaire to do well out of the pandemic. Amazon founder Jeff Bezos fortune has grown substantially as Amazon sales surged, Business Insider previously reported. As of April 24, he's worth an estimated $145 billion.

SEE ALSO: China is experiencing a gold rush for surgical masks — more than 38,000 companies registered in 2020 to make or trade face masks. But mask quality and scams are now issues.

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At the very onset of the pandemic, one Silicon Valley VC firm began triaging its startups. Here's how Bullpen Capital decided which companies to help and which were beyond saving.

Thu, 04/23/2020 - 8:09pm

  • Duncan Davidson and his colleagues at Bullpen Capital recognized early on that the coronavirus outbreak could cause major business disruptions for their venture firm's startups.
  • Bullpen has gone through several rounds of analyzing the health of its startups' operations and the  way it was earmarking reserve cash to support them. In an interview with Business Insider, Davidson discussed the process the firm went through.
  • The VC firm tried to figure out which companies would be OK, which were going to need help, and which of those were worth saving.
  • Another question Davidson and his colleagues also pondered: Which companies should apply for the special small business loans the federal government set up to help firms weather the crisis? More than 30 of Bullpen's portfolio companies ended up applying.
  • Click here for more BI Prime stories.

For Duncan Davidson, the last six weeks or so have been intense.

Since the end of February, when general partner Davidson and his colleagues at Bullpen Capital first started to think that the coronavirus epidemic could have a big effect on their funds and investments, they've been working long hours trying to help their portfolio companies figure out how to weather the coronavirus crisis. They also considered how their early-stage, post-seed venture firm itself could make the best use of the remaining cash in its four funds. That process has involved multiple rounds of analysis, to examine how the firm had earmarked its cash, as well as the changing condition of its stable of about 60 startups.

They've finally nearing the end of the effort, but it hasn't been easy.

"From the beginning of March all the way to now, this is all we've been doing," Davidson told Business Insider in an interview Tuesday. He continued: "I think most every VC fund's been working their asses off the last six weeks on a similar type of process."

Bullpen started the effort with an analysis of its reserves. Venture firms typically set aside a large portion of money in their funds for follow-on investments in their portfolio companies. Those reserve funds can be used to increase or maintain the firm's stake in companies when they raise new rounds of capital — offensive reserves, as Davidson put it. Or they can be used to help prop up companies that are going through rough times — what Davidson calls a defensive use of reserve cash.

Bullpen went through a process of triage with its startups

Even in ordinary times, venture firms routinely reassess how they plan to allocate their reserves. But when Davidson and his colleagues started to think that the epidemic could lead to a widespread economic crisis, the task of reevaluating their reserves took on a new urgency. They wanted to make sure they were clear in their minds how much cash they still had on hand and what they were conserving it for.

Bullpen quickly moved from its analysis of its reserves to a kind of triage process with its portfolio companies, assessing which ones were fine, which ones were going to need help, and which ones were beyond saving. As part of that evaluation, Davidson and his team looked hard at the companies that were going to need help, to calculate how much of the firm's reserves they'd have to dedicate to their survival. The team wanted to help their portfolio companies get through the crisis, but not at the price of sacrificing opportunities to grab bigger stakes in their winners, he said.

"You don't want to use up your money on that," Davidson said. "You get in trouble if you keep on doing that."

After going through the triage analysis, Bullpen asked its startups to put together what it calls a default-alive plan. That's essentially a strategy to get the company to a point where it has enough cash to last 18 months, or until it gets to break-even, whichever comes first. Unfortunately, many of Bullpen's companies didn't take the endeavor very seriously, Davidson said. Given the Bullpen team's fears about the looming impact of the pandemic on the global economy, they found the startups' plans far too optimistic.

So, Bullpen stress-tested the startup's plans. They urged the companies to assume that the second quarter would be really bad; that, say, they might see a 50% drop in sales. Their next question for the startups: Can you really survive for the duration on your default-alive plans? That exercise forced at least some of the portfolio companies to adopt what Davidson calls the lifeboat theory — to stay afloat, you throw overboard everything except what you absolutely need. 

There were some unexpected outcomes from that exercise. Some companies that Davidson and his colleagues had considered beyond hope of saving were able to find ways to give themselves new life. Some of them, like liquor delivery company Saucey, even benefitted from the crisis, seeing a surge in sales.

"We had some upside surprises," Davidson said.

But the firm also determined that a handful of startups weren't going to make it through the crisis and weren't worth putting more money or effort into, he said. He declined to name any.

"It was a very small number," Davidson said.  "I guess we were lucky that way."

Davidson worried about the "morals" of startups applying for loans

About the time when Bullpen was stress-testing its startups, the federal government enacted the CARES Act, the $2 trillion coronavirus stimulus package. That law included a $350 billion loan program for small businesses that included the promise of loan forgiveness if companies used the money to cover their payroll, utilities, and mortgages or rent. Although many startups would appear to qualify, because they have fewer than 500 employees, there was some uncertainty about whether certain regulations would bar them from participating in the program.

Davidson and his colleagues spent the next couple of weeks trying to figure out whether their startups would be able to apply. Then, once they determined the companies largely could, they considered whether they should. The team addressed that question with another round of analysis, sorting their companies into various categories.

Some were too big or didn't qualify for other reasons. Some were going to be fine without the the loans. Some weren't going to make it even if they got the stimulus funds. But some stood to benefit from them.

Bullpen wanted to make sure companies thought long and hard about whether to apply for the funds, Davidson said. Davidson emailed the firm's founders, urging them to think about the ethical issues involved. Because of the limited amount of money in the program, it was likely that the startups that scored  loans would be getting them at the expense of other companies that might have needed them more.

"Consider the impact of what you're doing," Davidson said he told the founders in the emails. "This is not just a money decision, it's a moral decision."

In the end, more than half of the 60 companies in Bullpen's portfolio applied for the small business loans. At least some of them plan to use the money to rehire people they laid off in an effort to survive the crisis, Davidson said.

"I like those companies," he said. "That's exactly the spirit of what the ... program is all about."

Got a tip about a startup or the venture industry? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

SEE ALSO: SoftBank is backing out of its plan to buy $3 billion worth of WeWork shares, including nearly $1 billion from former CEO Adam Neumann

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A Harvard medical professor is now a billionaire after his early stake in Moderna soared 17,000%

Thu, 04/23/2020 - 5:36pm

  • Timothy Springer, a medical professor at Harvard University, saw his net worth pass the $1 billion threshold this week as his early stake in the biotech firm Moderna soared, Bloomberg reported Wednesday.
  • The professor invested $5 million in the company early on, and the stake's value has since swelled to more than $800 million, Bloomberg said.
  • Moderna shares have more than doubled in the year to date as its experimental coronavirus vaccine moved to human trials and received more than $400 million in funding from the US government.
  • Watch Moderna trade live here.

Timothy Springer, a Harvard University medical professor, is now worth more than $1 billion after his early stake in the biotech firm Moderna skyrocketed through 2020, Bloomberg reported on Wednesday.

The company's experimental coronavirus vaccine is among the few to have advanced to human trials. Springer invested $5 million in Moderna before it went public in 2018, and the firm's success means his stake's value has ballooned 17,000%, to more than $800 million, according to Bloomberg.

A small group of scientists, executives, and investors minted extraordinary gains in the biotech sector as the coronavirus outbreak escalated to a severe pandemic. Those with stakes in Moderna saw their net worth surge the most, followed by those invested in Novavax and Gilead.

Read more: The CEO of a $29 billion asset manager who's steered his firm since 9/11 told us why pessimism about the coronavirus crisis is overblown — and shared 3 stock picks for a new normal in healthcare

Moderna traded at $50.39 per share as of 11:20 a.m. ET on Thursday, up about 162% year-to-date.

The Department of Health and Human Services recently agreed to pay the biotech company more than $400 million to develop its mRNA-1273 vaccine.

The windfall isn't Springer's first. The professor made roughly $100 million in 1999 when his first business was acquired by Millennium Pharmaceuticals, Bloomberg said.

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Credit Suisse outlines 5 reasons why stock traders should buy any dip that transpires this year — even as the market grapples with the coronavirus

Thu, 04/23/2020 - 5:30pm

  • Global investment strategists at Credit Suisse recently advised clients to buy any dip in US stocks this year.
  • They provided five reasons why adding to stock exposure on any signs of weakness would pay off in the long run.
  • The firm's strategists told clients in a note that they expected the S&P 500 to settle at 2,700 at the end of this year and rise to 3,100 next year.
  • The index was trading around 2,800 on Wednesday.
  • Visit BI Prime for more markets and investing coverage.

Credit Suisse's global equity strategists just issued fresh guidance to stock investors: The near term doesn't look great, but the next year looks promising.

That long-term bullishness informs the firm's recommendation to buy stock-market dips when given the opportunity. It may take a while for solid gains to materialize, but Credit Suisse said such a strategy would pay off for patient investors.

"We would be buying into weakness and expect end-21 market levels to be much higher," the team led by strategist Andrew Garthwaite told clients in a Wednesday report, referring to the end of 2021.

The strategists expect the S&P 500 to fall to 2,700 at the end of this year and rise to 3,100 next year; the index was trading around 2,800 in Wednesday's session. Their buy-the-dip recommendation comes even as the firm expects a slight dip into year-end.

Equity markets around the world have plunged this year, swinging wildly as efforts to stem the coronavirus outbreak have dented corporate earnings, consumer spending, and overall economic growth.

The S&P 500 has rallied about 26% since its low in late March as the government responds to the pandemic with fiscal stimulus, hoping to cushion the pandemic's blow.

The Dow Jones Industrial Average, for its part, lurched out of the longest bull market on record last month only to technically reenter a new one within weeks.

At Credit Suisse, the strategists boiled down their thinking to five main points around why the current environment lends itself to buying opportunities.

The risks they list to this overall thesis include "early fiscal tightening" from the government and limited immunity among people who have recovered from the virus. Many Wall Street strategists have pointed to the number of new coronavirus infections as the chief metric in assessing the market's direction and recovery.

1. 'We should approach pre-virus GDP levels in the US and Europe by end-2021.'

With an estimate for a year-end 2021 recovery, the strategists are drawing on Credit Suisse economists' views around when gross domestic product will return to previrus levels. 

That's more optimistic than the view of the International Monetary Fund, which the firm views as "consensus," and does not call for a recovery in economic output soon.

"To a large extent, we think we have now seen the appropriate monetary and fiscal response required to return to pre-virus levels of GDP by end-2021," the strategists wrote.

Last month, the Federal Reserve lowered its benchmark interest rate twice, and the federal government passed a $2 trillion stimulus package to aid the US economy. Part of that effort included a small-business-loan program to assist struggling businesses and their employees. 

"The key is whether we have the appropriate level of loan guarantee schemes in place to prevent a very large rise in bankruptcies and very large amounts of fiscal easing to offset the rise in the saving ratios," Credit Suisse wrote.

2. The government's efforts to alleviate some pain will 'remain easy.'

The strategists think fiscal policy "will remain easy" and that "easy money, easy fiscal policy, and central banks encouraging an inflation overshoot will allow inflation to rise" to between 2.5 and 3%. 

In other words, Credit Suisse thinks eased lending conditions from the Fed — combined with government-led fiscal-stimulus efforts — will buoy the market in the future.

In fact, the team believes the "only economically and politically pragmatic solution" out of this crisis is a "very extended period of negative real rates."

At the same time, they said modern monetary theory — a theory that says governments can print more money to avoid a deficit while keeping a lid on inflation — would now give the government cover to maintain loose fiscal policy. 

3. Equity risk premium is proving to be a more reliable gauge of the market's direction than its price-to-earnings ratio.

The strategists untangled two complex gauges of market returns and value in one of their main reasons for forecasting a market recovery next year.

Equity risk premium is reflecting a more accurate picture of the market's health than its price-to-earnings ratio (P/E), the measure of a company's share price to its earnings per share, they said. 

"The ERP remains supportive, unlike P/E," they wrote.

Equity risk premium (ERP) refers to the extra return investors should expect to receive by investing in stocks, traditionally riskier assets than safe-haven government bonds, for instance.

"Based on P/Es, one would expect the market to hit new lows," they wrote. "But the key is that a permanent fall in the real bond yield pushes up the ERP," they added, referring to yields that account for the rate of inflation.

4. The dividend-futures market has fallen too far, suggesting there's upside ahead.

Another reason the strategists believe the broader equity market is poised to rise next year is that the market has dramatically fallen for dividend futures. In their eyes, it's been too extreme of a move.

Dividend futures are sophisticated exchange-traded derivative contracts that allow investors to place bets around a company's future dividend payments to shareholders.

That market's direction can offer insight into how companies are planning to spend their cash and, by extension, paints a picture of their broader health. 

"Clearly the market does not trade earnings futures, but it does trade dividend futures," the strategists wrote, adding that dividend futures for the US, Europe, and particularly the UK "look too pessimistic." 

"We really struggle to see 2021 DPS in the US, Europe and the UK down by 28% to 56% from pre-virus levels given our view on the recovery," they added, referring to dividends per share.

Several companies have pulled back their planned dividend payouts in an effort to preserve cash in recent weeks.

For instance, Ford said last month it would suspend its dividends, a move that will save the automaker $2.4 billion annually, according to a Reuters estimate.

5. 'History is not a guide.'

"History is not a guide this time around" for assessing the market environment, the strategists said. 

They floated the idea that the market's recent recovery from March lows was a "bear-market rally," or a short-term bounce in the middle of a longer-term bear market. Bank of America analysts likened the recent move to the bear-market rally during the global financial crisis, Markets Insider reported this week. 

But that doesn't appear to be the case, and the S&P 500 won't dip below the March lows, Credit Suisse said.

According to the strategists, bear markets paired with economic recessions usually experience lows at least six months after a market tops out. But since 1940, bear-market rallies have been no greater than 21% — whereas stocks have jumped 28.5% at their peak this month. 

"This is the largest bear market rally since 1940 ... if it is a bear market rally," they wrote.

They added: "The key question is whether the current situation is sufficiently different from past downturns to convince us we have seen the market lows; we believe it is." 

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SoftBank-backed Compass is cutting pay and offering equity in exchange — a month after it slashed 15% of staff

Thu, 04/23/2020 - 5:27pm

  • Compass is cutting pay by up to 50% across the firm, with the exception of its product and engineering team and employees who help to recruit new agents. 
  • The employees will receive restricted stock units equivalent to the reduction of salary on August 1 of this year. 
  • The news comes a month after the firm laid off 375 employees.
  • With coronavirus causing a housing market slowdown, the residential real estate space has seen widespread layoffs, including layoffs at Opendoor and Redfin.
  • Visit Business Insider's homepage for more stories.

Compass is cutting pay 10-50% across the firm and replacing the lost wages with stock-based compensation, according to a report.

The news comes a month after the firm laid off 15% of its staff or 375 employees as the coronavirus is causing a dramatic slowdown for the US housing market. 

The pay cuts do not affect Compass's product and engineering team of about 500 or its "strategic growth managers," who recruit new agents, according to a document viewed by The Real Deal. The cuts are temporary, lasting for only three months, the report said. 

The pay cuts comes in tiers, with some executives seeing as much as 50% pay cuts. Those that make less than $75,000 will see a 10% reduction in salary, those that make between $75,000 and $150,000 will see a 20% reduction, and those making more than $150,000 will have their salary cut by 30%. Employees will receive restricted stock equivalent to the amount of the salary reduction on August 1 of this year. In March, CEO Robert Reffkin announced that he would be taking no salary for the year. 

Compass, last valued at $6.4 billion after a $370 million investment from SoftBank last July, has rapidly expanded since it was founded through a strategy of acquiring other brokerages and emphasizing its technology stack. The firm had 2,500 employees at the end of last year. 

The residential real estate world has been hit hard by the coronavirus slowdown. While virtual tour technology has allowed agents to continue showing homes, new data shows that the housing market has slowed to a stop.

SoftBank-backed iBuyer Opendoor laid off 35% of its staff last week and Redfin furloughed almost half of its agents and laid off 7% of its staff. Its remaining employees took a pay cut. Realogy has also cut salaries.

The document said that Compass decided not cut salaries for the product and engineering teams as the firm's recovery hinges on its ability to build the tech platform for real estate, according to The Real Deal. 

March was the real estate company's most successful month to date hiring new agents, according to a source familiar with the matter.

SEE ALSO: SoftBank-backed real estate brokerage Compass just slashed 15% of staff and is pausing marketing as coronavirus slams the housing market

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Tesla just added the chief investment officer of Japan's $1.5 trillion government pension fund to its board of directors (TSLA)

Thu, 04/23/2020 - 5:18pm

  • Tesla announced Thursday that it is appointing Hiro Mizuno to its board of directors. 
  • Mizuno was most recently the chief investment officer of Japan's $1.5 trillion government pension fund, the largest such retirement pool in the world. 
  • The former investment banker's appointment as a director could mark an end to a tumultuous year-and-a-half for Elon Musk's board of directors.
  • Visit Business Insider's homepage for more stories.

Hiromichi (Hiro) Mizuno, a Japanese investment manager and businessman, is joining Tesla's board of directors, the company announced in a regulatory filing Thursday, punctuating a tumultuous 18 months for the company's board.

Mizuno most recently served as the chief investment officer of Japan's $1.5 trillion government pension fund, the largest pension fund in the world, which owns roughly $874 million worth of Tesla stock. Before that post, Mizuno worked in finance roles in New York, San Francisco, and other global business centers.

"We are excited that Hiro has joined our mission to accelerate the world's transition to sustainable energy," Tesla said in a blog post.

Shares of Tesla were little changed in after-hours trading Thursday following the announcement.

His arrival signals yet more change for Tesla's board, which has seen a seismic shift since chief executive Elon Musk's legal tussle with US regulators. As part of a settlement with the Securities and Exchange Commission, the company agreed replace Musk as chairman and add two new independent directors.

First, Australian telecom executive Robyn Denholm took over leadership of the board in November 2018, two months after the $40 million settlement. Her addition was followed shortly after by the addition of Oracle billionaire Larry Ellison and Walgreens executive Kathleen Wilson-Thompson as directors in December 2018.

Following the departures of four other directors and Musk allies — Antonio Gracias, Steve Jurvetson, Brad Buss, and Linda Johnston Rice — this year, the company's board will be reduced to just seven directors. The smaller board will allow Tesla to "operate more nimbly and efficiently, while maintaining new ideas, expertise and experiences on the Board," it said last year.

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Goldman Sachs says Amazon's stock will surge 20% from current levels, making it the new biggest bull on Wall Street (AMZN)

Thu, 04/23/2020 - 5:01pm

  • In a note published Thursday morning, Goldman Sachs raised its Amazon price target to a street high $2,900, implying 20% upside from current levels.
  • Goldman sees the e-commerce giant reporting first quarter earnings "well above consensus expectations on revenue and profitability, while guiding 2Q above consensus on both metrics."
  • Goldman thinks the increase in demand Amazon is experiencing in retail, AWS, and its ads business will steepen the company's long-term growth rate if it is able to meet the challenges of this demand in the midst of a global pandemic.
  • Visit Business Insider's homepage for more stories.

In a note published Thursday morning, Goldman Sachs raised its Amazon price target to a street high $2,900, implying 20% upside from current levels. 

Goldman thinks the e-commerce giant will sail past first quarter earnings estimates when it reports next week, and will give second quarter guidance that is well above consensus estimates on revenue and profitability. The bank expects the increases to be driven by a surge in demand in several of the company's businesses. 

"The increase in demand the company's retail, AWS, and ads business is seeing and Amazon's ability to meet the challenges of this demand, will, we believe, serve to steepen the curve of its long term growth rate, drive incremental profitability, and further deepen the competitive moat around all of its business," Goldman wrote.

Read more: Tim Bratz went from flipping $14,000 houses to a 3,472-unit portfolio worth $275 million. Here's the 'amazing' investment strategy he employs to build his long-term wealth.

The bank noted that while Amazon's stock has significantly outperformed year-to-date, it believes that "the market continues to underestimate the long term value of the Amazon platform as the leader in both the movement of retail online and compute into the cloud, the realization of which is being accelerated by the current crisis along with consumer and enterprise adoption."

Goldman derives its $2,900 price target from a sum-of-the-parts valuation. The bank assigns a near $800 billion valuation to AWS, making it the most valuable segment of Amazon's business. 

The analyst note comes on the same day it was reported that Jeff Bezos would be returning to the day-to-day management of Amazon after years of solely focusing on high-impact projects like Alexa.

Read more: The best small-company stock picker of the past 5 years tells us what he added to his portfolio after the market crashed — and shares his 3 favorite investments for the next decade

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US stocks close mixed as virus drug report offsets oil-market surge

Thu, 04/23/2020 - 4:11pm

  • US stocks closed mixed on Thursday as investors mulled weekly unemployment claims, rebounding oil prices, and a bleak report on a potential coronavirus vaccine.
  • Jobless claims hit 4.4 million in the week ended April 18, declining from previous periods but pushing the metric's five-week total above 26 million.
  • WTI crude soared as much as 33%, to $18.26 a barrel, after President Donald Trump tweeted that the US would "shoot down and destroy" Iranian gunboats if they harassed American ships.
  • The drugmaker Gilead slipped 9% at intraday lows after a mistakenly posted report on its in-development coronavirus treatment revealed the drugg didn't help afflicted patients.
  • Watch major indexes update live here.

US closed mixed on Thursday as markets mulled the latest economic data detailing the coronavirus pandemic's economic fallout.

Jobless claims made in the week ended April 18 reached 4.4 million. It marked a decrease from previous weeks but brought the metric's five-week total to more than 26 million. The latest claims reading is nearly six times the peak weekly level seen during the Great Recession.

"This is another terrible week for layoffs." James McCann, senior global economist at Aberdeen Standard Investments said. "The scale of joblessness in the US is clearly larger than other economies."

Here's where major US indexes closed on Thursday:

Read more: The best small-company stock picker of the past 5 years tells us what he added to his portfolio after the market crashed — and shares his 3 favorite investments for the next decade

Meanwhile, West Texas Intermediate crude contracts for June delivery leaped as much as 33%, to $18.26 a barrel. The recovery followed President Donald Trump's Wednesday tweet threatening to "shoot down and destroy" Iranian gunboats should they harass US vessels. Chevron and Exxon benefitted the most from the energy-sector recovery, gaining as much as 5% and 6%, respectively.

IHS Markit's metric of US business output revealed another ominous drop in economic health. The firm's index tracking manufacturing and service sectors plummeted to 27.4 from 40.9 in March, the fastest monthly decline since 2009 when the series began. 

The coronavirus tore into economic activity with "a ferocity not previously seen in recent history," Chris Williamson, chief business economist at IHS, said in the Thursday report.

Read more: Credit Suisse outlines 5 reasons why stock traders should buy any dip that transpires this year — even as the market grapples with the coronavirus

Stocks whipsawed in the afternoon after a report on the drugmaker Gilead's coronavirus treatment was mistakenly uploaded to the WHO website. The document showed the drug had no benefit among COVID-19 patients. The broad market briefly turned lower on the news before staging a modest comeback. Gilead's stock slid as much as 9% after a short trading halt.

Gilead responded in a statement that the report contained "inappropriate characterizations of the study," and that low enrollment rendered it unable to form "statistically meaningful conclusions."

Investors are now eagerly anticipating an economic reopening after weeks of halted activity and stifled demand. Treasury Secretary Steven Mnuchin said Wednesday that the White House expected "most of, if not all of, the economy" to reopen by the end of August.

Read more: The CEO of a $29 billion asset manager who's steered his firm since 9/11 told us why pessimism about the coronavirus crisis is overblown — and shared 3 stock picks for a new normal in healthcare

Thursday's jobs report suggested that a reboot could face snags as millions of Americans rush to rejoin the workforce.

The tepid session followed a 450-point gain for the Dow on Wednesday. Stabilization of oil prices lifted investor sentiments after the commodity market tanked earlier in the week. Negative oil prices posted on Monday drove volatility higher and sent investors fleeing for havens.

Now read more markets coverage from Markets Insider and Business Insider:

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'Ferocity not previously seen in recent history': US economic output plunged the most since 2009 in April as the coronavirus lockdown spread

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Publicly traded companies have 2 weeks to give back loans intended for small businesses or face 'severe consequences,' Treasury Department says

Thu, 04/23/2020 - 4:10pm

The Treasury Department is asking publicly traded companies who received loans from a fund intended to help small business recover from the pandemic to return the money by May 7 or face consequences, according to new guidance issued on Thursday

The department said it was "unlikely that a public company with substantial market value and access to capital markets" could prove that a federal loan was necessary for it to stay afloat. 

The request from the Treasury Department came after large companies who took loans from the program were criticized heavily as the fund ran out of money — and many small businesses, which the money was intended to help, were unable to get a loan.

Large companies were able to access the funds through a loophole in the restrictions that was meant to save the loans for small-business use only.

Companies who pay back the loan in full by May 7 will be considered to have made their requests "in good faith," the guidance said. 

Treasury Secretary Steven Mnuchin said on Tuesday that "there are severe consequences for people who don't attest properly to this certification. And again, we want to make sure this money is available to small businesses that need it, people who have invested their entire life savings." 

Some companies, like Shake Shack, which received a $10 million loan, said the process was confusing, and when they realized small businesses couldn't access the fund, they gave back their loan to free up more cash. But, some businesses, such as Potbelly, have held on to their money.

Ruth's Chris Steak House, which kept the loan after Shake Shack and others returned the funds, said on Thursday that it would return the money after the request from the Treasury Department. In a statement to Business Insider, the company said, "We intended to repay this loan in adherence with government guidelines. As we learned more about the funding limitations of the program and the unintended impact, we have decided to accelerate that repayment."

Join the conversation about this story »

Here's how Warren Buffett-led Berkshire Hathaway's most important companies are faring in the coronavirus pandemic

Thu, 04/23/2020 - 3:07pm

  • Warren Buffett's conglomerate Berkshire Hathaway owns a variety of companies. 
  • Some of its units have been able to adapt to the coronavirus pandemic, but others have been hit by store closures and furloughs resulting from social-distancing measures. 
  • Here's how some of Berkshire Hathaway's companies are faring amid the coronavirus pandemic. 
  • Read more on Business Insider.

Few businesses have been able to escape the impact of the coronavirus pandemic and lockdowns that are keeping millions of Americans at home. 

Even Warren Buffett, the so-called oracle of Omaha and legendary investor, is seeing the impact of COVID-19 through the portfolio of Berkshire Hathaway, the company he's run for more than five decades. 

The Berkshire Hathaway portfolio has a diverse group of companies spanning many sectors including insurance, retail, energy, and transportation. While this mix helped Berkshire persevere through the Great Recession of 2008, it's now seeing that the coronavirus pandemic is wide-reaching. Some companies in the portfolio have so far been able to adapt to the pandemic, but others have been hit by store closures and furloughs amid social-distancing measures. 

Berkshire Hathaway will report quarterly results in May, and in the same month will host an online version of its famous annual shareholder meeting. Both events will give investors and industry watchers a glimpse into how Buffett views the current crisis, and what the company will do to weather the economic fallout ahead. 

Read more: The best small-company stock-picker of the last 5 years tells us what he added to his portfolio after the market crashed — and shares his 3 favorite investments for the next decade

"We're like the captain of a ship when the worst typhoon that's ever happened comes," Buffett's right-hand man Charlie Munger told The Wall Street Journal in April. "We just want to get through the typhoon, and we'd rather come out of it with a whole lot of liquidity."

In the same interview, Munger commented that battered companies such as the big-four airlines, of which Berkshire is a shareholder, are not calling on Buffett for bailouts amid the coronavirus crisis. 

The company is certainly in solid standing after 2019, when its cash pile grew to a record $128 billion, with a stock portfolio of more than $248 billion in value. Still, investors and Buffett himself have been frustrated by the lack of an "elephant-sized" acquisition — the last major purchase the company made was of Precision Castparts in 2016. 

Last year, Berkshire Hathaway stock underperformed the S&P 500 as Buffett again failed to make a major acquisition, and put less money into share buybacks than investors hoped. Going forward, investors will be looking for any further indication of what Buffett is thinking on both of those scores.

Here's how some of the companies in Berkshire Hathaway's portfolio are faring in the coronavirus pandemic, in no particular order:

1. See's Candies

See's Candies, one of Buffett's favorite companies, had to announce furloughs of staff in early April due to the coronavirus pandemic, Bloomberg reported. Now, the company is testing whether or not it is safe to open some of its shops, according to the report. 



2. Justin Brands

Justin Brands, a shoemaker, has shuttered outlets throughout Missouri, Bloomberg reported. The company also closed two separate production factories in the state and furloughed as many as 161 workers, local paper Springfield News-Leader reported in early April.



3. BNSF

Railroad company BNSF is expecting a decline in rail traffic in the first quarter of the year, Bloomberg reported, citing data from the Association of American Railroads and Bloomberg Intelligence. 



4. Precision Castparts

Manufacturing company Precision Castparts has also taken a hit, Bloomberg reported. The company in April said that it would temporarily halt operations in its Portland, Oregon, plant due to a reduction in customer orders. 



5. Geico

A few of Berkshire Hathaway's companies have benefited amid the pandemic, including one of the earliest in the portfolio, Geico insurance. As shelter-in-place guidelines have taken hold across the US, they've greatly reduced the number of drivers, and therefore accidents taking place, on the road, Bloomberg reported



6. Lubrizol

Lubrizol, a chemical company, has been able to adapt during the coronavirus pandemic and keep staff on board. Currently, it's ramping up production of a chemical used in hand sanitizer, as well as prioritizing products used in medical manufacturing, according to Bloomberg. 

In addition, the company announced Monday that it is contributing to Nike's efforts to provide full-face shields to frontline medical workers. 



Gilead tanks 9% on report its coronavirus drug doesn't help patients (GILD)

Thu, 04/23/2020 - 3:07pm

  • Gilead stock plunged as much as 9% on Thursday after STAT News reported on a summary of preliminary data showing that the biotech's experimental coronavirus drug remdesivir didn't significantly improve patients' conditions in a clinical trial.
  • The summary of the trial's results was mistakenly uploaded to the World Health Organization's website on Thursday, STAT reported.
  • The report contained "inappropriate characterizations of the study," Gilead said in a statement, adding that low enrollment in the trial left it unable to create "statistically meaningful conclusions."
  • Trading of Gilead shares was temporarily halted soon after the report's publication.
  • Watch Gilead trade live here.

The biotech firm Gilead Sciences slid as much as 9% on Thursday after STAT News reported on a summary of preliminary data showing that its experimental COVID-19 treatment remdesivir didn't significantly benefit coronavirus patients.

The summary of the results from a trial in China was accidentally uploaded to the World Health Organization's website on Thursday, STAT reported. Gilead said in a statement that while the trial was ended early because of low enrollment, "trends in the data suggest a potential benefit" of remdesivir in treating COVID-19.

The summary indicated that the drug failed to accelerate the patients' improvement or keep them from dying, STAT said. Trading of Gilead shares was temporarily halted soon after the report's release as investors dumped the stock.

"We believe the post included inappropriate characterizations of the study," Gilead said. "Importantly, because this study was terminated early due to low enrollment, it was underpowered to enable statistically meaningful conclusions."

Read more: The best small-company stock-picker of the last 5 years tells us what he added to his portfolio after the market crashed — and shares his 3 favorite investments for the next decade

"In response to WHO asking for information and studies to be shared early, a draft document was provided by the authors to WHO and inadvertently posted on the website and taken down as soon as the mistake was noticed," WHO said in a statement. "The manuscript is undergoing peer review and we are waiting for a final version before WHO comments."

Gilead is conducting several phase-three trials of remdesivir around the world to determine whether the drug is effective in treating COVID-19. The company's stock jumped nearly 10% last week after STAT reported on researchers describing promising data from a Chicago trial.

News of the positive signs from the Chicago trial lifted the entire stock market the same day.

Read more: Tim Bratz went from flipping $14,000 houses to a 3,472-unit portfolio worth $275 million. Here's the 'amazing' investment strategy he employs to build his long-term wealth.

Remdesivir was initially developed to combat Ebola.

Gilead traded at $76.11 per share as of 1:30 p.m. ET on Thursday, up roughly 19% year-to-date.

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I drove the Ford F-150, Chevy Silverado, RAM 1500, Toyota Tundra, and Nissan Titan in a battle of full-size pickups. Here's how they ranked. (GM, F, FCAU)

Thu, 04/23/2020 - 2:28pm

America loves pickup trucks, especially full-size pickups! In 2019, about 17 million new cars and trucks were sold in the US, and of those, many millions were half-tons.

The king of the hill, for 43 years, has been the Ford F-150. But the Chevy Silverado (and its stablemate, the GMC Sierra) did pretty well too. The RAM 1500 was Business Insider's 2019 Car of the Year, an indication of how important pickups are to automakers' bottom lines.

And lest we forget, the Toyota Tundra and the Nissan Titan are both made in the USA and have been in the market for over a decade each.

So let's get to it and see how these big guys ranked!

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Let's start at the top of the mountain. The Ford F-150 has been America's bestselling vehicle for 43 years.

Read the comparison with the Silverado »



My 2019 Ford F-150 4x4 SuperCrew was very well optioned, with an added Limited package that took the price above $74,000.

The F-150's design refresh wasn't anything dramatic. The biggest difference was the beefed-up front grille, lending a more aggressive demeanor to America's favorite truck.

The "agate black" paint job and shimmering chrome highlights gave this pickup a near-luxury vibe. As you can see, my tester came with a short bed. We generally don't get the longer box for our review vehicles.

The short box is more than adequate for most jobs that don't involve ranching, farming, or serious construction. The bed liner protects the metal from rust and corrosion.

Let's take a look at the Ford's EcoBoost engine — the only V6 in this comparison!

This high-output variant of the 3.5-liter V6 is something: The turbocharged mill cranks out 450 horsepower with 510 pound-feet of torque. That beats the 5.0-liter V8 engine by a notable margin (395 horsepower and 400 pound-feet of torque).

The power is routed to the four-wheel-drive system by a 10-speed automatic transmission.

Fuel economy is so-so, at 17 mpg city/21 highway/19 combined. But the Raptor-grade motor yields a 0-60 mph time of just over five seconds. Acceleration is sort of staggering for a truck that weighs in at almost 5,700 pounds and can tow 12,000 pounds.

Weirdly, I had trouble running the gas out of my tester, though I didn't take it on an extended road trip.



The F-150 has a multifunction steering wheel, leather-wrapped, and an analog-digital instrument cluster that can be customized to display a wide range of vehicle info.

The "camelback" two-tone leather interior on my F-150 test truck was el primo. The front seats are heated, cooled, and exceptionally comfortable.

The F-150's infotainment system runs on what is by contemporary standards a modest 8-inch central touchscreen. The Sync 3 system is generally superb, with excellent navigation, easy Bluetooth device pairing, USB integration, and a SiriusXM introductory subscription. Bonus points for the wonderful Bang & Olufsen premium audio setup.

I also sampled the high-performance version of the F-150, the Raptor, a few years back. It was stupendous.

Read the review »



In summary, the Ford F-150 is ... the friggin' Ford F-150! A truly great pickup that truly deserves its reputation.

On to the usually No. 2 player in the US full-size-pickup market: the Chevy Silverado. Chevy redesigned and relaunched the perennial aspirant to the throne in the US, putting it on sale for the 2019 model year.

Read the review »



My "summit white" Silverado 4x4 LTZ Crew Cab stickered at $57,000, well above the base work truck ($30,000) but far below the $74,000 F-150 Limited 4x4 SuperCrew. The Silverado simply wasn't as fancy.

This Silverado isn't a huge departure from the previous generation. But with that massive grille and bow-tie badge, it retains road presence.

My tester featured a tonneau cover for the bed.

The short box could swallow up pretty much everything I threw at it. The spray-on bed liner is $500 extra.

The Silverado could be outfitted with a 2.7-liter turbocharged four-cylinder, a 4.3-liter V6, a 5.3-liter V8, a 3.0-liter inline-six-cylinder diesel — or, in the case of my tester, a 6.2-liter V8.

At full bore, the 6.2-liter V8 makes 420 horsepower with a whopping 460 pound-feet of torque. That's 65 more ponies than the 5.3-liter V8 mill. It can propel the truck to 60 mph in about six seconds, sending the power through a 10-speed automatic transmission. The MPGs are actually respectable, at 16 city/20 highway/17 combined.

The V8 motors have a cylinder-deactivation feature that can drop the engine down to a fuel-sipping two, if all you're doing is humming along at highway speeds. (Chevy calls it "dynamic fuel management.")



The "Gideon/very dark atmosphere" interior is oddly named but still quite pleasant, if a bit on the utilitarian side.

The Silverado's as-tested interior wasn't as flashy as the Ford's — nor the RAM 1500's, as we'll soon see — but it had most of the same features ...

... including a multifunction leather-wrapped steering wheel. And the Silverado gets extra points for having a good old-fashioned column shifter!

Ford's Sync 3 infotainment system is good, but the Chevy's is better. The 8-inch center touchscreen isn't huge, but it is responsive, with a few buttons and knobs to fall back on.

There's SiriusXM radio, plus a full array of USB and AUX ports, and even a 120-volt outlet. OnStar provides 4G LTE WiFi connectivity, and, as with the F-150, Apple CarPlay and Android Auto are available.



I had also checked out a Chevy Silverado Z71, Chevy's version of the Ford Raptor.

Read the Raptor-versus-Z71 comparison »



To sum it up, I couldn't find anything substantial to dislike about the Silverado. And I found plenty to enjoy.

Time for our 2019 Car of the Year, the formidable RAM 1500.

Take a closer look at our 2019 Car of the Year »



The 2019 RAM 1500 Crew Cab I originally tested was a Western-themed Laramie "Longhorn" edition, which was $54,000 before many extra features. As tested, the price was $68,500. We drove the vehicle a total of three times, in Los Angeles and the New York-New Jersey metro area.

The RAM's front end is a study in forcefulness, intended to invoke semis and deliver a singular road presence.

The RAM 1500 weighs about 5,400 pounds and can tow 12,750 pounds.

Each of my two East Coast test trucks had short beds, and one of them had a nifty retractable tonneau cover.

Engine time! Let's pop that hood.

The mighty Hemi powerplant in our test truck featured a mild hybrid "eTorque" system coupled to the 5.7-liter V8, making a total of 395 horsepower with 410 pound-feet of torque. The 0-60 time is about six seconds. Fuel economy is OK: 17 mpg city/22 highway/19 combined.

The 2019 RAM 1500 Laramie Longhorn Crew Cab 4x4 is a staggeringly good pickup. The secret weapon, of course, is the four-corner coil or air suspension. (Competitive pickups from Ford and Chevy continue to use rear leaf springs.)

The RAM lineup is known for plush interiors. Here we have one in all black, but crammed with subtle details and elegant textures.

Crew cabs are all about transporting fully grown adults. The back seat of the 1500 is comfortable and quite roomy. Tall humans won't want for legroom.

The 12-inch center touchscreen is stunning. The infotainment system is FCA's Uconnect, which we've found to be excellent.

GPS navigation is solid, and the system offers a suite of apps to go along with USB/AUX ports for device connection. Bluetooth pairing is easy, and the RAM 1500 has wireless charging. Apple CarPlay and Android Auto are also available.



The 2019 RAM 1500 is the best full-size pickup truck I've ever tested. I even got to challenge the 4x4 system with about a foot of snow at our suburban New Jersey test center, and the RAM brushed it off like it was nothing.

It's Toyota Tundra time!

Read the review »



You're not going to confuse the Tundra for anything other than a full-size pickup. Ours had a 5-foot-5 doubled-walled bed and a power-sliding rear window.

Our "super white" test truck was the CrewMax 1794 edition, well appointed and well optioned at almost $53,000. I tested it officially a few years ago. The Tundra is an aging platform; it hasn't been redesigned in over a decade.

Tundra badging on the liftgate was subdued.

I was able to make good use of the bed for a run to my kids' summer camp.

A full-size pickup with a tow rating of 10,000 pounds indicates some serious business under the hood.

The motor is a 5.7-liter V8, making 381 horsepower — but more importantly, supplying 401 pound-feet of bone-crunching torque. A six-speed automatic transmission gets the job done, but I found it to be antiquated relative to the competition. Fuel economy is a thoroughly unimpressive 13 mpg city/17 highway/14 combined.

The interior is roomy and comfortable. The 1794 Tundra is a close second to the RAM 1500 for sheer interior bliss.

The rear seats aren't as plush, but they aren't bad. The fronts were heated and cooled, while the rear bench design allowed for three passengers.

That's a NICE steering wheel, with the kind of wood-and-leather combo you'd expect to see on Toyota's luxury brand, Lexus. To be honest, the Tundra 1794 is kind of the Lexus of pickups.

Infotainment works fine, with GPS navigation, Bluetooth connectivity, device integration, and satellite radio. The touchscreen interface, however, is small and rather outdated — it's more or less the same as what I have in my 2011 Prius. The JBL audio system is an 11-speaker rig that sounds pretty good, though it doesn't quite cross into premium territory.

No one is asking Toyota to mess with a good thing — and the Tundra is pretty darn good — but the segment is modernizing, and Toyota can't wait forever to roll out a next-gen Tundra. That said, it can wait a few more years without enduring significant damage.

Now let's check out our final contestant, the Nissan Titan.

Read the review »



My 2020 Nissan Titan Pro-4X crew cab was basically brand-spankin'-new, fetchingly attired in a "Baja storm" paint job. Nissan hadn't officially priced this truck, but a little back-of-the-envelope math suggested a sticker just over $50,000.

Nissan has updated the Titan a few times since its 2004 introduction. But the full-sizer has never managed to crack the Big Three's sales, nor really even pester Toyota's Tundra all that much.

Thus the Titan is the forgotten pickup. In 2010s, the Titan sold more than 50,000 units only once, in 2017, while Ford was moving close to 1 million F-150s annually. Sales more than doubled in 2017 and 2018, however, amid a pickup-truck boom, so Nissan figured it was well worth it to upgrade the Titan.



The 4x4 trim level is probably the sharpest option available. My tester sported a crew cab and a 5.5-foot box. Still, I found the Titan's overall looks to be sort of homely.

The all-important bed! As with all our tester trucks, which are usually upscale trims, the bed was lined. I put it to work on a run to my local recycling center, hauling A LOT of cardboard and some glass and plastic. That was literally nuthin' for a truck that can handle over 1,800 pounds.

Let's talk towing for a second.

The Titan is rated in the low end of the segment: 9,660 pounds. You pretty much need 10,000 and above to run with the big boys. However, 9,600-pounds-plus is perfectly respectable, and the truth is that many pickup owners typically need to be above 7,500 pounds to satisfy the majority of their towing needs.

Once you get into the Big Three's reaches, it's great to have the extra capacity, but jumps up in towing weights can send those folks scurrying for heavy-duty trucks. There is a difference between a horse trailer and, say, a small camper.

So for my money, the Titan is good enough, towing-wise. But on paper, its lower capacity is going to be something it's endlessly getting knocked for.



It's hood-poppin' time!

Here we find a 5.6-liter V8, making 390 horsepower with 394 pound-feet of torque! Nissan isn't known for V8s, but it had to commit when it entered the full-size-pickup market.

Inside, the Titan has perhaps the coolest interior in the segment, with its only proper rival being the aggressively styled Ford Raptor.

Some reviewers have dinged the Titan's cab as skimpy on rear legroom, but I thought it was adequate.

No driver would be surprised with this configuration, but while other automakers have started to update their multifunction steering wheels and instrument clusters for 21st-century duty, Nissan is entering the third decade of the millennium with a vibe that's still circa 1998.

About the infotainment system ... Nissan is TRYING. The NissanConnect setup runs on a 9-inch touchscreen. And while the system is respectable, it lacks the ease of use I found in the F-150s, the Silverado/Sierras, and the RAM 1500s. Nissan's foe here is Toyota; the Tundra's system also suffers by comparison with the Big Three.

Nissan's system gets the job done. The navigation is excellent. Bluetooth pairing is simple. There are abundant options for charging, including always useful outlets. And there's a SiriusXM radio trial subscription. And the Titan has Fender's audio system, one of my favorites. It's ideal for garage rock and outlaw country!



The Titan is a good pickup at an appealing price with suitable stats and a V8 that I rather enjoyed but that doesn't match up well against the redesigned generation of half-tons from Detroit.

Now for our ranking of the contestants! Well, our Car of the Year, the RAM 1500, is No. 1. It remains the best full-size pickup truck I've driven.

The Ford F-150 is No. 2!

The updated F-150 edged out its traditional rival, the Chevy Silverado, in this battle royale for full-sizers.

There's a reason the F-150 has been America's bestselling vehicle for 43 straight years: If you want a half-ton pickup, you can simply choose an F-150 and never look back. The F-150, complete with the once radical innovations of added aluminum construction and the EcoBoost turbocharged V6 engine, also demonstrates that the Blue Oval is taking the risks necessary to keep its most important vehicle at the top of its game.

The F-150 is sort of like the Porsche 911 in this respect. You might be tempted by the charms of other sports cars, but when push comes to shove, if you want to make a choice you won't really have to defend, the 911 is a no-brainer.

Likewise, the stalwart from Ford.



The Chevy Silverado is No. 3!

The Nissan Titan is an unexpected No. 4, beating out the better-selling Toyota Tundra.

What I liked most about the Titan was, in the end, its non-Titanic-ness. It functions more like a midsize pickup than a full-size, though it has full-size capabilities. It's also crammed with driver-assist technology, a helpful addition when tooling around on the freeway (though not mission-critical in the truck world).

I also liked the price. With an estimated sticker of about $50,000, the Titan Pro-4X was extremely well equipped for the category. And while I didn't have the chance to test the truck off-road, the combination of Bilstein shocks, General Grabber tires, that torque-y V8, steering that was rather heavy and precise, and a ride that was less than plush indicated that the Titan 4x4 could be a budget Raptor.



And No. 5 is the Toyota Tundra.

The Tundra platform is, to be blunt, ancient. The current generation of the pickup has been around since 2007. Everybody expects Toyota to update it soon, to keep pace with new full-size trucks from Ford, Chevy, and RAM.

Except, of course, there's no rush. The Tundra, while a dandy truck, isn't even remotely competitive with the Big Three. And yet Toyota continues to crank out the vehicle to satisfy what is, by its standards, robust US demand.

You may have anticipated the punchline, set up by that clunky six-speed automatic transmission, that gas-chugging big V8 motor, and the circa-2010 infotainment system. That's right: Toyota doesn't need to expend resources on the Tundra because it isn't a combatant in the great pickup war among the Detroit Big Three.

The crusty old Tundra ain't broken, so why fix it?



Zoom jumps 11% after company announces it added 100 million new users in 3 weeks (ZM)

Thu, 04/23/2020 - 1:52pm

  • Zoom Video Communications jumped 11% in Thursday trading after the company announced it surpassed 300 million daily users on its platform.
  • On April 1, Zoom announced it had exceeded 200 million daily users. That's an increase of 100 million daily users in just three weeks.
  • The company had only 10 million daily users in December 2019, meaning the coronavirus pandemic has led to a 2,900% increase in daily users as people across the globe stay at home and socialize via the popular video conference app.
  • Visit Business Insider's homepage for more stories.

Shares of Zoom jumped as high as 11% in Thursday trading after the video conference company announced it has surpassed 300 million daily users, an increase of 100 million users since its last update on April 1. 

Zoom has seen its business boom since the coronavirus pandemic began earlier this year.

Prior to the pandemic, Zoom had just 10 million daily users, as reported in December 2019. But as millions of people across the globe have been under stay-at-home orders, many have turned to video conferencing with friends and family as a form of socializing.

Read more: The CIO overseeing $270 billion at Guggenheim says stocks will plunge another 27% from current levels — but lays out a series of recommendations for bargain-hungry investors

Zoom's stock has returned almost 150% year-to-date, at a time when it has seen its user base jump nearly 3,000%.

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The best small-company stock picker of the past 5 years tells us what he added to his portfolio after the market crashed — and shares his 3 favorite investments for the next decade

Thu, 04/23/2020 - 1:38pm

  • Mark Rayner, a portfolio manager and principal at Royce Investment Partners, put together the top-ranked global small- and midsize-company fund of the past five years by focusing on market leaders.
  • Some of his favorite stock picks are in industries most investors haven't thought about. 
  • He told Business Insider what he's added to his fund since the COVID-19 pandemic sent shockwaves through global markets and revealed his three top picks for the next 10 years.
  • Rayner's emphasis on companies with the best returns on invested capital has contributed to steady growth but also kept his portfolio safe during the recent downturn.
  • Visit Business Insider's homepage for more stories.

"We're proudly boring in terms of what we do," Mark Rayner of Royce Funds said. "We basically do one thing, and we repeat it."

The one thing he does is nail investments in obscure companies all around the world. Rayner's Royce International Premier Fund is the best international small- and midsize-company fund of the five years for the period ending March 31, according to Kiplinger. It returned 6.4% per year over that stretch.

If he's able to do that, clients probably won't complain about being bored — not that boring seems like such a bad thing these days. But when Rayner says his approach is boring, he means it's systematic. He wants to find companies with "high and consistent returns on invested capital," strong competitive positions, and great balance sheets.

That has naturally steered Rayner away from many of the companies that have suffered the most damage during the coronavirus pandemic. He doesn't buy banks or airlines and rarely adds retail, energy, or natural-resource companies. Instead he favors tech, software, "asset-light" industrial companies, and healthcare-equipment and -services firms.

While Rayner stuck to his rigorous approach during the pandemic sell-off, he took advantage to invest in some companies he had wanted to buy for years. In his exclusive interview, he told Business Insider about a few of them.

What he's added

Nemetschek is a Germany company that makes software used in architecture and construction. Rayner was already a believer, having invested in the company a decade ago only to close his position in 2012.

Its price fell by 50% between mid-February and mid-March, and he said he was happy to have another chance to buy it.

"We sold Nemetschek in 2012 and we shouldn't have," he said. "We spent eight years watching it go up, and it was painful to watch."

Rayner prizes companies that are worldwide leaders in their industries, and he said Ossur, an Icelandic company that makes prosthetic limbs, fit that description. He'd had his eye on it for five years and made a move after its stock price dropped.

He described Ossur as a smart way to get invested in the growing diabetes-treatment industry, as that disease is responsible for most amputations. From Ossur's point of view, that leads to a lot of recurring revenue.

"You have a customer for life because that limb is part of your body. So you get upgrades, you get recurring replacement parts and revenues, etc.," he said.

Another returnee to the fund is Aveva, a British company that makes 3D-design software that Rayner has bought and sold several times before. He said investors feared its business was going to be crushed because its oil and gas industry customers were losing revenue and closing rigs.

"We think the business is much, much more stable than that," he said. "Lots of repeat revenues, subscription fees from that, from their software."

Long-term winners

As a small-company investor, Rayner often looks at the leaders in markets that might sound obscure. The ideal, he said, is a company with a significant lead in its industry but a relatively small market share — meaning it has a lot of room to build on its advantages.

One of those is Spirax-Sarco Engineering, which makes steam systems that are used in factories around the world.

"Steam is the best way at transferring energy around everything from hospitals to food and beverage plants to pharmaceutical plants," he said. "It sounds like the most archaic thing, but it's actually something which has an enduring need."

That gives the company a huge customer base spread across many industries, which means it isn't vulnerable to a downturn in one of them. The result is predictable demand growth and huge returns over time, including more than 50 years of annual dividend growth.

"I think it's grown 5 to 6% per year for 52 years. That's extraordinary," he said. "I think that's a great company. One of our favorite companies."

Even more obscure to most is Karnov, a Swedish company that runs legal databases used by lawyers. According to Rayner, its data is a must-have for lawyers, like Bloomberg's is for people in finance and investing, and demand for lawyers is constant.

"That's a pretty acyclical business, and lawyers look backwards," he said. "So if you have a database of case law, it improves with age, and they've been building this database since the 1920s."

That means the company has extremely high subscription-renewal rates, and the barriers to entry for a competitor are huge. That's a good sign as the company looks to consolidate the Scandinavian market. 

"Not huge growth but fantastic returns on invested capital, and that's the thing you need to invest in," he said.

Third on his list is the largest publicly traded company in Iceland, Marel, which makes software, equipment, and systems used by companies that process all kinds of meat.

"They are the global No. 1 in processing of animal protein," he said. "They only have a 10% market share, much bigger than the No. 2. They spend much, much more on R&D, multiples higher than the No. 2, so they can justifiably claim ... they have the best product."

While investors grew extremely enthusiastic about Beyond Meat last year, he's comfortable betting on them because history shows that as emerging countries grow wealthier, their meat consumption rises.

"You've got the structural growth, you've got the ability to consolidate the market, and you've got that very nice customer retention because there's lots of spare parts. There's lots of software; there's lots of recurring revenue," he said.

SEE ALSO: BANK OF AMERICA: Buy these 12 under-the-radar stocks that have balance sheets perfectly built to weather coronavirus turbulence

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US stocks climb as traders weigh unemployment filings and an oil-market rebound

Thu, 04/23/2020 - 1:26pm

US stocks climbed on Thursday as markets mulled the latest economic data detailing the coronavirus pandemic's economic fallout.

Jobless claims made in the week ended April 18 reached 4.4 million. It marked a decrease from previous weeks but brought the metric's five-week total to more than 26 million. The latest claims reading is nearly six times the peak weekly level seen during the Great Recession.

Meanwhile, West Texas Intermediate crude contracts for June delivery leaped as much as 33%, to $18.26 a barrel. The recovery followed President Donald Trump's Wednesday tweet threatening to "shoot down and destroy" Iranian gunboats should they harass US vessels.

Here's where major US indexes traded at 1:25 p.m. ET on Thursday:

Read more: The CEO of a $29 billion asset manager who's steered his firm since 9/11 told us why pessimism about the coronavirus crisis is overblown — and shared 3 stock picks for a new normal in healthcare

Investors are now eagerly anticipating an economic reopening after weeks of halted activity and stifled demand. Treasury Secretary Steven Mnuchin said Wednesday that the White House expected "most of, if not all of, the economy" to reopen by the end of August. Thursday's jobs report suggested that a reboot could face snags as millions of Americans rush to rejoin the workforce.

Thursday's tepid session followed a 450-point gain for the Dow on Wednesday. Stabilization of oil prices lifted investor sentiments after the commodity market tanked earlier in the week. Negative oil prices posted on Monday drove volatility higher and sent investors fleeing for havens.

Now read more markets coverage from Markets Insider and Business Insider:

Tim Bratz went from flipping $14,000 houses to a 3,472-unit portfolio worth $275 million. Here's the 'amazing' investment strategy he employs to build his long-term wealth.

Elon Musk says possible oil industry bailouts would be 'not the greatest use of money'

JPMorgan's quant guru says US stocks will climb back to record highs in the first half of 2021

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A former Point72 portfolio manager just broke through the industry-wide chill on fund launches by kicking off a $250 million supply chain-focused hedge fund

Thu, 04/23/2020 - 12:58pm

  • Charlie Antrim's Walnut Level Capital is up and running in Colorado.
  • The former Point72 portfolio manager worked for Steve Cohen for more than 15 years, originally as an analyst at Point72's predecessor SAC Capital.
  • Antrim's new firm will focus on investing in the supply chains for agriculture and chemicals, sources tell Business Insider. 
  • The firm is running $250 million to start.
  • Visit Business Insider's homepage for more stories.

Former Point72 portfolio manager Charlie Antrim's Walnut Level Capital recently launched despite the ongoing pandemic caused by the novel coronavirus. 

The $250 million hedge fund currently employs one analyst, but expects to grow, sources tell Business Insider. The firm is focused on investing in the supply chain for chemicals and agriculture. 

Antrim spent more than 15 years working for billionaire Steve Cohen in Stamford, Connecticut, according to his LinkedIn. He joined Point72's predecessor, SAC Capital, as an analyst in 2005, and eventually became a portfolio manager before leaving in June of last year. 

Antrim declined to comment. 

New launches in the hedge fund space have been rare during the pandemic, which canceled large conferences where wanna-be managers meet potential investors and limited travel. 

"People's perspectives are about 12 inches in front of them at this point," said Andrew Saunders, president of Castle Hill Capital Partners and head of the firm's capital introduction services.

"Conversations that have been percolating for months have ground to halt, and it makes sense."

Even established managers have struggled to keep assets invested, with many of the industry's largest investors under a liquidity crunch. Hedge Fund Research said that the first quarter had more than $33 billion in outflows — the most in over a decade. 

SEE ALSO: 'Ground to a halt': Insiders detail the struggles of trying to launch a hedge fund during a global pandemic

SEE ALSO: A liquidity crunch for the hedge-fund industry's biggest backers could force redemptions on even top-performing funds

SEE ALSO: The head of professional development at Steve Cohen's Point72 explains how to climb from fresh college grad to portfolio manager at the $16 billion hedge fund firm

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Here's what 5 economists are saying about unemployment after 26 million Americans filed jobless claims in just 5 weeks

Thu, 04/23/2020 - 12:33pm

  • On Thursday, the Labor Department released its weekly jobless claims report, showing 4.4 million Americans filed for unemployment in the week ending April 18. 
  • In the last five weeks, 26 million Americans have lost jobs and filed for unemployment benefits as economic fallout from the coronavirus pandemic continues. 
  • Here's what five economists said following Thursday's weekly jobless claims report. 
  • Visit Business Insider's homepage for more stories.

In the last five weeks, 26 million Americans have filed for unemployment claims as layoffs persist amid the coronavirus pandemic. 

While the latest report showed a third weekly decline since jobless claims peaked at nearly 7 million in the last week of March, the continued elevated losses are staggering. Cumulative claims in the last five weeks are roughly equivalent to filings between January and October 2009, the worst 10 months of the Great Recession.

"At this stage, the signs are not promising," Seema Shah, chief strategist at Principal Global Investors, told Business Insider. While initial claims have declined from the peak, continuing claims are still growing, showing that people remain out of work despite support from the US government, she said. 

Read more: The CEO of a $29 billion asset manager who's steered his firm since 9/11 told us why pessimism about the coronavirus crisis is overblown — and shared 3 stock picks for a new normal in healthcare

How long people remain out of work is where much of the focus will be from now on, according to Shah. "The more unemployment rises, the slower the eventual recovery may be," she said. 

Going forward, economists will continue to monitor weekly jobless claims as they provide one of the best snapshots of what's currently happening in the US economy. In addition, all eyes will be on the April jobs report, released in early May. That report is expected to show a huge spike in the unemployment rate, reflecting the worst weeks of jobless claims from the coronavirus pandemic. 

Here's what five economists said about Thursday's weekly jobless claims report:

1. RSM: "The magnitude of the shock to the labor market is so large"

"American labor dynamics deteriorated further for the week," Joe Brusuelas, chief economist at RSM, wrote in a Thursday note. In addition, the losses this week imply that the "near real-time unemployment rate has increased to 21.1% at a minimum," he said. 

"The magnitude of the shock to the labor market is so large that it is difficult not to begin thinking about the wage picture for American workers going forward," said Brusuelas, adding that wage growth was sluggish in the previous business cycle. 

"While we anticipate a quotient of wage stickiness among the two lower quintiles of income earners, it is difficult to believe that there will not be significant wage flexibility up the income ladder that will result in wage deflation and an outright decline in the overall level of prices over the next two years," he said.



2. University of Notre Dame Mendoza College of Business: "Certainly light at the end of the tunnel."

"26 million workers have filed for unemployment insurance since March 21st. Let that sink in," economist Jason Reed, assistant chair and teaching professor of finance at the University of Notre Dame's Mendoza College of Business, told Business Insider. 

"The toll on opening the economy are lives. Fiscal policy, like the CARES act and the new relief bill being discussed in congress, are meant to help mitigate the effects of our collective decision to stay at home," he said. 

He continued: "Congress can't bring back Americans lost to the coronavirus but they can, eventually, bring back jobs. Although the numbers are bleak, there is certainly light at the end of the tunnel."

 



3. Navy Federal Credit Union: "Expect claims to stay in the millions for at least several more weeks"

"While still brutally high, unemployment claims fell again for the third week in a row," Robert Frick, corporate economist with Navy Federal Credit Union, told Business Insider.

"Today, more than 1 in 7 Americans who were working in February have filed for help," he said.
"Expect claims to stay in the millions for at least several more weeks as more people lose their jobs, and also because some states' filing systems are still lagging."



4. ING: "Less than half of the working age population of America will be earning a wage by May"

"With the pain spreading from retail and hospitality to other sectors less than half of the working age population of America will be earning a wage by May," James Knightley, ING's chief international economist, wrote in a note Thursday. 

"As we scramble to look for positives, we can say that this is the third consecutive fall in initial claims," he said. "Nonetheless this is an awful outcome (today's number is more than six times higher than even the worst figure during the peak of the Global Financial Crisis in 2009) and underlines the economic pain for US households brought about by the pandemic." 

"It will be interesting to see what happens in the states that are re-opening parts of their economy from this weekend – Georgia, Tennessee, South Carolina and Florida. We would assume jobless claims will fall back sharply here, but if consumers remain reluctant to go shopping or visit a restaurant due to lingering Covid-19 fears, then employment is not going to rebound quickly," he said, adding, "as such it would be another signal that a V-shaped recovery for the US economy is highly unlikely."



5. Economic Policy Institute: The unemployment rate "will likely not reflect all coronavirus-related layoffs"

"All else equal, job losses of this magnitude would translate into an unemployment rate of 18.3%," Heidi Shierholz, senior economist at the Economic Policy Institute, wrote in a note Thursday.

"However, the official unemployment rate, when it is released, will likely not reflect all coronavirus-related layoffs," she said, adding this is because jobless workers are counted only as unemployed if they are actively seeking work.

She continued: "The UI claims of the last five weeks, while extraordinary, don't even include most people who aren't eligible for regular UI but are nevertheless out of work due to the virus—people like gig workers or independent contractors, and many others."





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