Verizon Stock Gets Goldman Upgrade

Goldman Sachs added Dow component Verizon Communications Inc. (VZ) to its "Conviction Buy" list on Wednesday morning, placing a $61.00 price target after a three-week 16% slide completed a short-term reversal in the upper $40s. The downdraft looks relatively minor compared to the majority of stocks in recent weeks, but this high-yield slow mover rarely carves volatile price swings.

The telecommunications giant held up well during the trade war, with domestic operations insulating revenues against international exposure, but it still failed to break out above 20-year resistance in the mid-$60s. The March decline completed a reversal near that level following a 13-month testing process, dropping the stock to a 20-month low. However, it has now bounced at an 11-year trendline, suggesting that the shallow multi-year uptrend remains intact.

The company currently pays a 4.49% forward dividend yield that is unlikely to be suspended because the revenue stream has remained largely intact during the crisis due to long-term contracts. However, it's obvious that new phone sales declined sharply in the first quarter, raising the odds that the April 24 earnings release will fail to meet prior expectations. Even so, the hefty dividend could generate modest returns in coming quarters, especially if it's reinvested.

VZ Long-Term Chart (1989 – 2020)

A three-year trading range cleared resistance at a split-adjusted $18.50 in 1989, entered a healthy advance that posted multiple rally waves into 1996. The uptick entered a more vertical trajectory in 1997, reacting to the growing power of the internet, finally posting an all-time high at $64.75 in the fourth quarter of 1999. The stock turned sharply lower when the bubble burst in 2000, bottoming out at a seven-year low in the mid-$20s in 2002.

Weak upside into 2003 stalled in the low $40s, marking the highest high for the next four years, ahead of choppy range-bound action between the prior high and low. It finally broke out in the third quarter of 2007, but the rally failed, giving way to renewed selling pressure that undercut the 2002 low during the 2008 economic collapse. That impulse ended at $21.48, marking the end of the nine-year downtrend, ahead of mixed price action into the start of the new decade.

The stock completed a round trip into the 2007 high in 2012 and broke out, stalling in the mid-$50s a year later. Price action carved a five-year inverse head and shoulders pattern with a neckline at that level into 2018 and broke out once again, stalling within two points of the 1999 high in December 2019. It's been all downhill since that time, with a volatile multi-wave decline landing on top of the 11-year trendline in March.

VZ Short-Term Outlook

The monthly stochastic oscillator crossed into a sell cycle from the overbought zone in January 2020, predicting at least six to nine months of relative weakness. It has now stretched through the panel's midpoint, indicating that bears remain in charge under the surface. That selling pressure should keep a lid on gains in the coming weeks, suggesting that the stock will need more time to build support in the upper $40s.

The on-balance volume (OBV) accumulation-distribution indicator has dropped to the lowest low since February 2019, while buying power in the past week has shown little enthusiasm, despite the strong bounce. As a Dow component, Verizon stock also remains vulnerable to forced selling events when predatory algorithms target the instrument through index futures and exchange-traded funds. As a result, this stock may not bottom out until the market finds a long-term low.

The Bottom Line

Verizon could post modest returns in a flight to safety, but its membership in the Dow Jones Industrial Average will act as a headwind in coming months.

Disclosure: The author held Verizon shares in a family account at the time of publication.

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Coronavirus phase 4 stimulus bill can wait: Cruz, other Republicans

China played ‘critical part’ in coronavirus spread: Ted Cruz

Sen. Ted Cruz, R-Texas, on U.S.-China relations amid coronavirus and whether more financial resources are needed to address the crisis.

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Sen. Ted Cruz, R-Texas, sounded cool on the idea of Congress writing a "Phase Four" relief package as many Americans wonder when they'll be able to get back to work because of the coronavirus pandemic.

"It needs to be driven by the facts and circumstances we're facing," Cruz told "Mornings with Maria" on Wednesday. "We just passed a $2 trillion emergency relief bill that is unprecedented in its size and scope and design."

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"We need to see what happens in terms of fighting the coronavirus in the next several weeks," Cruz continued. "We need to allow the month of April to play out, and in this month of April, we need to be focusing our resources and energy on defeating the virus."

Cruz's fellow Republicans including House Minority Leader Kevin McCarthy and Sen. James Lankford have said they're not ready to start on a fourth stimulus package.

Cruz speaks on the Senate floor March 25. (Senate Television via AP)

"I'm not sure we need the fourth package," McCarthy said on "Sunday Morning Futures."

"I don't think we need to jump into another stimulus package right now," Lankford told FOX Business' Stuart Varney on Tuesday.

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Cruz also criticized China for its role in the virus' spread, accusing the Chinese government of a cover-up.

"The decisions of the Chinese government played a critical part in causing the pandemic to be as bad as it is," Cruz said. "Because they suppressed information, they held out international health experts, they covered it up, they punished the whistle-blowers. They did everything they could to hide the public health crisis spreading right in front of them."

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Cruz self-isolated for 14 days in March after learning he had shaken hands with someone at the Conservative Political Action Conference who tested positive for coronavirus.

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Gov. Says Illinois Has Received About 10% Of Requested Medical Supplies From White House

Illinois Gov. J.B. Pritzker (D) said Tuesday the state has received just 10% of some medical equipment it had requested from the federal government to treat a surge of patients infected with COVID-19, warning the state could soon run out of ventilators as people show up at hospitals in dramatic numbers.

Pritzker, speaking to CNN, said Illinois had been forced to bid against other states and even the federal government itself in order to buy personal protective equipment like masks, gowns and face shields to help guard health care workers against the virus. But what the state has received has fallen far short of what’s needed.

“Well, we asked for 1.7 million N95 masks and we’ve gotten about 400,000 total. We asked for many, many gloves and gowns and so on, we’ve gotten about 10% of what we asked for,” he told CNN’s Chris Cuomo. “They were promising millions of tests … the truth is that we’ve gotten very few tests from the federal government and their federal testing is slowed down.” 

The comments contradict those of President Donald Trump, who has said the country is well prepared to treat sick Americans despite pleas from governors that they don’t have enough equipment to do so.

When New York Gov. Andrew Cuomo said the state needs tens of thousands of ventilators, Trump fired back on Tuesday saying he already had “a lot.” The state is an epicenter of the outbreak, and at least 1,550 people have died there.

“The problem is, with some people, no matter how much you give it’s never enough,” the president said of Cuomo.

In a news briefing on Tuesday, the president said the White House predicted up to 240,000 people could die in the U.S. from the coronavirus even if current social distancing guidelines remain in place.

On Tuesday, Pritzker went on to say Illinois was largely dealing with the onslaught of coronavirus patients thanks to the work of local hospitals and testing facilities, rather than from aid from the White House.

“The people of Illinois, honestly, have come through,” he said. “We have the testing that we have today because of the hospitals here, because of the laboratories here, because our state government has gone out and bought machines and as many swabs … as we can.”

But despite those efforts, the governor warned of an impending shortage of life-saving ventilators even after Pritzker said he’s been “purchasing every ventilator that I can find.” He noted the state estimated it needed around 4,000 to treat infected patients, but had been able to acquire just 450.

“I honestly don’t know if we’re going to be able to solve it fast enough, because I can see this curve moving,” he said. “If we don’t have those ventilators delivered in the next week? … We’re going to run out of ventilators and the federal government really isn’t helping at all.”

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Working Tax Credit increase: Will furlough affect your Working Tax Credit?

Working Tax Credit will increase by £20, up to £86.67 a week for one year from April 6 because of the coronavirus outbreak. Working Tax Credits are used as income support for low income earners in the UK, although the scheme has largely been replaced by Universal Credit for most people.

There’s no set limit for income because it depends on your circumstances and those of your partner.

The Government website provides an example of “£18,000 for a couple without children or £13,100 for a single person without children – but it can be higher if you have children, pay for approved childcare or one of you is disabled.”

According to the Government, if you are earning less because you have been put on furlough, your Working Tax Credit payment might change.

The amount you receive will most likely go up if your income has been reduced.

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  • Universal Credit is rising by this amount in a matter of days

Jennie Brown, Tax Partner at Streets Chartered Accountants, said: “If you are furloughed through the Coronavirus Job Retention Scheme your employer may be entitled to a grant to cover up to 80% of your salary up to a maximum of £2,500.

“Due to the current Coronavirus crisis, HM Revenue & Customs has confirmed they will treat you as continuing to work your normal hours, meaning those before you were furloughed, for at least 8 weeks.  

“There will, therefore, be no change to your working tax credit entitlement during that period and we are waiting for further guidance to understand what would happen after 8 weeks.  

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  • Universal Credit for self employed How to claim Universal Credit

“You do not need to tell HM Revenue & Customs when you are furloughed temporarily, but if it is still ongoing after 8 weeks you should check the Government website to see if this period has been extended or whether you need to report the change. The much-awaited further guidance in this area will help to make this much clearer for those who are furloughed beyond 8 weeks.”

You will need to contact HMRC to see if you are eligible to receive more money if you have been put on furlough.

The increase in Working Tax Credits is part of the Government’s response to the coronavirus crisis.

The Job Retention Scheme was brought in by Chancellor Rishi Sunak to help businesses keep employees and stop the country falling into economic ruin.

The job scheme will cover the cost of wages up to 80 percent, backdated to March 1 and will be open for a period of three months initially.

The scheme will be reviewed during that time and potentially extended for longer if necessary.

All employees in the UK who are recipients of a salary via a pay as you earn scheme are eligible for the scheme.

This includes public sector workers, local authorities and charities.

A similar scheme is also running for self-employed individuals.

Chancellor Rishi Sunak said: “Any employer in the country – small or large, charitable or non-profit – will be eligible for the scheme.

“Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are furloughed and kept on payroll, rather than being laid off.

“Government grants will cover 80 percent of the salary of retained workers up to a total of £2,500 a month – that’s above the median income.

“And, of course, employers can top up salaries further if they choose to.”

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Private sector sheds 27,000 jobs in March as coronavirus ripples through US economy

Coronavirus cases climb as job losses increase: Understanding the impact of the pandemic

Barron’s Roundtable of Barron’s associate editor Jack Hough, Barron’s markets editor Ben Levisohn, Barron’s reporter Carleton English and Barron’s senior writer Al Root are joined by Guggenheim Partners’ CIO Scott Minerd to discuss how the coronavirus crisis isn’t over yet and the full impact on the economy is not yet known.

Private employers slashed 27,000 jobs in March, shortly before the worst of the coronavirus-induced shutdowns began to batter the U.S. economy, according to the ADP National Employment Report released Wednesday.

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Economists surveyed by Refinitiv expected 150,000 job losses in the private sector. It's the first time in nearly 10 years that jobs have disappeared in the private sector.

Actual losses are significantly worse than Wednesday's report, which covers only the period leading up to March 12, before the country took unprecedented measures to mitigate the spread of the virus, reflects.

Last week, the Labor Department said that a record-shattering 3.28 million Americans filed for unemployment between the period of March 14 and March 21, eclipsing the number of jobless claims seen during the worst of the 2008 financial crisis.

The data precedes the release of a more closely watched update from the Labor Department on Friday, which is expected to show the U.S. economy lost 100,000 jobs in March, snapping a 113-month streak of payroll gains. Analysts anticipate unemployment will jump to 3.8 percent, up from 3.5 percent in February — a half-century low — making it the largest increase in more than nine years.

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This is a developing story. Please check back for updates.

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Now is the time for the banks to show they really care about small businesses

As the Covid-19 pandemic pushes many of America’s small businesses to the edge of collapse, now is the moment for bankers around the country to really show that they give a you-know-what about small businesses.

Congress has passed a giant $2.2tn bill to help people survive the coronavirus pandemic. As part of this bill, $377bn has been set aside specifically to aid small businesses. In effect, the government is giving free money to small business owners that qualify for this aid. And most do.

To beat the coronavirus slump, shut us down now, Mr President | Gene Marks

If you’re running a company with fewer than 500 employees, you can now apply for up to a $10m loan under the Small Business Administration’s Section 7(a) program.

But these are not just loans. It’s free money. That’s because for those businesses that apply before 30 June, any individual loan amounts that are being used to cover eight weeks of payroll (including sick time), rent, utilities and mortgages will be forgiven. Which means that the government is literally funding our operations for a two-month period.

Are there limitations? A few. Employee compensation over an annualized $100,000 wouldn’t be part of the calculation. Documentation must be provided. Layoffs during this period would be penalized. But then there are some other bonuses. For example, non-profits and freelancers qualify. Loan payments can be deferred for up to a year. All fees are waived. Forgivable amounts are not taxed.

There’s one big obstacle that could get in the way: the banks.

These loans are being issued through the SBA’s network of member banks. And the bankers I’ve spoken to already have not exactly impressed me. When asked to comment, a few told me they “didn’t have time” to answer my questions about this program. A few others were hesitant until the “final legislation was passed” (even though the small business portion of the bill is not even under debate). Others said they hadn’t “made their plans” on how they were going to tell their small business customers.

Not a good sign out of the gate.

Like all businesses, bankers are also facing challenges. They’ve got to get their existing work done even though their employees are now working for home. They’re trying to keep their important customers happy and continue operations despite the disruptions caused by the pandemic.

For some of them, this stimulus bill is a potential hassle. The loans are low interest. Even though the government is guaranteeing them, approvals and paperwork flow will still be required. They will have to deal with many requests and repeatedly answer many of the same questions. They will need to train their loan officers. For many – particularly those that make their profits from big corporations and not necessarily small businesses – it’s just a pain in the neck and may not be worth all the headaches.

Well, my banking friends: now’s the time to step up. We need you.

This may not be the most profitable work and it will definitely be more work. But I’m imploring you to jump in and not make empty gestures. There are countless small businesses who need this money. There are many more that aren’t even aware of this stuff. These are people who you can help. These are livelihoods that you can sustain and communities you can save. This is your opportunity to really make a difference. It’s also an opportunity to connect with new customers too.

Banks should be jumping on this right now and not waiting or delaying. This is not the time to be conservative or prudent. This is the time to step up. How?

They should be communicating, educating and informing their local small business communities of the stimulus cash that’s available to help them survive. They should be writing blogs, producing videos, appearing on TV, radio and podcasts to get the word out. They should be setting aside special hours, making calls, working harder. They should be reaching out directly to their customers about the benefits they can offer. They should be making this their role to play in helping the country through this epidemic.

Why? Because banks care about small businesses, right? Well, if they really do, this is the time to prove it.

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India may ease clinical trial norms for coronavirus vaccine

The Central Drugs Standard Control Organisation said while the rights, safety, and well-being of trial subjects were of paramount importance, protocol amendment, deviation or modification might be necessary in some cases owing to unavoidable circumstances. 

The government is considering temporarily relaxing clinical trial norms as a few pharmaceutical companies are looking to develop a vaccine for the novel coronavirus (Covid-19), which has killed about 40,000 and infected more than 800,000 people around the world. Sources said no fresh approvals would be given for clinical trials, except for those related to Covid-19. 

The Central Drugs Standard Control Organisation (CDSCO) said in a notification on Monday that various challenges might arise during the conduct of clinical trials in the wake of the outbreak of Covid-19, which could “lead to difficulties in complete adherence to the approved protocol and regulatory provisions”. 

The regulatory authority said while the rights, safety, and wellbeing of trial subjects were of paramount importance, protocol amendment, deviation or modification might be necessary in some cases owing to unavoidable circumstances. 

The industry feels such relaxations are required for the ongoing clinical trial programmes on Covid-19, as well as the fresh ones. 

Currently, Cadila Healthcare and Serum Institute of India are working on a vaccine for Covid-19. These projects are in the pre-clinical stage, but human trials will start eventually. 

The World Health Organization (WHO) released a list of 44 vaccine candidates in clinical evaluation globally as of March 20. Of this, only two vaccine candidates are in Phase 1 of trials, while others are in pre-clinical stages. 

With the viral outbreak reaching Stage 3 of the pandemic (which implies transmission within the community where the source of the infection cannot be easily traced) in most countries, it is imperative to fast-track research on the same. Global research bodies have already indicated that in 2020, there would be several human clinical trials across the globe. 

On Monday, US-based drug major Johnson & Johnson said it had selected the lead Covid-19 vaccine candidate from the constructs it had been working on since January. Zydus Cadila, which felt that developing the vaccine was in the interests of national security, said it would start animal testing now. 

While most experts feel that commercialising any Covid-19 vaccine is unlikely before FY22, Zydus is working round the clock to develop a vaccine at the earliest. In an earlier interaction with Business Standard, Pankaj Patel, chairman of Zydus Cadila, had said they were working to get the vaccine candidate ready in eight to 10 months. 

Zydus has taken a two-pronged approach to developing the Covid-19 vaccine —  a DNA vaccine (will work against the viral membrane protein responsible for the cell entry of the virus), and second approach involving a live weakened (attenuated) recombinant measles vaccine. The recombinant measles vaccine will induce long-term neutralising antibodies that will protect against infection. 

As such India has a stringent regulatory environment for clinical trials. As a result, only 1.2 per cent of the global clinical trials take place in India.

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Trump’s Task Force Still Won’t Call For A National Stay-At-Home Order

The White House coronavirus task force still won’t call for a national stay-at-home order, despite calls from medical professionals and researchers to do so to curb the spread of the virus in places.

As Drs. Anthony Fauci and Deborah Birx explained during Tuesday night’s task force update that the total number of deaths in the U.S. could rise to 100,000 to 240,000, President Donald Trump avoided explaining why the administration hasn’t imposed a stay-at-home order yet.

Instead, Trump talked about how the death toll would have reached up to 2 million people if he had done nothing at all.

“What would’ve happened if we did nothing? Because there was a group that said, ‘Let’s just ride it out,’” the president said. “What would’ve happened? That number comes in at 1.5 to 1.6 million, up to 2.2 … 2.2 million people would have died.” 

“You would have seen people dying on airplanes,” he added. “You would’ve seen people dying in hotel lobbies. You’d be seeing death all over.”

Earlier in the pandemic, Trump dismissed the severity of the virus and compared it to the flu. On March 9, Trump compared numbers of people who died of the flu in 2019 to the number of confirmed coronavirus cases and deaths at that time.

On Tuesday, as the national death toll from the virus skyrocketed to 3,700, the president admitted that the coronavirus outbreak was worse than the flu.

Public health experts have warned that the COVID-19 pandemic will continue to worsen if the Trump administration does not take strict action and order all Americans to stay at home. 

According to a tally kept by The Washington Post, governors in more than a dozen states are refusing to issue their own statewide orders, even as numbers of COVID-19 cases grow exponentially in their areas.

Florida, for example, has more than 5,000 cases, though Gov. Ron DeSantis (R) has called on only four counties in South Florida to abide by stay-at-home orders. DeSantis said at his own news conference Tuesday that he was waiting for the White House task force to recommend that to him first.

Alabama Gov. Kay Ivey (R) has suggested that her residents stay at home “as much as possible,” but she did not issue a statewide order.

Despite governors looking to the White House for guidance, Vice President Mike Pence, who is leading the task force, still said Tuesday that the administration was deferring any type of mitigation measures to “state and local health authorities.”

During the White House news conference, Birx said that states, such as California and Washington, who had issued mitigation orders very early on in their outbreaks had been able to slow the outbreak dramatically.

Those states “really talked to their communities and decided to mitigate before they started seeing this number of cases,” Birx said. 

“Now we know that makes a big difference,” she added. “If you wait ’til you see it, it’s too late.”

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‘You Do Not Want This’: Chris Cuomo Describes Worst Part Of His Coronavirus Infection

CNN’s Chris Cuomo returned to the airwaves on Tuesday evening hours after revealing that he had been diagnosed with COVID-19, the disease caused by the new coronavirus. 

“You do not want this,” he told viewers. 

Earlier in the day, he wrote on social media that he had been experiencing fever, chills and shortness of breath days after being exposed to people who later found out they had the virus. 

Speaking on the air Tuesday evening, he said he felt fine ― but indicated his real concern is that he may have gotten a family member sick.

“You can understand how sickening that is to me as a husband and a father,” he said. 

Cuomo is broadcasting from his basement, where he has quarantined himself from the rest of his family.

He said he was hesitant to talk about himself because his experience is “so small” compared to what so many others are facing. 

“This is a fight,” he said. “It’s going to get worse. We’re going to suffer. And you have to accept that not with fear but with almost a fanatical sense of passion to fight because that’s the only way you ever made it through anything hard in your life, and this will be no different.” 

See his full segment below: 

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‘Diamond’ Joe Gutnick’s company insolvent after ‘dishonest’ transactions

The Federal Court has ordered that a company associated with Melbourne business figure "Diamond" Joe Gutnick be wound up and declared insolvent amid allegations of millions of dollars of dishonest related party transactions.

The Federal Court on Wednesday appointed liquidators to the publicly traded mining company Merlin Diamonds Limited after a provisional liquidators' report showed it had just $1331 in the bank and liabilities of $13 million.

Joe Gutnick appearing at the Federal Court in Melbourne in 2017.Credit:Jason South

Judge Michael O'Bryan said a liquidator would allow for investigations into a number of inter-company loans, related party transactions and "round robin" payments that "have the appearance of uncommercial and dishonest transactions".

The Australian Securities and Investments Commission's had requested a liquidator to be appointed after an investigation into Mr Gutnick, one of Australia’s best-known business figures. The ordained Rabbi was once a regular on the BRW Rich 200 list and a benefactor to many Jewish charities. As president of a stricken Melbourne Football Club during the 1990s, his financial support kept the club alive.

However, The Age and The Sydney Morning Herald revealed in a series of stories in 2019 that ASIC was investigating what happened to $18 million in loans that allegedly saw money flow from publicly listed companies controlled by Mr Gutnick to a private company that he was also closely involved with.

In a scathing judgment on Wednesday, Justice O'Bryan said Merlin "does not appear to take its legal obligations seriously," had expressed "no contrition" for various corporate transgressions and faced a "strong prima facie case" that it had contravened the Corporations Act, particularly when it came to two related companies called Chabad and Axis.

At the relevant times, both Gutnicks were directors of Merlin, Chabad and Axis.

"Merlin's current directors have permitted Merlin to advance funds totalling in excess of $13 million on uncommercial terms to a company related to [Joe Gutnick and his son Mordechai Gutnick] for no real benefit to Merlin in circumstances where the loans were being fully impaired in the same year in which they were advanced," the judgment said.

The money was paid through a number of companies in "a series of round-robin transactions", constituting "a financial benefit" to the Gutnicks with no evidence that it was approved by the shareholders of Merlin.

"The transactions … cannot be characterised as having been conducted on reasonable arm's length terms. Further, the round-robin transactions associated with the issue of convertible notes to Chabad have the appearance of uncommercial and dishonest transactions."

These facts "strongly suggest that the current directors of Merlin have applied company monies for the benefit of entities related to Mr Joseph Gutnick and Mr Mordechai Gutnick," the judgment said.

Another Gutnick-linked company, Axis, received Merlin money and then loaned more than $9 million to Brocho, a private company controlled by the Gutnick family.

"There is a need for someone independent of the company to investigate the loans that have been made to Axis and the recoverability of those loans. In my view, that need is urgent," the judge wrote.

Deloitte was appointed as liquidator.

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