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Yahoo
16 minutes ago
- Yahoo
Bitcoin Bulls Should Be Wary of the Dollar Index's Death Cross: Technical Analysis
Bitcoin (BTC) bulls are optimistic that the U.S. dollar's broader sell-off will continue in the second half of the year, fueling the crypto bull run. However, one chart warrants caution when relying on bearish dollar predictions. That's the dollar index's weekly chart, which shows the 50-week simple moving average (SMA) is on track to cross below the 200-week SMA in the near term, forming the notorious death cross. While the ominous-sounding pattern is widely regarded as a long-term bearish signal, historically, it has proven to be a bear trap, consistently marking bottoms and bullish trend reversals in the US dollar. The chart below shows that DXY has chalked out four weekly chart death crosses since 2009, and each of those marked the end of downtrends (marked by vertical lines), setting the stage for sharp rallies. The last one occurred in January 2021, marking the bottom at around 90. The dollar caught the bid in the subsequent months, with the index eventually hitting a high of over 114.00 in September 2022. Note that price patterns do not always unfold as expected, meaning the impending death cross may not necessarily trap bears; however, being aware of its past tendency can help traders manage their positions more effectively. The dollar index, which tracks the greenback's value against major fiat currencies, tanked by 10.78% in the first half of the year, its worst performance since 1991.
Yahoo
19 minutes ago
- Yahoo
JPMorgan's Risky, 5-Day Dash to Help Warner Bros. Split in Two
(Bloomberg) -- The bankers from JPMorgan Chase & Co. knew the deal they were cooking up would face fierce opposition. Struggling Downtowns Are Looking to Lure New Crowds NYC Commutes Resume After Midtown Bus Terminal Crash Chaos California Exempts Building Projects From Environmental Law What Gothenburg Got Out of Congestion Pricing The plan could leave creditors of Warner Bros. Discovery Inc. with billions less than they were owed, despite the fact that the notes carried an investment grade rating that was supposed to indicate they were safe from this kind of 'haircut.' The goal was to help Warner Bros. split itself in two despite its massive debt load. To head off resistance, the bankers came up with a novel strategy to force an agreement. They would give creditors just five days to sign off and hoped the speed would make it harder to organize any significant opposition to the deal, according to people briefed on the planning who asked not to be identified because it was private. It wasn't clear any of this would work. It hadn't been done before. And for JPMorgan, there was an additional risk. The bank put up $17.5 billion to help pay off existing bondholders in what amounted to the largest bridge loan that JPMorgan — or any bank — had ever extended to a high yield borrower on its own. In an unusual move, JPMorgan funded the loan before lining up any permanent financing, meaning that it would be on the hook until new money came in, the people said. A representative for JPMorgan declined to comment for this story. The approach won backing within the bank because it would pave the way for a deal to split Warner Bros. Discovery into two companies, just years after JPMorgan helped orchestrate the $43 billion merger that created the current iteration of the entertainment conglomerate. The whole thing was important enough that executives including Jamie Dimon, the bank's chief executive officer, received updates on it. Dimon in turn spoke with David Zaslav, the CEO of Warner Bros. Discovery, the people said. For the lawyers and dealmakers involved, there was an added bonus. This had the potential to set a new precedent for how companies, particularly investment grade ones, could renegotiate their debt and overcome opposition from creditors. In addition to the rushed timing, the offer also included other new structural elements like an 'anti-boycott' provision that would make it harder for creditors to organize opposition to future debt incurred by Warner Bros., the people said. For creditors, though, it was a fresh reminder of the novel and aggressive tactics that have become far more commonplace in the world of debt, where lenders are constantly jockeying at the expense of each other. 'You remember this, you don't like it, but then you kind of assess it going forward,' Hunter Martin, a senior analyst at CreditSights, said of creditors. When the deal was first put forward, Martin had recommended that investors push back, though he also recognized that would be very difficult given the rushed time line. The European Leveraged Finance Association, a trade association representing credit investors, released a statement on Tuesday warning that the whole process 'was a worrying negative development' that was 'expressly designed to be coercive in nature,' and recommended that bondholders reject any similar deals. The Fallout The strategy, though, worked. Lawyers for the creditors tried, but failed to drum up opposition to the deal, according to people involved. In the end, more than half the bondholders agreed to the new terms, thus avoiding the greater losses they could have sustained if they didn't sign on. Many of the bonds were paid back at a similar or higher price than where they were trading when the deal was announced. 'The tender offer was designed to ensure a fair deal that benefitted both Warner Bros. Discovery and our bondholders, and we are pleased that more than 90% of bondholders saw the value in the transaction and elected to participate,' Fraser Woodford, the company's executive vice president of Treasury, Investments, and Real Estate said. On Monday, Warner Bros. used the bridge loan from JPMorgan to eliminate $3.2 billion of the company's $35.5 billion in outstanding debt, with many investors getting less than the face value of their notes. The company will seek to issue new bonds in the next six to nine months to replace the loan, people familiar with the matter said. For JPMorgan, it is a vindication of a recent effort to compete with the smaller boutique advisory firms that have traditionally won most of the mandates advising companies looking to restructure their debt. The bank has argued that its 'fortress balance sheet' allows it to backstop deals in a way that is not possible with boutique advisors. To some degree, the bank and Warner Bros. have turned the tables on creditors who have become used to wielding their influence and understanding of borrowing documents to gain advantages in the debt negotiations known as liability management exercises — a tactic that has rarely, if ever, been used in the investment grade bond markets before this. Warner Bros., though, could ultimately pay for the wheeling and dealing, investors said. In order to settle the bridge loan, the new companies will have to tap the bond market not long after leaving current bondholders unhappy. And now, Warner Bros. carries a junk rating on its debt. But the restructuring will allow Zaslav to divide his conglomerate into two parts, one with its faster growing assets, including the movie studios and streaming video services, and another with its struggling cable television channels, such as CNN, TBS, and the Cartoon Network. The structure is still being finalized, but Warner Bros. is considering keeping most of the remaining debt, roughly $25 billion, with the television-focused company referred to as Global Networks, people familiar with the matter said. The other company, known as Streaming & Studios will not have as much debt, giving it more room to grow. Global Networks will also take a 19.9% stake in the streaming company and is required to use any proceeds from that to pay down its debt. The company's stock has risen steadily over the past month, even as the value of its outstanding debt has fallen. The worst performing notes, maturing in 2042, are currently trading at 59 cents on the dollar, according to data from the pricing firm Trace. Failed Merger Since the 2022 mega-merger of Discovery Inc. and the WarnerMedia unit of AT&T Inc., streaming video and online entertainment have continued to eat away at the reliable returns that cable television channels once provided. The combined behemoth has lost money every year since its creation. JPMorgan has been consulting with the company about potential ways to handle its debt load over the past year but it began putting together the current deal in May in partnership with the company's other advisor, Evercore Inc. and the law firm Kirkland & Ellis, people familiar with the deal said. Representatives for Evercore and Kirkland did not respond to a request for comment. S&P Global Ratings downgraded the company to junk in May and Moody's Ratings had it on negative watch. That made it likely that the bonds would be sold to junk bond investors, who would bring sharper elbows to any negotiations because of their experience with these kinds of liability management exercises, some of the people said. The bankers needed to act fast. A standard debt exchange was considered but that would have taken months to carry out and given creditors plenty of time to organize and push back, people familiar with the matter said. Even the faster path to restructuring debt — a tender offer — typically takes ten business days, which advisers worried would still give lenders too much time to block the deal. So the bankers and lawyers devised a clever way to force a faster timeline. By offering to pay creditors to change the terms on the contracts of their bonds — a 'consent solicitation' — they could narrow the deadline to five days, and, in practice, leave creditors with only three days to decide whether they wanted to oppose the deal. Racing the Clock When Warner Bros. announced the offer on Monday, June 9, the race was on toward the Friday deadline. The law firm Akin Gump Strauss Hauer & Feld immediately reached out to creditors about signing on to a cooperation agreement that would allow them to negotiate for better terms with Warner Bros., people familiar with the conversations said. On Wednesday, as it tried to put together the 51% majority needed to force negotiations, Akin told creditors that it had gotten interest from 38% of one of the three groups of bondholders involved in the offer, the people said. But the advisors to Warner Bros. had structured the deal so that bondholders in different tranches were offered different terms, making it harder for creditors to mount a unified opposition. Some of the investors were also reliant on older software that forced them to submit their decision ahead of time. By Wednesday night, Akin sent out an email telling creditors that they were 'standing down' in their effort to organize an opposition, people who saw the email said. A representative for Akin did not respond to request for comment. It was not until Friday afternoon that it became clear to Warner Bros. and its advisers that it had cleared the threshold needed to pull the deal off. Bankers and lawyers that had been involved congratulated each other and Warner Bros. executives for their feat of financial engineering. And not all investors lost out. The investment firm Diameter Capital Partners read the covenants closely enough to identify one of the few Warner Bros. notes that would get a better return and ended up with more than half the outstanding bonds, people familiar with the deal said. Those notes jumped more than 22 cents after the deal was announced, according to Trace data, owing to a so-called make-whole provision. --With assistance from Ethan M Steinberg and Sridhar Natarajan. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too America's Top Consumer-Sentiment Economist Is Worried How to Steal a House China's Homegrown Jewelry Superstar Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P.
CNBC
40 minutes ago
- CNBC
JPMorgan says shares of this little-known online lender can rally more than 50%
Strong fundamentals and the potential for robust returns make Chinese online lending platform Qifu Technology an attractive buy, according to JPMorgan. The bank initiated the stock with an overweight rating and a $65 per share price target. JPMorgan's forecast implies more than 51% upside from Tuesday's close. Analyst Katherine Lei said Qifu's return on equity — a widely followed profitability measure — will grow at a 9% clip from 2024 to 2027, while its earnings expand at a compounded annual growth rate of 24%. That's the highest growth rate among Chinese lenders covered by JPMorgan, Lei said. She also pointed to the company's loan growth in recent years, despite heightened volatility. QFIN YTD mountain Qifu Technology stock in 2025. "From 2020-24, Qifu reported 84% growth in the number of clients with credit lines and an average net take rate of 3.9% on facilitated loans," Lei said. "Qifu has shown stable new loan growth and EPS growth vs peers during the macro volatility since 2020, demonstrating its operating prudency." "Additionally, we expect credit cost to decline due to higher write-backs," she said. The analyst also highlighted the company's cash hoard as of the first quarter of 2025, which she said sits at 37% of equity. This supports the case for buybacks and dividends. "Qifu's management has committed to reducing share count by 30% from 2023-26," Lei said. "We estimate that cash dividends and share buybacks will amount to RMB 5.9bn/12.7bn from 2025-27, equating to 82% of 1Q25 equity, or 43% of the current market cap." Shares have advanced roughly 11% in 2025. Qifu shares are not widely covered, but they are well liked by those who do. LSEG data shows that all 12 analysts covering shares have a buy or strong buy rating. The average price target also signals upside of more than 25%.
