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A 179-year-old data shop just raised $1.7 billion in an IPO. Dun & Bradstreet's president walked us through its quick return to public markets and why the company's in high demand.

Wed, 07/01/2020 - 4:44pm  |  Clusterstock

  • Dun & Bradstreet, a data company that was founded in 1841, went public – again – on Wednesday, raising $1.7 billion. 
  • The New Jersey-based company spent the last 16 months as a private company, swapping out leadership, strategy, and technology, president Stephen Daffron told Business Insider. 
  • Now, after an all-virtual roadshow, the company will pay off debt and invest more in technology. 
  • Sign up here for our Wall Street Insider newsletter.

One of Stephen Daffron's golden retrievers could be forgiven for thinking he was part of important conversations – his moniker sounds like the first half of a company name that raised $1.7 billion on Wednesday. 

Duncan hopped on his owner's lap while the president of Dun & Bradstreet participated in a video investor presentation in the leadup to the firm's initial public offering. 

"It made it a little more personal," Daffron said. A remote roadshow "puts more pressure on the bankers, which isn't a bad thing. The virtual roadshows make the bankers earn their money." 

Dun & Bradstreet's recent all-virtual roadshow re-introduced the Short Hills, New Jersey-based data company to the market after 16 months' absence. In 2018, an investor group led by Cannae Holdings, CC Capital, and funds of Thomas H. Lee Partners took the company private in a $5.4 billion cash deal. 

Since its February 2019 privatization, the company, founded in 1841, has focused on revamping its leadership, strategy, and technology, Daffron told Business Insider after he wrapped up at the New York Stock Exchange on Wednesday. 

"We went private under [chairman William Foley]'s leadership to change the direction of the company, from a company that was iconic but had a somewhat tarnished reputation of late to a company that was leading in the digital environment," Daffron said. 

Dun & Bradstreet returned Wednesday as a NYSE-listed company. Cannae and subsidiaries of two other investors, Black Knight and CC Capital Partners, agreed to invest $400 million as part of the offering.

The company first marketed almost 66 million shares at $19-$21, before ultimately selling 78.3 million shares at $22 each. 

The upsized offering underscores companies' need for data – Dun & Bradstreet works with 135,000 groups globally, including 90% of the Fortune 500 – and investors' search for profitability. In the first quarter, the company inked $41.5 million in net income on $385 million of revenue, compared with a $228 million loss in the first quarter of 2019. 

Dun & Bradstreet has data on 360 million businesses, from foot traffic to credit scores. The company saw an uptick in interest in its supply chain risk management business when the pandemic started upending factories in China and global shipping routes, Daffron said. 

With the money it raised from the IPO, Daffron said Dun & Bradstreet will look to pay down its $4 billion debt and invest further in technology. 

The IPO market is picking back up again after a COVID-19-induced pause. In a Tuesday report, Renaissance Capital said 39 IPOs raised $15 billion in the second quarter, despite the slowest April and May since the financial crisis. In the second quarter of 2019, 62 IPOs raised $25 billion. 

In June, the IPO window sprung open, the firm said, with activity largely driven by healthcare companies, Renaissance's research showed. 

Goldman Sachs and Bank of America led Dun & Bradstreet's offering, along with JPMorgan and Barclays. 

SEE ALSO: M&A fine print that prompted lawsuits after the financial crisis is back in the spotlight as mega-deals crumble

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US stocks close mixed as traders weigh vaccine progress against disappointing jobs data

Wed, 07/01/2020 - 4:08pm  |  Clusterstock

  • US stocks closed mixed on Wednesday as investors weighed COVID-19 vaccine progress against a spike in national virus cases.
  • A potential vaccine being developed by Pfizer and BioNTech spurred immune responses in healthy patients, Stat News reported Wednesday.
  • On the economic data front, payroll additions for June came in weaker than expected, according to ADP data.
  • Read more on Business Insider.

US stocks closed mixed on Wednesday as as investors weighed COVID-19 vaccine progress against a spike in national virus cases.

A potential vaccine being developed by Pfizer and BioNTech spurred immune responses in healthy patients, Stat News reported Wednesday. Investors embraced the development, as a successful vaccine is seen accelerating the ongoing economic recovery. Shares of Pfizer surged on the news.

Meanwhile, the June ADP employment report released Wednesday showed that US companies added 2.37 million jobs during the month, less than economists expected. It also revised May's loss of 2.76 million to a 3.07 million gain.

The June nonfarm payrolls report from the government is set to be released Thursday morning at 8:30 a.m. ET. 

Here's where US indexes stood at the 4 p.m. ET market close on Wednesday:

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

A gauge of US manufacturing jumped in June to the highest since April 2019, showing that some growth has returned following pandemic lockdowns earlier in the year. 

Still, new coronavirus infections continue to climb, with the US adding tens of thousands of cases per day, threatening reopening efforts. California and Arizona on Wednesday saw record spikes in new COVID-19 cases.

The count of new daily cases could hit 100,000 if people continue to ignore social distancing and face mask wearing measures, Dr. Anthony Fauci said Tuesday in testimony before a Senate committee. More than 12 states have so far paused or rolled back reopening plans to control spikes in new cases. 

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

Investors also watched the minutes of the Federal Reserve's June meeting, which showed that officials called for more detailed guidance on future policy actions from the central bank. 

Shares of FedEx jumped as much as 17% after the company reported earnings with revenue that beat Wall Street's expectations after experiencing a jump in deliveries during lockdowns. 

Tesla shares rose 4%, putting its market capitalization at $208 billion. It officially surpassed Toyota as the world's most valuable automaker during regular trading on Wednesday.

Oil prices climbed. West Texas Intermediate crude increased as much as 3.3%, to $40.58 per barrel. Brent crude, the international benchmark, rose 3.6%, to $42.62, at intraday highs.

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

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The US economic recovery could take 'just 4 or 5 years' if coronavirus is controlled, Fed president says

Wed, 07/01/2020 - 3:28pm  |  Clusterstock

  • The US could see a quicker economic recovery from the coronavirus pandemic recession if the virus is contained, said Mary Daly, president of the Federal Reserve Bank of San Francisco. 
  • If there's a mitigation strategy or vaccine that allows reengagement in economic activity, "Then it could take just four years or five years," Daly said Wednesday during a virtual event with The Washington Post.
  • But, ultimately, the virus will decide the pace of recovery, she said. A more pervasive, long-lasting hit to the economy would make a recovery take longer.  
  • Read more on Business Insider.

The US could see a quicker economic recovery from the coronavirus pandemic recession if the virus is contained through public measures or a vaccine, according to Mary Daly, president of the Federal Reserve Bank of San Francisco. 

"If we can get the public health issues under control either through a really robust mitigation strategy or a vaccine, then we can reengage in economic activity really quickly," Daly said Wednesday during a virtual event with the Washington Post. "Then it could take just four years or five years. But if we end up with a pervasive, long lasting hit to the economy, then it could take longer."

Earlier this month, Daly said that the US can't wait another 10 years for an economic recovery to reach everyone. The US officially fell into a recession in February, according to the National Bureau of Economic Research, ending a record-long economic expansion that began after the 2008 financial crisis. 

Read more: JPMorgan breaks down how COVID-19 nearly destroyed one of the market's safest trades — and lays out 3 lessons to help investors tackle future crises

There have been some recent positive signs of a rebound. Retail sales surged 17.7% in May, ADP data showed US companies added more jobs in June, and a gauge of manufacturing activity jumped the most since 1980 this month

Still, Daly "would hesitate to call this a recovery," she said. That's because "ultimately the virus will determine the pace at which we can go," she said. 

As states across the country reopen, there have been increasing coronavirus cases that've sparked fears of a second wave that could derail the economic recovery. More than 12 states have paused or rolled back reopening plans in an effort to get new COVID-19 cases under control. 

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Fed officials pushed for clearer guidance on future policy, meeting minutes show

Wed, 07/01/2020 - 3:04pm  |  Clusterstock

  • Federal Reserve officials called for detailed forward guidance and mulled additional policy tools during their June meeting, according to minutes released Wednesday.
  • Policymakers expect "highly accommodative monetary policy" to last "for many years" until the economy poses a robust recovery.
  • Central bankers agreed clearer forward guidance is "important" to effectively guiding markets and legislators through the rebound.
  • Some officials called for guidance tied to inflation or unemployment goals, while others mulled forecasts hinging on specific time frames, the minutes showed.
  • Visit the Business Insider homepage for more stories.

Federal Reserve policymakers urged the central bank in June to issue more detailed forward guidance on its future policy actions.

Minutes from the Federal Open Market Committee's June 9-10 meeting released Wednesday showed the central bank's officials expect easing policies to last "for many years" until the economy largely recovers from the coronavirus-induced recession. In a discussion of the Fed's asset purchase plans, several policymakers agreed that greater clarity around relief programs' duration would ease markets and legislators through the US economic bounce-back.

"Various participants noted that the economy is likely to need support from highly accommodative monetary policy for some time and that it will be important in coming months for the Committee to provide greater clarity regarding the likely path of the federal funds rate and asset purchases," the minutes said.

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

Officials were split on how to implement such forward guidance. Some indicated they'd prefer outcome-based guidance, in which inflation or unemployment goals dictate the pace and rolling back of easing efforts.

Other participants called for forward guidance tied to a specific time frame. Such forecasts set a specific date beyond which easing policies start to be reversed. The committee noted that time-based guidance "would be very challenging" due to the "substantial uncertainty" created by the coronavirus.

Despite the range of ideas on how forward guidance may be implemented, some view the June discussion as guaranteeing its future use.

"In short, unemployment and/or inflation-contingent or (less likely) time-contingent forward guidance on rates is coming," Ian Shepherdson, chief economist at Pantheon Macroeconomics said.

Read more: Goldman Sachs has formulated a strategy that could triple the market's return within a year as volatility remains higher than normal — including 11 new stock picks for the months ahead

The FOMC voted in June to hold interest rates in a range of 0% to 0.25% and indicated additional policies including yield curve control were still under consideration. The Fed also agreed to continue buying Treasury bonds and mortgage-backed securities at a pace of roughly $120 billion per month.

Wednesday's minutes further detailed officials' weighing of yield caps, which involve the purchase of Treasury bonds to target specific rates. FOMC members questioned such policy's effectiveness, and raised concerns around how to maintain control of the size and composition of the Fed's balance sheet. The meeting ended with policymakers deciding against implementing yield caps in the near future. 

"Many participants remarked that, as long as the committee's forward guidance remained credible on its own, it was not clear that there would be a need for the committee to reinforce its forward guidance with the adoption of a YCT policy," the minutes showed.

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Goldman Sachs predicts oil will surge more than 30% by next year. Here are 9 energy stocks it says to buy now to benefit from the recovery.

Wed, 07/01/2020 - 2:54pm  |  Clusterstock

  • Despite rising fears of a second wave of the coronavirus outbreak, oil prices continue to climb. 
  • The rally of Brent crude futures, the international benchmark, will carry on into next year. Goldman Sachs analysts expect a barrel of Brent to cost more than $55 in 2021. 
  • The analysts are bullish on Canadian oil companies and refiners with significant non-refining businesses, such as retail. 
  • For more stories like this, sign up here for our weekly energy newsletter, Power Line.

Despite growing fears of a second coronavirus outbreak, which analysts say could stymie the oil market recovery, Brent crude, the international benchmark, continues to climb.

At $42 a barrel on Wednesday, it's up 7% since the start of June. 

The market rally will carry on into next year, according to analysts at Goldman Sachs led by Neil Mehta. In a note Wednesday, they said a barrel of Brent is set to soar beyond $55 a barrel, on average, by next year — up more than 30% from where it stands today, and just $10 below where it sat at the start of 2020. 

An uptick in demand for gasoline and other fuels is driving the recovery as economies around the world relax stay-at-home restrictions. Data from Apple Maps show that routing requests, a proxy for road traffic, were up about 30% on Wednesday, relative to the start of the year. 

A second outbreak of the coronavirus puts the recent rally at risk, according Goldman Sachs and other major banks, but some industry leaders aren't so concerned. 

"The worst is behind us," Amin H. Nasser, the CEO of Saudi Aramco, the world's largest oil company, said in an interview with the consultancy IHS Markit. "I'm very optimistic about the second half of this year. I am also not as concerned about a second wave because I think we are much better prepared now."

Click here to subscribe to Power Line, Business Insider's weekly energy newsletter.

According to the Goldman Sachs note — which focused on oil majors and refiners — a handful of stocks are poised to soar as energy markets continue to find their footing. Here are the bank's top picks. 

Goldman Sachs is betting on Canadian oil companies

With Brent heading towards $55 a barrel next year, the analysts expect six Canadian oil companies in their coverage, such as Canadian Natural Resources and MEG Energy, to yield high free-cash flows, which is a measure of profitability. Meanwhile, they also expect them to be "capital disciplined over the next year." 

"We do not expect the companies to pursue growth projects," the analysts wrote. "We instead expect focus on deleveraging."

Goldman Sachs also says that while these Canadian oil stocks are not perceived as "winners" from an environmental, social, and governance (ESG) perspective, the bank believes that they have "taken positive steps to improve the environmental footprint."

The bank favors Canadian Natural Resources (CNQ), Meg Energy (MEG), Cenovus Energy (CVE), and Suncor Energy (SU), all of which it rates "buy."

The bank favors refiners that are 'non-refiners'

It sounds confusing: "Buy 'Non-Refining' refiners," the analysts wrote.

What they mean is that investors should opt for oil refining companies — which turn crude into fuels and other products — that have other revenue-generating business lines, such as gas stations with food sales. That's because margins for refining oil are currently slim. 

The analysts favor Marathon Petroleum (MPC), Phillips 66 (PSX), and Par Pacific Holdings (PARR). The non-refining business lines of all three companies are more valuable than their refining segments, the analysts said. 

On the flip side, Goldman Sachs is warier of "pure-play" refiners, which it says "will be more challenged over the next year." The bank suggests selling PBF Energy (PBF), HollyFrontier (HFC), and CVR Energy (CVI)

Among the integrated oil giants, follow the cash

The bank's approach among oil majors — companies that operate both upstream and downstream businesses — is straightforward: Favor companies with strong free-cash-flow generation. 

ConocoPhillips (COP) and Chevron (CVX) fit that description and have "strong balance sheets that can weather 2020 with a sustainable dividend," they wrote. The bank rates them as "buy." 

Exxon Mobil (XOM), which the analysts suggest selling, presents a more concerning picture, they said. They estimate the breakeven price of Brent crude to cover Exxon's dividend with free-cash-flow is $75 a barrel — about $20 more per barrel than their forecast for Brent in 2021. 

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These were the 10 most popular stocks on Robinhood in the month of June

Wed, 07/01/2020 - 1:54pm  |  Clusterstock

  • Robinhood, the zero-commission brokerage platform that is popular with millenials, has seen a surge in trading volume as the market entered a volatile period due to the coronavirus pandemic.
  • Robintrack is a platform that uses data from Robinhood's API to track how many of its users own a particular stock over time.
  • The compiled data is put into a charting format that helps show the relationship between the price of a stock and popularity with Robinhood users.
  • Here are the 10 most popular stocks on Robinhood in the month of June.
  • Visit Business Insider's homepage for more stories.

Robinhood, the zero-commission brokerage platform that's popular with millenials, has seen a surge in trading volume as the stock market entered a volatile period due to the coronavirus pandemic.

Robintrack is a platform that utilizes data from Robinhood's API to track how many Robinhood users own a particular stock over time. Robintrack was created as a side project by a college student in 2018.

The compiled data is put into a charting format that helps show the relationship between the price of a stock and its popularity with Robinhood users.

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

The data helps identify stocks where investors are either:

  • Buying the dip, which is apparent when the number of Robinhood account users owning a particular stock surges as the stock price falls.
  • Taking profits, which is apparent when the number of Robinhood account users owning a particular stock falls as the stock price rises.
  • Going full FOMO, which is apparent when the number of Robinhood account users owning a particular stock rises as the stock price rises.
  • Jumping ship, which is apparent when the number of Robinhood account users owning a particular stock falls as the stock price falls.

The data is also helpful for contrarian investors to go against the herd and identify popular stocks to sell short or unpopular stocks to buy long.

Here are the 10 most popular stocks among Robinhood users in the month of June.

10. Aurora Cannabis

Aurora Cannabis was the 10th most popular stock on Robinhood in June.

The cannabis company was owned by 456,805 users at the end of June, compared to 473,619 users in the prior month.

The 3.5% decline in Robinhood accounts that own the stock was accompanied with a 12.2% decline in Aurora's stock price in June, signaling that investors are jumping ship in Aurora Cannabis.

Source: Robintrack.net



9. Apple

Apple was the ninth most popular stock on Robinhood in June.

The iPhone maker was owned by 489,538 users at the end of June, compared to 386,289 users in the prior month.

The 27% jump in Robinhood accounts that own the stock was accompanied with a 14.7% jump in Apple's stock price in June, signaling that investors continue to add shares as the stock price moves higher.

Source: Robintrack.net



8. GoPro

GoPro was the eighth most popular stock on Robinhood in May.

The camera company was owned by 491,016 users at the end of June, compared to 477,193 users in the prior month.

The 2.8% jump in Robinhood accounts that own the stock was accompanied with a 1% jump in GoPro's stock price in June, signaling that investors are adding to their GoPro positions as the stock rises.

Source: Robintrack.net



7. Carnival

Carnival was the seventh most popular stock on Robinhood in June.

The cruise line company was owned by 491,639 users at the end of June, compared to 465,631 users in the prior month.

The 5.6% jump in Robinhood accounts that own the stock was accompanied with a 4.3% jump in Carnival's stock price in June, signaling that investors were adding shares as the stock moved higher.

Source: Robintrack.net



6. Microsoft

Microsoft was the sixth most popular stock on Robinhood in June.

The software company was owned by 492,023 users at the end of June, compared to 450,736 users in the prior month.

The 9.1% jump in Robinhood accounts that own the stock was accompanied by a 11% jump in Microsoft's stock price in June, signaling that investors continue to add shares as the stock moves higher.

Source: Robintrack.net



5. Delta Air Lines

Delta Air Lines was the fifth most popular stock on Robinhood in June.

The airline operator was owned by 592,457 users at the end of June, compared to 540,543 users in the prior month.

The 9.6% jump in Robinhood accounts that own the stock was accompanied with a 11% increase in Delta's stock price in June, signaling that investors are adding shares as the stock moves higher.

Source: Robintrack.net



4. Disney

Disney was the fourth most popular stock on Robinhood in June.

The house of mouse was owned by 624,447 users at the end of June, compared to 573,781 users in the prior month.

The 8.6% jump in Robinhood accounts that own the stock was accompanied with a 5% decline in Disney's stock price in June, signaling that investors bought the dip in Disney shares.

Source: Robintrack.net



3. American Airlines

American Air Lines was the third most popular stock on Robinhood in June.

The airline operator was owned by 654,611 users at the end of June, compared to 548,123 users in the prior month.

The 19.4% jump in Robinhood accounts that own the stock was accompanied with a 24% jump in American's stock price in June, signaling that investors are adding shares as the stock moves higher.

Source: Robintrack.net



2. General Electric

General Electric was the second most popular stock on Robinhood in June.

The industrial conglomerate was owned by 834,275 users at the end of June, compared to 778,146 users in the prior month.

The 7% jump in Robinhood accounts that own the stock was accompanied with a 4% increase in General Electric's stock price in June, signaling that investors are adding shares as General Electric's stock moves higher.

Source: Robintrack.net



1. Ford

Ford was the most popular stock on Robinhood in June.

The auto manufacturer was owned by 925,539 users at the end of June, compared to 865,385 users in the prior month.

The 7% jump in Robinhood accounts that own the stock was accompanied with a 6.5% increase in Ford's stock price in June, signaling that investors continue to add shares as the stock moves higher.

Source: Robintrack.net



US stocks rise as COVID-19 vaccine progress offsets disappointing jobs data

Wed, 07/01/2020 - 1:37pm  |  Clusterstock

US stocks rose Wednesday as positive coronavirus vaccine news offset disappointing jobs data. 

A potential COVID-19 vaccine being developed by Pfizer and BioNTech spurred immune responses in healthy patients, Stat News reported Wednesday. Investors embraced the development, as a successful vaccine is seen accelerating the ongoing economic recovery. Shares of Pfizer surged on the news.

Meanwhile, the June ADP employment report released Wednesday showed that US companies added 2.37 million jobs during the month, less than economists expected. It also revised May's loss of 2.76 million to a 3.07 million gain.

Here's where US indexes stood at 1:30 p.m. ET on Wednesday:

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

A gauge of US manufacturing jumped in June to the highest since April 2019, showing that some growth has returned following pandemic lockdowns earlier in the year. 

Still, new coronavirus infections continue to climb, with the US adding tens of thousands of cases per day, threatening reopening efforts. The count of new daily cases could hit 100,000 if people continue to ignore social distancing and face mask wearing measures, Dr. Anthony Fauci said Tuesday in testimony before a Senate committee. 

More than 12 states have so far paused or rolled back reopening plans to control spikes in new cases. 

Shares of FedEx jumped as much as 17% after the company reported earnings with revenue that beat Wall Street's expectations after experiencing a jump in deliveries during lockdowns. 

Tesla shares rose 4%, putting its market capitalization at $206 billion, officially surpassing Toyota as the most valuable automaker in the world. 

Oil prices climbed. West Texas Intermediate crude increased as much as 3.3%, to $40.58 per barrel. Brent crude, the international benchmark, rose 3.6%, to $42.62, at intraday highs.

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

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3 reasons why JPMorgan just doubled down on its US stock bullishness

Wed, 07/01/2020 - 1:33pm  |  Clusterstock

  • JPMorgan's Marko Kolanovic, who called the bottom in stocks back in March and has recommended investors stay bullish throughout the second quarter market rally, just doubled down on his bullish call for US stocks.
  • The bank listed three reasons why investors should remain bullish on stocks over the short to medium term.
  • Investor positioning, strong monetary and fiscal policy support, and COVID-19 infection data support Kolanovic's call to stay bullish on stocks.
  • Visit Business Insider's homepage for more stories.

Investors should continue to stay bullish on US stocks in the short to medium term, JPMorgan's Marko Kolanovic said in a note published on Tuesday.

Kolanovic correctly called the bottom in stocks in March, and has remained bullish on stocks throughout the second quarter, which posted its best quarterly rally since 1987. Kolanovic has often reminded investors why they should stay bullish along the way.

Now, Kolanovic lists three new reasons why investors should continue to favor US stocks.

1. "Positioning remains light around macro and systematic investors." Kolanovic said summer seasonality "should help the volatility spike continue to fade," which could drive investors to further add exposure to stocks throughout the summer. Additionally, momentum signals "are mostly positive for US large caps," which could drive traders to buy.

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

2. "Monetary and fiscal policy support." The COVID-19 pandemic led to a run on liquidity during the February and March sell-off. According to Kolanovic, liquidity "plunged 90% to record lows, as measured by S&P 500 futures market depth." Since then, liquidity "has recovered meaningfully from the March lows," and many investors credit monetary policy by the Fed for assuaging liquidity concerns and keeping credit markets functioning.

3. "Higher COVID-19 incidence is mainly impacting younger populations." Kolanovic said the recent surge in COVID-19 cases over the past few weeks is not impacting the older population like it did in March and April, and that the younger population has "drastically lower mortality rates and likely reflects higher testing rates, recent protests, backlogs of hospital visits, and increased economic activity."

While JPMorgan is bullish on stocks, plenty of investors are skeptical. According to a recent survey by DataTrek, there is zero conviction in this stock market rally as investors are evenly split as to where the market ends the year from current levels. 

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

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FedEx skyrockets 17% on surprise revenue beat and a slew of Wall Street upgrades (FDX)

Wed, 07/01/2020 - 12:55pm  |  Clusterstock

Shares of FedEx surged as much as 17% to $163 Wednesday after the company's fiscal fourth quarter earnings release Tuesday exceeded Wall Street's expectations. 

The courier service still reported a loss, but had a better-than-expected quarter ending May 31 as the coronavirus pandemic fueled a jump in home deliveries that drove a 20% increase in revenue for FedEx's ground-delivery business. 

Here are the key numbers: 

  • Adjusted earnings per share: $2.53 reported, versus $1.52 (expected)
  • Revenue: $17.4 billion reported, $16.4 billion (expected) 

Following the results, more than a dozen Wall Street analysts upgraded their price targets for FedEx, according to Bloomberg data, seeing further growth ahead for the company even as the economy recovers from coronavirus pandemic-induced lockdowns. 

"Revenue growth was above our forecast by almost 3%, with Ground the star of the show as volumes rose by roughly 25% YOY," said Goldman Sachs analysts led by Jordan Alliger in a Tuesday note. "This far outstripped our high-single digit forecast and is directly related to surge in E-Commerce shipments — demonstrating perhaps that there is significant eCommerce potential outside of Amazon." 

Goldman increased its price target to $169 from $153 and reaffirmed its "buy" rating on FedEx shares. 

Read more: JPMorgan breaks down how COVID-19 nearly destroyed one of the market's safest trades — and lays out 3 lessons to help investors tackle future crises

JPMorgan also boosted its FedEx price target to $188 from $145, and upgraded the company to "overweight," the equivalent of a "buy" rating. 

"FedEx set a more constructive tone on raising the price of capacity in the 'new normal' than we expected with holiday peak season surcharges applying to large customers for the first time in three years," wrote analysts led by Brian Ossenbeck in a Wednesday note. 

UPS, which jumped as much as 8% Wednesday, could also benefit if it can follow FedEx's lead on yields, according to the firm. 

FedEx price targets were also upgraded at Morgan Stanley, Deutsche Bank, Credit Suisse, and more. Analysts have an average price target of $165.40 on shares of the company, and 15 "buy" ratings, 14 "hold" ratings, and one "sell" rating, according to Bloomberg data. 

FedEx has gained roughly 4% year-to-date.

 

 

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THE MILLENNIAL FINANCIAL HEALTH REPORT: How the largest generation is saving and managing their money, and how banks can target products and messaging to reach them

Wed, 07/01/2020 - 12:00pm  |  Clusterstock

As the largest living generation by population, and soon income, millennials are a prime target for banks — butovergeneralizations of their financial health make it hard to attract the group.

Millennials have been the subject of misinformation with regard to financial literacy, spending habits, and brand loyalty. In reality, they're encountering diverse financial milestones, and tailoring products directly to their varied needs can help banks take full advantage of the opportunity presented by serving millennials.

Business Insider Intelligence conducted an exclusive survey to better understand US millennials' financial health. The Master Your Money: Learn & Plan Survey was designed by Business Insider Intelligence and fielded online from November 23 to 27, 2019, to a third-party sample of 2,007 US millennials aged 19-37.

The sample was selected to closely resemble the overall US population (based on census data) on the criteria of age and gender. The results of the survey reveal fresh insights about millennials that banks and other financial services providers can use to build targeted products and tailored messaging for the group. 

Our data highlights three areas that are impeding this generation's financial health: debt, trouble growing savings, and lack of financial education. Millennials' debt is heavily concentrated in credit card debt, student loan debt, and auto debt. Meanwhile, low-income growth and high debt burdens have made it more challenging for them to save. These findings, and our analysis, are supported by interviews with executives from major banks, like JPMorgan Chase and Bank of America. 

But millennials aren't a homogenous group — rather, they behave like three "sub-generations," with distinct lifestyle habits, financial needs, and behaviors. These factors impact the sub-generations differently, making it important for banks to understand the characteristics of millennial consumers in each segment, which can sharpen acquisition and servicing strategies for banking providers. 

In The Millennial Financial Health Report, Business Insider Intelligence identifies strategies for banks and financial services providers to reach millennials. We identify three millennial sub-generations, the unique financial needs and challenges of each, and the ways providers can tap into them. We offer recommendations for acquiring millennial customers, encouraging them to save more, and deepening the customer relationship to become a trusted advisor.

The companies mentioned in this report include: Acorns, American Express, Apple, Bank of America, BuzzFeed, Capital One, Citi, Citizens Bank, Credit Karma, Digit, Disney, Goldman Sachs, Hulu, JPMorgan Chase, Mint, Navy Federal Credit Union, Netflix, Robinhood, Santander, Sprint, Stash, US Bank, Verizon, Wells Fargo.

Here are some key takeaways from the report:  

  • Millennials are estimated to be the largest living generation in the US — but the disparate financial needs of consumers at different stages of this age group can make it challenging for banks to take full advantage of the opportunity presented by serving them.
  • They're often treated like a homogenous group, but millennials can be divided by age into sub-segments that boast different financial realities, which banks need to understand in order to effectively cater to all customers in this generation.
  • Supporting millennials through their unique financial milestones can allow banks to form lifetime relationships with these consumers early on. Banks should take a behavioral approach where they meet consumers' specific needs based on their actions rather than try to broadly serve the generation. 

In full, the report:

  • Uses primary data to identify the unique needs and challenges of each millennial sub-generation.
  • Explores strategies banks should consider to tailor their offerings to millennials' needs in order to improve their financial health via savings tools and, in turn, cement their loyalty as customers.
  • Supports analysis using interviews with executives from incumbent providers like JPMorgan Chase and Bank of America. 
  • Gives recommendations for banks regarding how to acquire, service, and encourage millennials to grow savings. 
  • Highlights noteworthy strategies taken by banks and third-party financial apps to reach this generation. 

Interested in getting the full report? Here's how to get access:

  1. Business Insider Intelligence analyzes the banking industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report
  2. Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started
  3. Purchase & download the full report from our research store. >> Purchase & Download Now

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Top US manufacturing index jumped the most since 1980 in June as reopenings spurred growth

Wed, 07/01/2020 - 11:44am  |  Clusterstock

  • The Institute for Supply Management's manufacturing index climbed back to growth territory in June as states reopened their economies.
  • The key industry gauge leaped 9.5 points to 52.6 last month, notching its biggest single-month increase since 1980. Economists surveyed by Bloomberg expected a reading of 49.8.
  • New orders and production both breached the key threshold of 50, while industry employment landed at 42.1 after a 10 percentage point improvement.
  • Despite the strong improvement, US manufacturing is positioned to "face major challenges" from weak demand, lasting supply chain disruptions, and rebounding virus cases, Gregory Daco, chief US economist at Oxford Economics, said.
  • Visit Business Insider's homepage for more stories.

A key measure of US manufacturing leaped back into growth territory in June as factories reopened and state economies turned back online.

The Institute for Supply Management's manufacturing index surged 9.5 points to 52.6 last month, its biggest increase since 1980. June's increase brings the metric to a 14-month high and pushes it above the key threshold of 50 for the first time since February.

Economists surveyed by Bloomberg expected the gauge to reach 49.8 last month. Readings above 50 indicate the industry is expanding, while a reading below the level indicates broad shrinkage.

Read more: Cathie Wood's firm built 3 of the world's best ETFs, which all doubled in value within 3 years. She told us her 3-part process for spotting underappreciated technologies before they explode.

ISM's measure for new orders improved 24.6 percentage points to 56.4, and its production gauge climbed 24.1 percentage points to 57.3. Employment remained in contractionary territory, landing at 42.1 in June after reading 32.1 the month prior.

In all, 13 of the 18 manufacturing sectors reported growth in June. The four industries declining through the month were transportation equipment, primary metals, fabricated metal products, and machinery.

Yet the report doesn't place the manufacturing industry in the clear. The return to growth follows three months of deep contraction and arrives as the US faces new risks. Spiking coronavirus case counts threaten to shut down factories all over again, and lasting pandemic fallout will likely drag on the industry's rebound. 

"Activity likely bottomed in Q2, however manufacturing will face major challenges that will drag on its recovery," Gregory Daco, chief US economist at Oxford Economics, said. "Looking ahead, weak demand, lingering supply chain disruptions, somewhat tighter financial conditions, historically low oil prices, and highly elevated uncertainty are poised to make for a lackluster recovery."

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

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What is a high-yield checking account? Here's what you need to know.

Wed, 07/01/2020 - 11:40am  |  Clusterstock

 
  • High-yield checking accounts that offer more than 1% APY are becoming more common.
  • But many come with balance or deposit minimums, or require a customer use the bank's bill-pay service or have paychecks deposited directly in order to get the APY.
  • High-yield checking accounts can be a great way to earn more interest on your spending money.
  • Just be sure to read the fine print and research carefully to ensure the account you want fits your lifestyle.
  • See Business Insider's picks for the best rewards checking accounts »

Life is hard without a checking account. Without it, where would you deposit your paychecks? How would you pay your rent, your bills, your credit-card balances? Your checking account is the nexus of your entire financial life. The convenience makes them easy sells, so banks don't feel the need to load them with any extra perks.

Till now. Interest rates for checking accounts have been abysmal for decades, but recently many banks are starting to offer high-yield checking account products — banking options that can net a substantial return to those who use them.

#div-gpt-ad-1579713650634-0 > div > iframe { width: 100% !important; min-width: 300px; max-width: 595px; } window.googletag = window.googletag || { cmd: [] }; googletag.cmd.push(function () { googletag.defineSlot('/1035677/Business_Insider_', [[1, 1], [300, 139], [595, 139], [300, 250], [595, 250], [300, 360], [595, 360], [300, 475], [595, 475]], 'div-gpt-ad-1579713650634-0') .addService(googletag.pubads()); googletag.pubads().enableSingleRequest(); googletag.pubads().setTargeting('category', ["Banking"]).setTargeting('subcat', ["Savings Accounts"]).setTargeting('post_id', []) .setTargeting('post_url', []) .setTargeting('keyword', []) .setTargeting('company-product', []) .setTargeting('post_title', []); googletag.enableServices(); }); googletag.cmd.push(function () { googletag.display('div-gpt-ad-1579713650634-0'); }); What is a high-yield checking account?

A high-yield checking account is exactly what it sounds like: It's a checking account that has an annual percentage yield (APY) that's much higher than those offered by standard checking accounts, which usually offer no interest at all. That means the APY is at least 1%, but you can find accounts that pay around 4%.

(Note that a high-yield savings account is a different product. A high-yield savings account can pay 1% or more in interest, but is intended to be used to save money so it doesn't come with a debit card, you can't take the money out at ATMs, and you're allowed only a minimum number of withdrawals each month.)

Being a special financial product, high-yield checking accounts can come with a lot of strings.

Some high-yield checking accounts may have requirements to qualify for the APY

Just because your high-yield checking account will provide somewhat of a return on your investment doesn't mean you can treat it like a savings account.

The bank may require you to engage in some specific qualifying activities with your account, such as making a minimum number of debit-card or check transactions per month, having at least one recurring direct deposit, or making a minimum number of ATM withdrawals monthly. If you're treating your high-yield checking account like a checking account, none of this should be a problem.

It's standard to see deposit minimums when opening savings accounts, but with high-yield checking accounts, because of the greater operating costs for the institutions offering them, balance and deposit minimums are just as common. Not keeping the minimum balance in your high APY checking account could incur fees or lead to the loss of the high APY. Be sure to read the fine print from your bank before you open your account to understand what some of these terms might be.

Another common practice is for banks to offer a high APY for a checking account, but only up to a certain amount. You may be diligent about keeping $5,000 in your checking account at all times, but the bank may only be paying a high APY on the first $1,000, while the remaining amount draws interest at a standard — and much lower — rate.

Does the account come with fees?

"A major benefit of high-yield checking accounts are that they often come with low to zero monthly fees," says Kimberly Hamilton, founder of Beworth Finance LLC. "That said, you'll want to check for any other charges that may come up — for example, ATM fees. If one financial institution offers a higher interest rate, but tacks on fees, you may want to reconsider the lower interest rate option after all."

While more and more traditional brick-and-mortar banks are offering high-yield checking accounts, the majority of them can be found in online banks. Because they don't have any physical locations, there also aren't any in-network ATMs to visit when you need to make cash withdrawals. With ATM fees averaging $2 to $4, this kind of use could add up pretty quick. Carefully look at the terms and conditions of your checking account to see if it waives or refund ATM fees.

Some banks and credit unions may try to attract new customers by offering high APYs for a limited time, similar to the marketing tactics of 0% intro APR credit card offers. Pay attention to the fine print and don't assume that your high interest rate will last the entire time you hold an account.

Where is high-yield checking available?

Some of the checking accounts with the best APYs are offered only by small credit unions and banks that have a decidedly small reach in terms of geography. Before you open up an account with one of these banks, carefully consider where you might be in a few years. If there's any chance you might move across country, you'll be forced to change banks, and that's a major hassle. If you live a more nomadic life or tend to travel a lot, a major bank with national reach, or an online bank that operates across the US, might be your best bet.

Yet this might not be a problem for long, even with the small, local banks and credit unions.

"Many banks have begun shifting their banking operations online as a means to reduce costs of maintaining a physical network of branches," says Riley Adams, a CPA and founder of The Young & The Invested. "This change has resulted in lower efficiency ratios for banks (percentage of revenue represented by costs, lower is better for measuring bank profitability). In fact, online-only banks are best suited to offer high-interest checking accounts because they face lower costs and must offer higher interest rates to attract customers to use their services."

Editor's note: An earlier version of this post included quotes from a source whose identity and credibility has recently been discredited. The post has been updated to remove her quotes.

Related Content Module: More Savings Coverage

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Pfizer leaps 6% after releasing positive trial results for coronavirus vaccine

Wed, 07/01/2020 - 11:17am  |  Clusterstock

  • Pfizer shares soared as much as 6% on Wednesday after the company announced positive early-stage trial results for its coronavirus vaccine.
  • The BNT162b1 drug successfully created antibodies in all participants receiving 10, 30, or 100 microgram doses.
  • Those taking two of the 10 or 30 microgram doses created between 1.8 and 2.8 times the antibodies seen in recovered COVID-19 patients, Pfizer said in a statement.
  • The pharmaceutical giant is one of several firms racing to introduce the first effective coronavirus vaccine, with Moderna, Gilead, and Novavax also conducting drug trials.
  • Watch Pfizer trade live here.

Pfizer shares leaped as much as 6% on Wednesday after the company revealed positive early-stage trial results for its coronavirus vaccine.

Pfizer's human trial involved 45 participants aged 18 to 55 receiving either 10, 30, or 100 microgram doses of the BNT162b1 vaccine or a placebo over a 21 day period. The compound successfully created antibodies for combatting the coronavirus in all participants receiving two of the 10 or 30 microgram doses, according to a Wednesday release.

Pfizer said patients created between 1.8 and 2.8 times the antibodies seen in those who have recovered from COVID-19. Those who received a single 100 microgram dosage created fewer antibodies, Pfizer said.

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

"We are encouraged by the clinical data of BNT162b1, one of four mRNA constructs we are evaluating clinically, and for which we have positive, preliminary, topline findings," Kathrin Jansen, head of vaccine research and development at Pfizer, said in a statement. "We are dedicated to develop potentially groundbreaking vaccines and medicines, and in the face of this global health crisis, we approach this goal with the utmost urgency."

The pharmaceutical giant's potential vaccine is one of the most closely watched candidates in the sector. Several other firms including Moderna, Gilead, and Novavax are locked in the race to introduce the first effective compound for combating the coronavirus pandemic. Markets have repeatedly swung higher on positive trial news as investors grow more hopeful for a near-term cure.

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

Pfizer is working alongside German firm BioNTech to develop its coronavirus vaccine. The treatment remains under development and is not yet approved for distribution. Should it be approved, Pfizer aims to produce up to 100 million doses by the end of the year and potentially more than 1.2 billion doses through 2021.

Pfizer stock traded at $33.88 as of 10 a.m. ET, down 13% year-to-date.

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Tesla overtakes Toyota to become most valuable automaker in the world (TSLA, TM)

Wed, 07/01/2020 - 11:09am  |  Clusterstock

  • Tesla has surpassed Toyota to become the most valuable auto manufacturer in the world on Wednesday.
  • Tesla jumped as much as 4% to a market capitalization of $206 billion, while Toyota fell as much as 1% to a market capitalization of $203 billion.
  • The Tesla takeover of the car industry highlights investors' shift to rewarding technology-focused auto manufacturers that develop electric-powered vehicles and focus on software development.
  • Visit Business Insider's homepage for more stories

Tesla has soared past Toyota in market capitalization to become the most valuable auto manufacturer in the world on Wednesday.

Tesla jumped as much as 4% to a market capitalization of $206 billion, while Toyota fell as much as 1% to a market capitalization of $203 billion.

Investors have bid up shares of Tesla as much as 12% over the past two trading sessions in anticipation of the company's second quarter delivery results. On Monday, Elon Musk sent an email to employees, cheering them on to finish the quarter strong in hopes of breaking even for the period.

Read more: GOLDMAN SACHS: Buy these 15 super-cheap stocks now before their prices catch up to their strong growth and earnings prospects

If Tesla manages to turn a profit in the second quarter, it will become eligible to be added to the S&P 500 index, which would create immense demand for its stock as passive funds and ETFs tied to the index would be forced to buy Tesla shares.

Tesla is up 170% year-to-date. The company's meteoric rise has led investors to pile into smaller electric-vehicle manufacturers like Nikola Motors and Workhorse, which owns a 10% stake in Lordstown Motors.

The Tesla takeover of the car industry highlights investors' shift to rewarding technology-focused auto manufacturers that develop electric-powered vehicles and software.

Read more: Stock analysts are having a moment in the sun as the market gets flipped upside down. We spoke to 11 of the top-ranked on Wall Street to get their forecasts and single-stock picks.

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Dow caps off best quarter since 1987 as strong economic data drives gains

Tue, 06/30/2020 - 4:18pm  |  Clusterstock

  • US stocks rose on Tuesday as better-than-expected economic data outweighed mounting concerns about surging COVID-19 cases.
  • The Dow Jones industrial average's 18% gain in the three-month period from April to June marked the index's best quarterly return since 1987.
  • US consumer confidence jumped in June by the most since 2011, exceeding economists' forecasts.
  • Coronavirus cases continue to climb in multiple US states, leading to new restrictions and rollbacks of reopening phases.
  • Read more on Business Insider.

US stocks rose on Tuesday as better-than-expected economic data outweighed mounting concerns about a surge in COVID-19 cases.

The Dow Jones industrial average's 18% gain in the three-month period from April to June marked the index's best quarterly return since 1987. Meanwhile, the S&P 500 saw its best gain since 1998 during the period, while the Nasdaq capped off its best quarter since 2001.

Equities got a lift from data showing that US consumer confidence jumped in June by the most since 2011, exceeding economists' forecasts.

Here's where US indexes stood at the 4 p.m. ET market close on Tuesday:

Read more: BANK OF AMERICA: Buy these 8 retail stocks as they rake in revenues from an unprecedented surge in home-improvement spending

Still, investors are keeping an eye on increases in COVID-19 cases that could slow the economic recovery. Texas, California, Florida, and Arizona have rolled back reopening plans and imposed new restrictions.

Shares of Uber rose on reports that it was considering purchasing Postmates for about $2.6 billion. Tesla surged to an all-time high after CEO Elon Musk said in an email to employees on Monday night that "breaking even is looking super tight" for the second quarter.

Read more: Goldman Sachs has formulated a strategy that could triple the market's return within a year as volatility remains higher than normal — including 11 new stock picks for the months ahead

Wells Fargo declined after saying it would likely slash its dividend in the third quarter to comply with the Federal Reserve's stress test. Bank of America, Citigroup, Goldman Sachs, and JPMorgan said their dividends would remain the same.

Shares of Boeing slumped after Norwegian Air Shuttle canceled a deal for its jets. Inovio Pharmaceuticals slipped more than 12% following a report that the company hadn't provided data needed to determine whether its coronavirus vaccine candidate was working.

Fed Chairman Jerome Powell and Treasury Secretary Steve Mnuchin testified before the House Financial Services Committee on Tuesday afternoon. In prepared remarks released on Monday, Powell warned that failing to contain the virus could be a problem for the economy going forward.

Read more: JPMorgan breaks down how COVID-19 nearly destroyed one of the market's safest trades — and lays out 3 lessons to help investors tackle future crises

In global news, Chinese President Xi Jinping signed a national-security law for Hong Kong that's set to go into effect on Tuesday. The law could spark tensions between the US and China and threaten Hong Kong's standing as a financial hub.

Still, China's economy has shown signs of a rebound from the coronavirus pandemic. The country's purchasing managers' index climbed to a three-month high in June, surpassing economists' estimates.

Oil prices slid. West Texas Intermediate crude as much as 2.1%, to $38.85 per barrel. Brent crude, oil's international benchmark, fell 1.9%, to $40.90 per barrel, at intraday lows.

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Meet the non-profit program helping young people from underserved communities land tech jobs at places like Bank of America

Tue, 06/30/2020 - 3:45pm  |  Clusterstock

  • NPower is a non-profit organization that trains military veterans and young adults in underserved communities for careers in technology. 
  • The program is based across eight different regions in the US and Canada and serves 1,400 students annual via a 16-week classroom program and a paid internship. 
  • David Reilly, who leads global banking and markets, enterprise risk and finance technology
    and core technology infrastructure at Bank of America, serves as board chair for NPower. Reilly did not attend college. 
  • Reilly said the program serves as a great way for organizations to fill entry-level technology positions, which continue to grow, from a pool of talent that is diverse.
  • Sign up here for our Wall Street Insider newsletter.

Carolina Ferreira doesn't fit the traditional profile of a Wall Street employee.

Having left high school at 17 and with no college education, Ferreira's initial understanding of white-collar jobs came mostly from television shows like Suits. It wasn't that Ferreira had a tough time believing she'd ever work in finance. It wasn't even a consideration.

"I never had any exposure to the corporate world. Not even like by third-hand by my parents or family members," said Ferreira, who parents immigrated from the Dominican Republic. "It was just nothing I've ever seen. So just nothing I could ever imagine for myself."

And yet, Ferreira did just that. After going back to high school at 20 to get her diploma, Ferreira enrolled in NPower, a non-profit that trains military veterans and young adults from underserved communities for careers in tech. Through NPower, Ferreira landed an internship at Bank of America in 2017 working as a technical support analyst for the bank's FICC trading floor.

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It was quite the introduction to finance for Ferreira, who was tasked with ensuring the information flow between salespeople and traders on complex transactions was seamless.

"It was insanely overwhelming," said Ferreira of her first day on the job. "I had nervous sweats for half the day."

Nerves aside, Ferreira excelled, and enjoyed, her new role. She was offered work as a contractor after her internship ended, and then eventually a full-time position working with the commodity trading floor.

Ferreira's experience is just one of the many success stories to come out of NPower.

Founded in 1999, NPower runs programs out of eight regions in the US and Canada, serving roughly 1,400 students annually, Bertina Ceccarelli, CEO of NPower, told Business Insider. Students receive 16 weeks of classroom instruction across a variety of tech topics and also participate in a paid internship that runs a minimum of seven weeks. The majority of students have no formal training in technology beforehand, and most either have little or no college education. 

NPower says after completion of the program, which is free, about 80% of graduates either continue their education or get jobs. 

"Our mission, I like to say at the highest level, really is to move people from poverty to the middle class," Ceccarelli said. 

Read more: Bank of America's summer internship will be entirely virtual. A talent exec runs through how the bank's 2,000 global interns will learn, network, and volunteer without stepping into an office.

A Bank of America executive has ties to NPower 

While NPower works with a variety of industries — placing grads at consulting, pharmaceutical, and consumer packaged goods companies — financial services remains one of its biggest participants, Ceccarelli said. 

Bank of America, in particular, has been a strong supporter of the organization, hiring 63 students out of NPower's New York program, with employees also volunteering over 4,600 hours of their time through activities such as guest lectures. 

The executive leading those efforts is David Reilly, who leads global banking and markets, enterprise risk and finance technology and core technology infrastructure at Bank of America and serves as board chair for NPower.

Reilly has a non-traditional background himself, having not attended college. As a result, he told Business Insider, he always looks to give back to those who find themselves in similar situations as he did all those years ago.

And that work has paid off, Reilly said, who estimated some of the best people he's hired have been those with the right attitude and curiosity, as opposed to a laundry list of degrees from prestigious universities.

"What I've found you get back in return is an incredible amount of loyalty and drive and that these people will run through walls for you. And then they will go on to have astonishing careers," Reilly said. 

"They need someone to give them a chance, to give them an opportunity. And my experience has been if you do that, the balance of trade is way in the corporations favor. And what you get back in return, it's just astonishing," he added. 

NPower can also serve to fill gaps around data science and diversity

To be sure, there are commercial benefits to the program as well. Reilly said as companies rely more heavily on tech, there is a greater need to fill entry-level roles that require IT skills. He cited one estimate that suggests there will be 3.5 million unfilled technology jobs by 2021. 

In particular, Reilly said data science will be the biggest need. While things like cyber and basic coding skills are all important, experience handling data will be in the highest demand. 

"The resource that everybody is now grappling with is that of data. You speak to anybody at any large corporation they'll tell you, 'I don't lack for data. I lack for insight. If only I could draw more insight from the data that I've got, I could serve my clients better," Reilly said. 

However, that's not to say graduates from prestigious universities will no longer be sought after by Wall Street firms. While tech, compared to investment banking or trading, has more flexibility to recruit outside of so-called target schools, those who attend the most exclusive colleges being offered the best opportunities in finance is a trend that's not likely to end anytime soon.

NPower also provides an opportunity for companies to tap into a more diverse talent pool from underserved backgrounds, a consideration nearly all of corporate America has reevaluated more seriously in recent weeks. 

Reilly said Bank of America will continue to work hard to provide entry-level opportunities via the program. As for NPower, he said the organization will look to be more public about how it can help companies in need technical talent from more diverse backgrounds. 

"You win whichever way you cut it. You get access to terrific talent. You get to help kids that really need it. You get to do right by a community in which you operate and which you serve. And you get talent in your organization with a level of drive, commitment, loyalty, energy and determination that you just can't teach," he said. 

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US companies tumble into bankruptcy at fastest pace since 2013 under coronavirus stress

Tue, 06/30/2020 - 3:30pm  |  Clusterstock

  • US companies are filing for Chapter 11 bankruptcy at the fastest pace since 2013, the Financial Times reported Tuesday.
  • Year-to-date filings reached 3,427 on June 24, bringing the metric close to the 3,491 filings made in the first half of 2008.
  • The wave of bankruptcies was largely driven by the coronavirus pandemic and its disruption to global supply chains, consumer spending, and manufacturing activity.
  • Firms across a range of industries have entered insolvency, from car-rental chain Hertz to circus company Cirque du Soleil.
  • Visit the Business Insider homepage for more stories.

The coronavirus' economic fallout is fueling Chapter 11 bankruptcy filings at the fastest pace since 2013, the Financial Times reported Tuesday.

US filings totaled 3,427 on June 24, according to data from Epiq seen by the Times. The reading also closes in on the financial-crisis reading of 3,491 companies entering bankruptcy in the first half of 2008.

Chapter 11 bankruptcy is among the most popular options for businesses to restructure in the midst of insolvency. Some of the biggest names to file in 2020 include Hertz, JC Penney, J Crew, and Chesapeake Energy. Circus company Cirque du Soleil is one of the latest to join the pack after filing for bankruptcy on Monday.

Read more: JPMorgan breaks down how COVID-19 nearly destroyed one of the market's safest trades — and lays out 3 lessons to help investors tackle future crises

The coronavirus pandemic attacked corporate income on all fronts through the start of the year. The outbreak initially tore into global supply chains and firms with exposure to China as the country issued strict lockdowns. As the virus spread across the rest of the world, quarantine orders stifled consumer spending and manufacturing activity. Companies were forced into months of frozen revenue streams.

Companies are still a ways away from repeating the bankruptcy trend seen during the last US recession. A total of 8,614 firms filed for bankruptcy protection in 2008 before an additional 12,644 companies filed the following year, according to the Times. Still, rising coronavirus case counts could prolong shutdowns and boost insolvency across industries.

The wave of bankruptcies isn't deterring companies from issuing debt to ride out the pandemic. Investment-grade bond sales surged past the $1 trillion threshold at the fastest pace in history in late May as companies rushed to take advantage of strong risk-on activity. The Federal Reserve's move into corporate debt markets prompted an influx of investors looking to buy companies' bonds. The same threshold wasn't breached until November in 2019.

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Tesla jumps 8% to record high after Elon Musk email shows optimism around a profitable 2nd quarter (TSLA)

Tue, 06/30/2020 - 3:11pm  |  Clusterstock

Shares of Tesla jumped as much as 8% to an all-time intraday high of $1,087.50 Tuesday after a leaked email from CEO Elon Musk showed optimism that the company could break even in the second quarter. 

"Breaking even is looking super tight. Really makes a difference for every car you build and deliver. Please go all out to ensure victory!" Musk wrote in a Monday email to employees. The email was first reported by Electrek.

Tesla is expected to report its second quarter vehicle deliveries sometime this week, ahead of the Fourth of July weekend. 

Read more: We spoke with 3 financial experts, who said to make 4 these trades right now to get ahead of surprising gains when earnings season starts next month

Tesla's stock price has been on a searing rally this year, hitting multiple all-time highs. On Tuesday, its market capitalization reached roughly $201 billion, putting it closer than ever to the $214 billion market value of Toyota, the highest-valued automaker in the world.

In the first quarter of the year, Tesla reported stronger-than-expected vehicle deliveries and a surprise profit even though it dealt with factory closures in China due to the coronavirus pandemic. Since, its US factory was also shuttered in April due to a local shelter-in-place order.

Tesla resumed production at the US factory in May, defying the local shelter-in-place orders. 

Tesla has gained roughly 157% year-to-date

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Workhorse extends June rally to 706% after securing $70 million in new financing (WKHS)

Tue, 06/30/2020 - 2:17pm  |  Clusterstock

  • Workhorse surged as much as 38% on Tuesday after the company secured $70 million in new financing. 
  • The jump extended the electric vehicle maker's June rally to as much as 706%. 
  • Workhorse was added to the Russell 3000 index on Monday and is part of a group of publicly traded electric vehicle companies that have seen a surge in trader interest as investors try to find the next Tesla.
  • The number of Robinhood account owners that own Workhorse surged 436% in June to 116,000.
  • Visit the Business Insider homepage for more stories.

Workhorse extended its June rally to 706% and surged as much as 38% on Tuesday after the electric vehicle developer said it secured $70 million in new financing. 

This follows Monday's 56% surge after the company announced it would be added to the Russell 3000 index.

Workhorse said it entered into a financing agreement for a $70 million senior secured convertible note with a single institutional investor. According to the company, the proceeds will strengthen its balance sheet and enable it to accelerate production of its vehicles.

CEO Duane Hughes said, "Heading into the second half of the year, we'll be looking to meet our previously stated annual delivery target, which should have us in a strong position to accelerate our production ramp into 2021."

Workhorse develops electric delivery vans that are targeting delivery companies like UPSFedEx, and DHL. The company also operates an aviation unit that makes delivery drones. Previously, the company developed an electric pickup truck but abandoned that project after it proved too costly for the company to develop.

In 2019, Workhorse licensed its electric pickup truck technology to its former CEO, Steve Burns. Burns formed Lordstown Motors and acquired an auto manufacturing facility from General Motors in Lordstown, Ohio.

Workhorse retains a 10% equity stake in Lordstown Motors and is set to receive a royalty fee for every Lordstown Endurance pickup truck that is sold. 

The investor hype surrounding electric vehicles has been inspired by Tesla's meteoric rise past $1,000, and spilled over to Nikola Motors, which began accepting a $5,000 reservation for its Badger electric pickup truck today. Investor hype was so strong that Nikola shares doubled in a single day after it went public via a reverse merger earlier this month.

Workhorse has seen its market capitalization skyrocket from $185 million at the start of June to $1.26 billion today, according to data from YCharts.com. 

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SIGN UP NOW: Lessons in pitching investors from Domm Holland, CEO of one-click checkout startup Fast, who raised $20 million from Index Ventures and Stripe to take on Apple Pay

Tue, 06/30/2020 - 1:29pm  |  Clusterstock

In May, one-click checkout startup Fast raised its $20 million Series A from investors including Index Ventures and buzzy fintech Stripe.

The company is trying to take on Apple Pay to solve pain-points around password management and online checkout.

Join Business Insider on Tuesday, July 14 at 1:30 p.m where BI payments reporter Shannen Balogh will speak with Domm Holland, Fast's co-founder and CEO, and Jan Hammer, general partner at Index Ventures.

They'll discuss how Holland came up with the idea for Fast, how to build a pitch deck, and what it takes to win over investors.

If you're a Business Insider subscriber, you can sign up here.

 

 

SEE ALSO: One-click checkout startup Fast used this pitch deck to nab $20 million from investors like fintech giant Stripe. Here's a look at its vision for taking on Apple Pay.

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