Prudential's most recent trend suggests a bearish bias. One trading opportunity on Prudential is a Bear Call Spread using a strike $82.50 short call and a strike $87.50 long call offers a potential 20.48% return on risk over the next 23 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $82.50 by expiration. The full premium credit of $0.85 would be kept by the premium seller. The risk of $4.15 would be incurred if the stock rose above the $87.50 long call strike price.
The 5-day moving average is moving down which suggests that the short-term momentum for Prudential is bearish and the probability of a decline in share price is higher if the stock starts trending.
The 20-day moving average is moving down which suggests that the medium-term momentum for Prudential is bearish.
The RSI indicator is at 31.97 level which suggests that the stock is neither overbought nor oversold at this time.
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LATEST NEWS for Prudential
PGIM High Yield Bond Fund, Inc. and PGIM Global High Yield Fund, Inc. declare an increase in distributions for September, October and November 2019
Mon, 26 Aug 2019 20:10:00 +0000
PGIM High Yield Bond Fund, Inc. and PGIM Global High Yield Fund, Inc. declared today that the funds will increase monthly distributions for September, October and November 2019.
GE Can’t Hide From Problems in the Long-Term-Care Insurance Industry, Fitch Says
Tue, 20 Aug 2019 13:28:00 +0000
The bond-rating firm said it expects more charges against earnings for the long-germ-care insurance industry, which also affects reinsurer General Electric.
Is the ECB Poised to Fire Up the Whirlybird?
Tue, 20 Aug 2019 06:03:29 +0000
(Bloomberg Opinion) — Negative mortgage rates in Denmark. Sub-zero yields on 10-year corporate bonds from Nestle SA. A 100-year Austria bond trading at more than twice its face value. Record low yields on 30-year Treasuries. For fund managers trying to navigate the fixed-income universe, the bond market’s reaction to the prospect of a recession makes life more treacherous every day.Investors see a second Federal Reserve interest-rate cut at its next meeting on Sept. 18 as a certainty, based on prices in the interest-rate futures market. But it’s the European Central Bank that appears to be facing the more difficult policy decision, given that its key interest rate is stuck at -0.4%.As the chart above shows, futures contracts in the euro zone have dramatically repriced since the beginning of the month. Traders are anticipating that borrowing costs will drop even further into negative territory and that the ECB will resume its quantitative easing program.But some investors are questioning how effective the central bank’s effort to gobble up more of the outstanding debt in the government bond market can be when yields have already reached record lows.For Philipp Hildebrand, vice-chairman of BlackRock Inc., the ECB is already out of ammunition – which means investors should indulge in some more magical thinking about what comes next in the list of unconventional policy measures.“We’re going to see a regime change in monetary policy that’s as big a deal as the one we saw between pre-crisis and post-crisis, a blurring of fiscal and monetary activities and responsibilities,” Hildebrand told Bloomberg Television’s Francine Lacqua last week.BlackRock has just published a paper detailing what it expects the guardians of monetary stability to do next. Here’s the key recommendation from the paper, which is entitled “Dealing with the next downturn: From unconventional monetary policy to unprecedented policy coordination.”An unprecedented response is needed when monetary policy is exhausted and fiscal policy alone is not enough. That response will likely involve “going direct”: Going direct means the central bank finding ways to get central bank money directly in the hands of public and private sector spenders.What’s incredible about the BlackRock policy prescription is that three of the paper’s four authors are former central bankers who now work for the asset manager. Hildebrand is the former head of the Swiss Central Bank, Stanley Fischer did stints at the Federal Reserve and the Bank of Israel, while Jean Boivin is ex-deputy governor of the Bank of Canada.Think about that for a second. Three former central bankers – not academics, not professors, not theoreticians – are saying that central bankers are out of ammunition, and that politicians won’t be able to muster enough fiscal firepower to resuscitate growth. These are people who’ve been at the coalface of implementing monetary policy. So the rest of us need to pay attention.QuicktakeHelicopter MoneyAs my Bloomberg Opinion colleague Brian Chappatta points out, BlackRock’s publication is timed to coincide with the annual Kansas City Fed’s Economic Policy Symposium that kicks off on Thursday in Jackson Hole, Wyoming. While that gathering has the anodyne title of “Challenges for Monetary Policy,” the size of the task currently facing the world’s central bankers suggests the meeting could be one of the most important in recent years.Concern about the outlook for growth is mounting. Even the German government, which has resisted the temptation to take advantage of ultra-cheap money to boost spending, is readying a package of fiscal measures to counter a deep recession, my colleague Birgit Jennen at Bloomberg News reported Monday. But improving energy efficiency, encouraging hiring and increasing social welfare payments may prove too little, too late.In the euro zone, BlackRock suggests the ECB could adopt a plan first proposed in 2016 by Eric Lonergan, a fund manager at M&G Prudential, in which the central bank offers zero-coupon loans to each adult citizen. While Lonergan is explicitly in favor of helicopter money, the BlackRock paper sees a risk of it creating runaway inflation:History is littered with examples of how central bank money printing leads to runaway inflation or hyperinflation. Yet there is little experience in using helicopter money to generate just-enough inflation to achieve price stability. History as well as theory suggests large-scale injections of money are simply not a tool that can be fine tuned for a modest increase in inflation.BlackRock’s tweak to the helicopter money proposal, popularized by former Fed Chairman Ben Bernanke in a 2002 speech, involves establishing a permanent “standing emergency fiscal facility” that would only used in extremis, and in combination with monetary and fiscal policy becoming “jointly responsible for achieving the inflation target.” It would come with “a predefined exit point and an explicit inflation objective.”Both of those latter constraints are likely to prove as problematic for BlackRock’s proposal as they have for the current unconventional policies pursued by central banks. Exiting quantitative easing and returning interest rates to more normal levels have both turned out to be far more difficult than expected; and explicit inflation objectives are useless when prices stubbornly refuse to rise.Nevertheless, bond investors have definitely caught wind of something shifting in the monetary-policy air, and have reacted by extending the list of never-seen-before happenings in the debt market. Maybe the next thing will turn out to be a helicopter dropping money – with Christine Lagarde, the incoming president of the ECB, in the pilot’s seat.To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
How to deal with market volatility if you’re retiring soon
Thu, 15 Aug 2019 20:56:16 +0000
For those looking to retire in the next five years, market volatility is extra unsettling. Retirement expert Ed Slott has advice about what investors should be doing to protect themselves in these tumultuous times.
GE Left Itself Open to Short-Seller’s Critique
Thu, 15 Aug 2019 18:23:10 +0000
(Bloomberg Opinion) — General Electric Co. is learning the price of its credibility shortcomings.Shares of the embattled industrial giant plunged more than 15% at one point on Thursday after Bernie Madoff whistle-blower Harry Markopolos published a damning critique of the company’s accounting. Markopolos is working on behalf of an unidentified hedge fund that is betting GE shares will decline. The company calls his claims “meritless,” and CEO Larry Culp deemed the report “market manipulation” in an e-mailed statement. I read the report (all 170-plus pages of it), and my first instinct was that none of the allegations — which range from GE’s need to immediately bolster its long-term care insurance reserves with $18.5 billion in cash to looming writedowns on its stake in Baker Hughes to the generally confusing way the company represents its finances — are particularly new, at least not for those who have been paying close attention. The scale of the potential problems is bigger than any others have estimated, and the person making the claims has a track record of exposing fraud, having warned the U.S. Securities and Exchange Commission about Madoff’s Ponzi scheme years before it became public. But the line from the report that stood out to me the most was this one: “Who’s being transparent — them or us?”The market is giving its verdict. A series of broken promises, presentation “errors” that later have to be corrected, a continuing tendency to micromanage Wall Street expectations to orchestrate optical “beats” and an unwillingness to do away with heavily engineered earnings adjustments have cost GE dearly in the credibility department. Regardless of the truth of Markopolos’s report — and again, there’s plenty to debate there — GE has surrendered the high ground in its defense.Just this week, Steve Winoker, GE’s head of investor relations, issued an update on the company’s power unit and sought to clarify “confusion” about the number of 7F gas turbines it has installed. GE says it has 900 units in service, which is up relative to the year-end total of 2017 and 2018. But marketing materials from those years put GE’s 7F installed base at more than 1,100 units. Winoker says those materials lumped other types of units into the 7F tally. But there was really no room for that kind of interpretation in the wording of the brochure. This disclosure follows outgoing CFO Jamie Miller’s acknowledgment in May of the “confusion” created when she referenced an industry data firm’s calculation of power-equipment orders on an earnings call in a way that made GE’s business appear more robust than it was. At the Paris Air Show in June, in response to a question from JPMorgan Chase & Co. analyst Steve Tusa, Jean Lydon-Rodgers, CEO of GE Aviation’s services arm, said the company’s CF34 and CF6 engines account for “slightly less” than half of repair shop visits, raising questions about how exposed that business may be to a drop in profitability once those older models are replaced. In a follow-up e-mail to investors, Winoker clarified the number is actually just less than a third.Maybe these are all inadvertent errors. But for a company that clearly needs to do more to bolster its transparency and credibility, it’s a troubling fact pattern and puts it on the back foot when countering Markopolos’s allegations.The primary focus of Markopolos’s analysis is GE’s long-term care insurance business, which he argues needs an immediate $18.5 billion cash influx with a $10.5 billion non-cash GAAP charge looming over the next few years because of tougher accounting rules. That’s on top of the $15 billion reserve shortfall GE disclosed in January 2018. GE’s argument that insurance reserves are “well-supported for our portfolio characteristics” runs up against the contrast between what appears to be a deeply researched, numbers-heavy analysis by Markopolos and its own opaque commentary and financial presentations.Is Markopolos’s estimate correct? He bases it off an analysis of loss ratios and reserves for comparable policies at insurers such as Prudential Financial Inc. and Unum Group. His numbers seem dire, but GE itself warned in its annual filing that a more sober outlook for investment yields and the rate at which insurance claimants get healthier could force the company to put up additional pretax GAAP reserves, with some scenarios demanding a $12 billion increase. Estimating the appropriate reserve amount is a careful dance of assumptions of various puts and takes, and you’d need a crystal ball to accurately predict what’s required here. But the underlying point is that GE isn’t being nearly as conservative as it should be with this business, especially given looming accounting rule changes. I made that argument in February.He also argues that GE shouldn’t consolidate the Baker Hughes results in its numbers and that it’s avoiding a writedown on that deal. I’m less troubled by this because GE has disclosed the size of the potential impairment once its stake in Baker Hughes drops below 50%, and it does clearly break out the earnings and cash flow contribution from the business. What could end up being most problematic for GE is Markopolos’s brief allusion to the disconnect between the aviation unit’s $4.2 billion in 2018 free cash flow and engine partner Safran SA’s disclosure that it loses money on each Leap engine produced and won’t recover cost of goods sold until the end of the decade at best. The true underlying financials of that business have been a fixation for critics who contend it’s not as solid as GE makes it out to be.Markopolos obviously has a vested interest in pushing down GE’s share price. But the company would be wise to focus less on his motivations and more on refuting the specifics of his claims with hard numbers of its own. That would go a long way toward rebuilding investors’ trust.To contact the author of this story: Brooke Sutherland at email@example.comTo contact the editor responsible for this story: Daniel Niemi at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brooke Sutherland is a Bloomberg Opinion columnist covering deals and industrial companies. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
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