Latest News Today – RBI Restricts American Express, Diners Club From


RBI restricted American Express and Diners Club from adding new customers from May 1

The Reserve Bank of India (RBI) has restricted American Express and Diners Club International Ltd. from adding new domestic customers from May 1 for not complying with data storage rules. The central bank order won’t impact existing customers. The two companies have been found guilty of not complying with RBI’s directions on ‘Storage of Payment System Data’, according to the RBI.

American Express Banking Corp. and Diners Club International Ltd. are Payment System Operators authorised to operate card networks in the country under the Payment and Settlement Systems Act, 2007 (PSS Act). The RBI has taken the action under Section 17 of the PSS Act, a statement issued by the central bank said.

According to the terms of RBI’s circular on ‘Storage of Payment System Data’ dated April 6, 2018, all payment system providers were directed to ensure that within a period of six months the entire data (including full end-to-end transaction details, information collected, carried, processed as part of the message and payment instruction) relating to payment systems operated by them is stored in a system only in India.

They were also required to report compliance to RBI and submit a Board-approved System Audit Report (SAR) conducted by a CERT-In empanelled auditor within the timelines specified therein.



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Snap, Intel, Mattel: What to Watch When the Stock Market Opens | Sidnaz Blog


Here’s what we’re watching ahead of Friday’s opening bell.

  • U.S. stock futures edged up as investors assessed fresh data on how manufacturing and services world-wide are faring in the second quarter.
  • Futures tied to the S&P 500 ticked 0.2% higher, and Nasdaq-100 futures edged up 0.2%, pointing to muted gains in technology stocks after the open. Read our full market wrap.
What’s Coming Up
  • IHS Markit’s preliminary U.S. manufacturing index for April, due at 9:45 a.m. ET, is expected to rise to 60.5 from 59.1 at the end of March, and the services index is expected to rise to 61.0 from 60.4.
  • U.S. new home sales, due at 10 a.m., are expected to rise to an annual pace of 888,000 in March from 775,000 a month earlier.
Market Movers to Watch
  • Snap


    SNAP -2.14%

    shares shot 4.8% higher ahead of the bell. The social-media company’s daily active users reached 280 million, up strongly from a year earlier, though the social-media company posted another quarterly loss.

  • Intel


    INTC -1.77%

    shares dropped 2.1% premarket. The semiconductor giant’s new chief executive said a global chip-supply shortage could stretch two more years as the company posted weaker quarterly earnings.

  • Kimberly-Clark


    KMB -0.81%

    just delivered its earnings report, and its stock subsequently dropped and is now down 4.3% premarket.

  • Mattel


    MAT 0.14%

    shares climbed 7.3% premarket. The toymaker raised financial projections for the year, pointing to strong sales trends including its iconic Barbie doll.

Barbie dolls from Mattel, Feb. 21, 2020.



Photo:

carlo allegri/Reuters

  • American Express


    AXP -0.01%

    shares slipped 3.2% premarket after the card company’s first-quarter revenue came up short of expectations.

  • Honeywell


    HON -0.54%

    shares fell 1.4% premarket after the company posted roughly flat revenue and a smaller profit for the first quarter amid a decline in sales in its aerospace segment.

  • Regions Financial


    RF -1.27%

    edged up 0.5% premarket after the Alabama-based regional bank reported first-quarter profit and revenue that rose above expectations, while net interest income came up shy.

Market Facts
Chart of the Day
Must Reads Since You Went to Bed

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General Electric, 3M, Etsy: What to Watch When the Stock Market | Sidnaz Blog


Here’s what we’re watching ahead of Tuesday’s opening bell.

U.S. stock futures were little changed after major indexes hit records a day earlier and investors got ready for a slew of blue-chip earnings. Read our full market wrap here.

What’s Coming Up

Starbucks,


SBUX -0.44%

Microsoft


MSFT 1.58%

and

Texas Instruments


TXN 0.06%

are due to give results after markets close. 

—The Federal Reserve starts its two-day policy meeting. The International Monetary Fund releases its world economic outlook at 8 a.m. ET. The World Economic Forum’s virtual summit continues from Davos.

Market Movers to Watch

General Electric


GE -1.08%

is up 6% in premarket trading. It reported earnings that missed analysts’ estimates, but said that it ended the fourth quarter with $37 billion of liquidity. 

3M


MMM 0.80%

rose 1.3% in premarket trading. It reported earnings per share that beat estimates and said it expects sales in 2021 to grow up to 8%.

Etsy


ETSY -2.24%

is up 5.8% ahead of the opening bell. Tesla CEO

Elon Musk

tweeted “I kinda love Etsy” and “Bought a hand knit wool Marvin the Martian helm for my dog” in the early hours of the morning. The online marketplace’s shares have rallied more than 17% this month.  

A sign advertising the online seller Etsy Inc. in Times Square following Etsy’s initial public offering on the Nasdaq in New York, April 16, 2015.



Photo:

mike segar/Reuters

—Oil exploration company

Apache


APA -3.97%

is up 5.2%, reversing direction after four straight days of losses.

Johnson & Johnson


JNJ 1.49%

reported earnings per share that shrank in the fourth quarter, but also said that it’s making progress on a Covid-19 vaccine. Its shares are up nearly 1% premarket. 

American Express


AXP -3.96%

shares fell 2% in premarket trading. It reported a decline in fourth-quarter revenue and earnings as it logged a negative provision for credit losses.

Raytheon Technologies


RTX -1.92%

added 2.6% premarket. The aerospace and defense manufacturer reported earnings per share, ex-items, that was above estimates. It also said it has a $67.3 billion backlog for its defense division and that it plans to buy back at least $1.5 billion shares in 2021.  

GameStop


GME 18.12%

is rallying nearly 16% premarket. The videogame retailer’s shares surged to a record on Monday, rising more than 145% at one point, before plunging and seesawing back up again. The battle between day traders and short sellers appears to continue on. 

Market Fact

The Global Cannabis Stock Index, which tracks U.S.-listed marijuana stocks, has climbed 35% since the start of this year.

Chart of the Day

Small-investor trading activity has stayed super hot in 2021, highlighting the opportunity for big banks to tap into a rare source of growth.

Must Reads Since You Went to Bed

The Day-Trading Barbarians at the Gate Won’t Sack Wall Street

UBS Plans $4.5 Billion Share Buyback as Profit Surges

Traders, Producers Earn Cheaper Rates From Banks for Lowering Carbon Production

Citadel, Point72 to Invest $2.75 Billion Into Melvin Capital Management

Rent Collection Is Down, and Apartment Owners Feel the Squeeze

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Bullish Stock Bets Explode as Major Indexes Repeatedly Set | Sidnaz Blog


Investors are piling into bets that will profit if stocks continue their record run.

Options activity is continuing at a breakneck pace in January, building on 2020’s record volumes. It is the latest sign of optimism cresting through markets as individual and institutional investors pick up bullish options to profit from stock gains and abandon bearish wagers.

More than half a trillion dollars worth of options on individual stocks traded on Jan. 8 alone, the highest single-day level on record, according to

Goldman Sachs Group Inc.


GS 0.01%

analysts in a Jan. 13 note.

Among the most popular bets were those tied to

Tesla Inc.,


TSLA 0.20%

Amazon.


AMZN -0.45%

com Inc.,

Apple Inc.


AAPL 1.61%

and

Nvidia Corp.


NVDA -1.12%

And bullish call-options trading surged to a high on Jan. 14, with about 32 million contracts changing hands, according to data provider Trade Alert.

Options are contracts that give investors the right to buy (a call option) or sell (a put option) shares, at specific prices, later in time. They are typically used to bet on stocks’ direction or hedge portfolios. Although they can be risky to trade for amateur investors, activity has exploded in recent months. The interest has stemmed in part from investors looking to magnify gains in the stock market, since options allow them to put down a relatively small sum for the chance at an outsize return.

Many of these investors have flocked to online brokerages that have made it easier than ever to trade. Smaller options trades of just one contract—typically thought to stem from individual investors—recently made up almost a tenth of activity, up from 2% three years ago, according to Trade Alert data.

The robust trading comes as U.S. stocks have jumped to fresh highs. Earnings results have poured in over the past week, with companies such as

Netflix Inc.


NFLX -2.53%

and Goldman Sachs posting strong results. In the coming week, traders will be monitoring a slate of releases from big tech companies, with

Microsoft Corp.


MSFT 0.44%

, Apple,

Facebook Inc.


FB 0.60%

and Tesla on deck.

Investors have also looked ahead to the prospect of fresh stimulus that would help the struggling economic recovery. In January, stocks have built on their big, and perhaps unexpected, gains of 2020: The S&P 500 has gained 2.3%, setting four closing highs, after rallying 16% last year. The stock-market rally has also broadened, lifting laggard sectors like financials and energy.

Ben Austin, a 21-year-old student at Syracuse University, said he has increased his positions in stocks such as

American Express Co.


AXP -1.01%

and

Citigroup Inc.,


C -0.87%

in part because of the chance for more fiscal stimulus, which he thinks could boost spending.

“For the next couple months, I’m still kind of bullish on the market,” Mr. Austin said. “I think we’re going to see another giant stimulus package.”

He started trading options in November and primarily trades calls to position for big events that have the potential to lift stocks, shying away from put options. He acknowledges that options can be riskier than stocks but relishes trading.

“There’s somewhat of a thrill to the more risk aspect of it,” Mr. Austin said. “There’s way more potential for higher gains in a shorter amount of time.”

Investors have flocked to options on shares of Amazon.



Photo:

tannen maury/Shutterstock

As stocks have continued their ascent and bullish positions have flourished, many have ditched bearish bets on the market.

Short interest in one of the biggest exchange-traded funds tied to the S&P 500 recently hit the lowest level since March 2020, according to data from IHS Markit. Investors that short shares typically borrow stocks and sell them, in the hopes of buying them back later at a lower price before returning them to the lender. These positions profit when stocks tumble. And bearish put options outstanding tied to the gauge recently fell to the lowest level in at least four years, Trade Alert data show.


‘This is the most popular I’ve seen call buying in my career.’


— Jon Cherry of Northern Trust Capital Markets

“This is the most popular I’ve seen call buying in my career,” said

Jon Cherry,

global head of options at Northern Trust Capital Markets, who has been in the industry for more than two decades. “Where I think that is really driving from is kind of the melt-up that we’ve seen in broader markets.”

Mr. Cherry said he has noticed interest in bullish positions as well as a desire to sell bearish options to juice income. Investors don’t want to miss out on any potential stock-market gains to come and want to stay in positions that will profit if stocks keep soaring, he said.

Hayden Cole, 22, a student at the College of the Canyons in California, waded into stocks and options after he lost his job during the coronavirus pandemic. He started chatting with his father about the stock market.

“He told me the stock market always recovers. It’ll always go back up,” Mr. Cole said.

He said he bought shares of fuel-cell company

Plug Power Inc.,


PLUG 4.99%

an exchange-traded fund tied to the S&P 500 and the ARK Innovation Exchange-Traded Fund, which tracks shares of companies such as Tesla and

Roku Inc.,


ROKU -0.19%

in May. Lately, he has placed bullish options trades on companies like

Advanced Micro Devices Inc.


AMD 1.38%

and Apple.

The S&P 500 has soared 36% since May, while the ARK fund has jumped 179%.

To some, the current environment is reminiscent of August, when stocks such as Tesla and Apple soared after their stock splits and a seemingly insatiable enthusiasm for stocks and options swept through the market, helping drive stocks to highs. The summer euphoria was followed by a 7.2% drop in the Nasdaq Composite in September.

JPMorgan Chase & Co. analysts said in a Jan. 8 note that call-option buying was prominent among individual investors, based on an analysis of trading activity made up of fewer than 10 options contracts. This call buying could lead to a rise in volatility, driven by options hedging, they said.

SHARE YOUR THOUGHTS

Will options trading in 2021 surpass the level of activity the sector saw last year? Why or why not? Join the conversation below.

And at times, overwhelming momentum in individual stocks such as

GameStop Corp.


GME 51.08%

has coincided with a surge in options activity. As the stock skyrocketed 51% on Friday, options activity tied to the company jumped to the highest level ever.

Options traders appear to be positioning for bigger gains for some of the sector’s star performers ahead of their earnings reports this week. An options measure called skew, which measures the cost of bullish options relative to bearish ones, is near the lowest levels of the past year on stocks such as Apple, Advanced Micro Devices and Facebook, Trade Alert data show.

“People are always looking in the rearview mirror,” said

Joanne Hill,

chief adviser for research at Cboe Vest, which oversees options-based strategies. “They’re looking at the returns that had been achieved if they bought a call option on a stock six months ago.

Write to Gunjan Banerji at [email protected]

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