(Bloomberg) — AMC Entertainment Holdings Inc. gained Tuesday, extending last week’s rally, after raising $230.5 million with a stock sale to Mudrick Capital Management as the movie-theater operator pledged to “go on offense” with acquisitions. The agreement with New York-based Mudrick is for 8.5 million shares of common stock at $27.12 apiece, 3.8% more than Friday’s closing price, AMC said Tuesday. With AMC shares now above Mudrick’s purchase price, the sale “sounds expensive” as current debt and equity indicate an enterprise value of more than $16 billion, Michael Pachter of Wedbush Securities said in an email to Bloomberg. If it returns to pre-Covid levels, AMC could optimistically reach around $1 billion in earnings after adjustments — which is above the $929 million the company attained in 2018. Pachter said. “Mudrick must know something I don’t.” AMC plans to use the cash proceeds from the sale for acquisitions of additional theater leases, as well as investments into AMC’s existing theaters, the company said in a statement. It is in discussions with multiple landlords of theaters formerly operated by Arclight Cinemas and Pacific Theatres, Chief Executive Officer Adam Aron said. “We still don’t know exactly what” AMC is buying, “but whatever they acquire is likely to come with additional lease expense and will not be large enough to materially alter our view of the company’s cash flow and leverage profile,” S&P Global Ratings analyst Scott Zari said in response to questions from Bloomberg. “I would be be surprised if Mudrick was buying at a premium now, expecting the shares to go up,” Matt Zloto co-head of U.S. high-yield research at CreditSights said in an interview. “It’s more likely the firm already sold or is selling the shares,” consistent with where equity has been trading, he said. Mudrick’s stock purchase comes with the caveat that the shares be “freely-tradeable”, meaning the firm could sell the shares at any point or in any size it chooses. That would provide Mudrick with 8.5 million shares that could be sold as soon as today. The investment advisor firm has made big bets on AMC in the past, helping the movie theater chain as it pushed through the pandemic. In January, the firm entered into an agreement to buy $100 million of new secured bonds in exchange for a commitment fee equal to about 8 million AMC shares. The agreement also called for Mudrick to exchange $100 million of AMC bonds due 2026 for about 13.7 million shares. Mudrick has benefitted from its ongoing relationship with AMC, working with management on previous deals which have been “a positive for both” AMC and the firm, a “win win,” Zloto said. This sale is the latest of several equity financings conducted by AMC during its meteoric rise this year. It follows the completion of an at-the-market offering in May and a bankruptcy-avoiding financing in January. Tuesday’s deal represents just 1.7% of AMC’s public float as of May 13, according to data compiled by Bloomberg. Nick Note: as usual another Wall Street sleaze deal. The bet here is That after the initial hurrah people will be going back to theaters in mass. I have pronounced the death of the movie theater for over 30 years… and have been wrong. Why people go to those places is beyond me… So we shall see what we see.
Fed far from goals, but seeing progress – Brainard
WASHINGTON, June 1 (Reuters) – The United States is making progress towards the Fed’s maximum employment and 2% inflation goals, but the depth of the remaining problem still requires the central bank not jump the gun in starting to tighten monetary policy, Fed Governor Lael Brainard said on Tuesday. “While we are far from our goals today, we are seeing welcome progress, and I expect to see further progress,” Brainard said in remarks prepared for delivery to the Economic Club of New York. But “jobs are down by between 8 and 10 million compared with the level we would have seen in the absence of the pandemic. And it will be important to see sustained progress on inflation,” not just a temporary jump. Some of the factors fueling current strong growth, including fiscal spending and the rush by households to take advantage of a broader economic reopening, are likely to fade over time, Brainard noted, another reason the Fed should not pull back too soon. “Remaining steady in our outcomes-based approach during the transitory reopening surge will help ensure the economic momentum that will be needed,” to make sure inflation hits and stays at the Fed’s target, and people have as much time as possible to restart their old jobs or find new ones, she said. The Fed is approaching a critical few months as it tries to read an economy progressing through the unparalleled moment of restarting after a pandemic. What are difficult judgments in normal times — assessing the path of inflation or assessing what employment metrics are most meaningful — have become even more complex in an environment where consumption and work patterns have been upended, and may have been changed permanently by the historic health crisis. How those questions are resolved will determine when the Fed begins to reduce its $120 billion in monthly bond purchases, and then eventually raises interest rates from the current near zero level. The Fed appears to be edging towards the start of that discussion. A key bit of information will come on Friday when new employment data will show whether hiring picked up in May after a weaker-than-expected April. Another poor outcome won’t necessarily dim faith in the recovery, only emphasize how hard it is to restart a $20 trillion economy. Brainard has been among the stronger voices arguing to wait on any policy change to be sure the recovery won’t slip, but herself made a revision in her language on Tuesday. While saying policy should remain steady, she did not repeat her call for the Fed to be “patient” before making any changes, a word often used to push policy debates far down the road. The fact that prices are currently being driven higher by things like unexpected computer chip shortages and a rush by consumers to buy used cars is all the more reason to wait — as is the uncertainty over why people seem hesitant to take jobs. Some of that data “noise” will ease by the fall, Brainard said. While she said she would be “attentive” to signs of higher inflation, she cautioned also against “preemptive tightening” that could deprive people of jobs. Nick Note: It is obvious that crawling out from under a great plague induced depression is a new event for the markets. Events are moving to fast for most people. They fail to grasp how great a gift the vaccines really are. And how well they are working. the market confusion and misinterpretation of the data is a trading gift for us.
India’s COVID cases plummet after hydroxychloroquine, ivermectin use
On May 17, the New York Times reported that the coronavirus crisis was so severe in India, with about 23 million infections confirmed, that the country was accounting for more than half of the world’s daily COVID-19 cases. The same day, The Gateway Pundit posted a story suggesting that two drugs — both of which have drawn warnings from U.S. and global public health officials not to be used for COVID-19 — were having dramatic effects in India. The headline, widely shared on Facebook, read: “Elites Worried: COVID Cases in India Plummet After Government Promotes Ivermectin and Hydroxychloroquine Use.” Daily COVID-19 cases in India decreased in the days before May 17 — but only after a nearly vertical rise that started in April and peaked May 8. The Indian government has recommended limited use of the two drugs for COVID-19, but there is no evidence that their use led to the drop in cases. Neither drug is approved in the U.S. for COVID-19. And both the U.S. Food and Drug Administration and the World Health Organization recommend against using them to prevent or treat COVID-19 infection. The Gateway Pundit article links to another article that links to revised guidelines issued April 28 by India’s Ministry of Health & Family Welfare. The guidelines, for “home isolation of mild/asymptomatic COVID-19 cases,” recommends considering ivermectin as treatment for those patients, and says people in close contact with those patients should take hydroxychloroquine as a prevention “as per protocol and as prescribed by the treating medical officer.” Confirmed new COVID-19 cases in India declined in the days before the article was posted, based on a seven-day rolling average — but only after reaching a peak following a sharp increase that started in April. Many experts caution that the Indian government’s official tallies of confirmed cases likely vastly underestimate the actual infection figures because testing remains limited and the volume of cases has crippled the health care system in some areas. So the actual extent of the decline is not clear. Hydroxychloroquine and ivermectin are being widely used in India for COVID-19, according to news reports. But there is no evidence they led to the recent decline in confirmed cases, given the lack of clear scientific evidence that they are effective at all in prevention or treatment. The government’s new guidelines don’t give a rationale for the recommendations. They were issued several days after a research paper was published that said “results from numerous controlled prophylaxis trials,” including some done in India, “report significantly reduced risks of contracting COVID-19 with the regular use of ivermectin.” Doctors in India admitted to have prescribed the drug under compulsion, peer pressure or on patient’s demand, according to one news report . The health minister in Goa was quoted as saying ivermectin does not prevent a COVID-19 infection, but helps in reducing the severity of the disease. Hydroxychloroquine has been in use much longer. In June 2020, a task force of India’s health ministry recommended that frontline health care workers take it to prevent COVID-19 infection. According to the journal Nature, the task force cited three new studies conducted by government agencies, only one of which had been published, that the task force said showed it can prevent infection.
The Gateway Pundit claimed: “COVID cases in India plummet after government promotes ivermectin and hydroxychloroquine use.”
COVID-19 cases in India dropped in mid-May only after a nearly vertical spike in cases over the previous several weeks. The Indian government has given limited recommendations for using the two drugs in connection with mild COVID-19 cases. Nick Note: we racked up two more deaths this weekend. Ivan a life long friend who scoffed at the mask and medicines i sent him and a strict antivaccier. Anna’s best friends mother another anit mask antivacccier dies. Leaving behind 5 young kids. It was so bad up till the time of her death she insisted she had a bad cold. In both cases test were conclusive… the covid got them….. Why me god. What can i do if they will not listen……
U.S. says ransomware attack on meatpacker JBS likely from Russia
MELBOURNE (Reuters) – Australian and North American units of the world’s largest meat works were hit over the weekend by an organised cyber attack on its information systems, Brazil’s JBS SA said in a statement.
The attack caused its Australian operations to shut down on Monday. The company said it was working to resolve the incident.
“On Sunday, May 30, JBS USA determined that it was the target of an organised cybersecurity attack, affecting some of the servers supporting its North American and Australian IT systems,” it said in a statement released Monday afternoon, U.S. time.
“Resolution of the incident will take time, which may delay certain transactions with customers and suppliers.”
The attack shut down operations across several Australian states, JBS Australia Chief Executive Officer Brent Eastwood told industry news website Beefcentral on Sunday, at which time he was not able to say how long the stoppage would last.
The world’s largest meatpacker has operations in Canada and the United States, which on Monday marked the U.S. Memorial Day public holiday.
Australian meat processing operations would be impossible without normal access to IT and internet systems, according to the Beefcentral report. JBS’s Primo Smallgoods business in Queensland state has also been affected, the report said.
(Reporting by Melanie Burton; Editing by Kirsten Donovan and Richard Pullin)
OPEC confirms decision to increase oil output by 2M bpd
The OPEC group of oil-producing countries and its allies agreed Tuesday to maintain planned production increases, as pandemic-hit demand for crude recovers.
The 23-nation OPEC+ alliance implemented sharp output cuts to support prices after the coronavirus pandemic crushed the global economy last year.
But since early May the cartel has started implementing more generous production increases as oil prices have recovered and the health situation improves in developed economies.
At the end of a short meeting on Tuesday which lasted barely half an hour, the group agreed to continue rises up until July adding up to 1.2 million barrels per day (bpd), to which will be added a further million bpd which had been voluntarily withdrawn by Saudi Arabia.
However, the alliance took no decision on what policy to follow from August onwards, and did not discuss the possibility of Iranian oil returning to the market in the coming months.
Among OPEC’s allies, Russia has in recent times pushed for faster rises in output with traditional OPEC kingpin Saudi Arabia supporting a much more cautious approach.
However, ahead of Tuesday’s meeting even Saudi Energy Minister Prince Abdulaziz bin Salman pointed out that though there were “still clouds on the horizon”, “demand has improved in some of the world’s bigger markets, like the USA and China” and praised the global vaccine rollout.
– ‘What the market needs’ –
For his part Russian Deputy Prime Minister Alexander Novak said: “We see that demand has increased, that prices have stabilised,” and spoke of a “normalisation” of the global economy.
OPEC has remained optimistic in its predictions for 2021, expecting demand to reach 96.5 million bpd, an increase of six million on 2020 levels.
Ann-Louise Hittle, vice president Macro Oils, at Wood Mackenzie, said of Tuesday’s decision: “The outcome is one we expected”.
“Sticking to increases planned… is what the market needs,” said Hittle, adding: “Demand growth is outpacing supply gains even with the agreed month-by-month OPEC+ production increases taken into account.”
This has been reflected in recent movements in crude prices.
World oil prices continued their recent upward trend on news of the OPEC+ decision, with the European Brent and US WTI benchmark contracts rising by around two percent at 1600 GMT on Tuesday, with WTI reaching levels unseen since October 2018.
– Iranian enigma –
Aside from demand, the other factor OPEC and its allies must take into account are the actions of other oil-rich states such as the world’s leading producer, the United States.
Changes are also underfoot among the alliance’s members themselves.
After facilities in war-torn Libya began producing again from the end of 2020, eventually adding one million bpd to the market, all eyes will be on Iran.
If negotiations in Vienna on the full revival of the 2015 nuclear deal are successful, it could lead to many economic sanctions on the Islamic republic being lifted, including the US embargo on Iranian oil exports.
If Iran were able to get back to its level of exports three years ago — when then US president Donald Trump withdrew from the nuclear deal and reimposed sanctions — it could mean an extra 1.5 million bpd coming to the market.
“We anticipate that Iran’s production levels will be a contentious topic at future meetings,” said Samuel Burman from Capital Economics.
Iranian Oil Minister Bijan Namdar Zanganeh on Monday told his ministry’s Shana news agency that the country’s “priority” would be to nearly triple its current output level.
ISM: US Manufacturing PMI at 61.2% in May
The survey’s forward-looking new orders sub-index jumped to 67.0 from a reading of 64.3 in April. Inventories at factories are barely growing and business warehouses are almost bare.
But production is being constrained by worker shortages. A measure of factory employment dropped to a six-month low in May. Labor is scarce despite nearly 10 million Americans being officially unemployed. Generous unemployment benefits funded by the government, problems with child care and fears of contracting the virus, even with vaccines widely accessible, as well as pandemic-related retirements have been blamed for keeping workers home. Lack of workers and shortages of raw materials such as semiconductors used in the production of motor vehicles and electronic goods led to a further increase in backlogs of uncompleted work. The shortages are also keeping input prices elevated. The ISM survey’s measure of prices paid by manufacturers hovered near levels last seen in July 2008, when the economy was in the throes of the Great Recession. The higher prices are fanning inflation pressures. The government reported on Friday that a measure of underlying inflation tracked by the Federal Reserve for its 2% target accelerated 3.1% on a year-on-year basis in April, the biggest increase since July 1992. Most economists and Fed Chair Jerome Powell maintain that higher inflation will be transitory. The slowdown in hiring at factories last month could temper expectations for an acceleration in job growth in May after nonfarm payrolls increased by only 266,000 in April. Nick Note: this report is very consistent of what we would expect to see in a reflation…… Their is about to be a great big party
Dow jumps over 150 pts premarket after break
Shares on Wall Street pushed higher during the premarket session on Tuesday following the three-day Memorial Day break with the Dow Jones Industrial Average climbing over 150 points. Traders were awaiting manufacturing PMI releases on the first trading day of the month, as well as construction spending figures. Crude prices rallied ahead of the OPEC+ meeting in Vienna while Treasury yields jumped. The Dow Jones was up 152 points at 4:45 am ET. At the same time, the S&P 500 and the Nasdaq 100 rose 0.34% and 0.26% respectively. The euro was up 0.03% against the dollar at 4:55 am ET, buying 1.22293. Nick Note: The party begins
Brent rises to near $70 on demand prospects and ahead of OPEC+ meet
SINGAPORE (Reuters) – Oil prices rose on Tuesday ahead of an OPEC+ meeting and on optimism that fuel demand will grow in the months ahead with the summer driving season starting in the United States, the world’s top oil consumer. Brent crude futures for August gained 56 cents, or 0.8%, to $69.88 a barrel by 0125 GMT. U.S. West Texas Intermediate crude for July was at $67.33 a barrel, up $1.01, or 1.5% from Friday’s close, with no settlement price for Monday due to a U.S. public holiday. “While there are concerns over tighter COVID-19 related restrictions across parts of Asia, the market appears to be more focused on the positive demand story from the U.S. and parts of Europe,” analysts from ING Economics said in a note on Tuesday. “In the U.S., the summer driving season officially got underway following the Memorial Day weekend, and we have entered this period with gasoline inventories already trending lower, and not too far from a 5-year low for this time of the year.” Tracking firm GasBuddy said Sunday’s U.S. gasoline demand jumped 9.6% above the average of the previous four Sundays, the highest Sunday demand since summer 2019. Still, price gains were capped as more output is expected to hit the market. The Organization of the Petroleum Exporting Countries and allies – known as OPEC+ – is likely to stick to the existing pace of gradually easing oil supply curbs at a meeting on Tuesday, OPEC sources said, as producers balance expectations of a recovery in demand against a possible increase in Iranian supply. OPEC+ decided in April to return 2.1 million barrels per day (bpd) of supply to the market from May to July, as it anticipated global demand would rise despite surging coronavirus cases in India, the world’s third-largest oil consumer. “We believe that the market will be able to absorb this additional supply, and so would expect the group to confirm that they will increase output as planned over the next 2 months,” ING Economics analysts added. Nick Note: Your grennie winnie president is anti oil…. See they want you to have a carbon free world. But their is a little problem… The technology and infrastructure does not exist. But to the Biden/harris idiots that does not matter. They are killing domestic oil. Forgetting America consumes vast amounts of oil. So domestic oil production has been gutted once again. No more pipelines, no more drilling on government land. Result… OPEC is having a party America is no longer self sufficient on oil. As a result $30 oil has become $70…… And our enemies are making a killing selling us oil. Great empires fail when they do stupid shit!
IAEA: Iran enriched uranium stockpile 16 times over limit
The UN nuclear watchdog says in a report that Iran’s stockpile of enriched uranium is around 16 times the limit laid down in the 2015 deal with world powers. The report by the International Atomic Energy Agency (IAEA) gives an estimate of the stockpile of 3,241 kilograms (7,145 pounds), but cautions that it is not able to verify the total. The limit laid down in the deal was 300 kilograms of uranium in a particular compound form, the equivalent of 202.8 kilograms of uranium.
Europe opens lower, LSE closed for bank holiday
Stock markets in France and Germany started the week with slight losses, while the London exchange was closed due to the Spring Bank Holiday. Over the weekend, German officials again called for the faster approval of Russia’s Sputnik V vaccine in the European Union, while a report claimed coronavirus-related restrictions in England will be lifted only partly on June 21. The DAX lost 0.14% at the opening bell, with Deutsche Bank dropping 1.04%. The CAC 40 stood flat. Both the euro and the pound remained unchanged against the dollar to trade for 1.21916 and 1.41804, respectively. It is a national holiday in the United States. It is also a state holiday in many states. United States stock markets will be closed on May 31, 2020 in honor of the Memorial Day holiday.