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    Activists Crashed Exxon’s Board, but Forcing Change Will Be Hard

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    The tension between climate goals and lifting Exxon Mobil’s profits could make it difficult for activists to make progress.The growing urgency to address climate change and concerns about the financial performance of Exxon Mobil aligned this week to help activist investors place two directors on the company’s board.But it is not clear if the activists can deliver on their dual goals — reducing the emissions that are warming the planet and lifting the profits and stock price of Exxon. The potential tensions between those objectives could doom the investor effort to transform the company and the oil industry.Getting Exxon, a behemoth company with $265 billion in revenue in 2019 and oil and gas fields around the world, to switch to cleaner energy will be a yearslong and difficult process. It is unlikely to produce quick returns and could sap profits for a while as the company spends a small fortune to retool itself.And the biggest investment firms, which lent critical support to the activists and control a lot of Exxon’s stock, may be too timid to keep the pressure on company executives and board members who are determined to resist big changes.The manifesto put together by Engine No. 1, the hedge fund with a tiny stake in Exxon that led the dissident effort, is not particularly extreme. Nor does it contain a lot of details. The two people who won seats on the board declined interview requests, citing their new roles.“Two votes on a board of a dozen directors doesn’t win the day,” said Dan Becker, director of the Center for Biological Diversity’s Safe Climate Transport Campaign. Still, he argued that it was “enough to bring a message” to the rest of the board. “Will it change everything? Probably not quickly.”Engine No. 1’s victory, which was not expected and came in the face of fierce opposition from management, has delivered a jarring reminder of the perils of doing too little to change — and veteran oil executives say it will encourage activists to push for change at other companies like Chevron, the second-largest U.S. oil company after Exxon.“This is an example of the domino theory,” said Jorge Piñon, a former senior executive at Amoco and BP who is now at the University of Texas at Austin. “One piece has fallen and you will see others follow. Exxon and Chevron are going to face quite a bit of pressure that in my opinion they are not going to be able to withstand and they will have to give in to new demands.”With governments around the world making ambitious commitments to cut emissions, including offering incentives for electric vehicles, and requiring utilities to shut down power plants powered by fossil fuels, the demand for Exxon’s main products could decline, depressing profits. Investors say Exxon and Chevron have been too slow to adapt to that shift compared with European oil companies like BP and Royal Dutch Shell.“If you want to be a public company in a carbon-intensive industry you are going to have to convince investors that you still have a viable business in a low-carbon future,” said Mark Viviano, a managing partner at Kimmeridge, an energy-focused private equity firm.Exxon management says it realizes it must prepare for a lower-carbon future, and has supported the goals of the Paris climate agreement. But the company gave up on solar energy decades ago, and today its efforts to remake itself for an energy transition rely on some moonshot ideas that may not work out.It is a global leader in capturing carbon from industry and storing it below ground, and in recent weeks it has proposed an enormous $100 billion carbon capture and storage project along the Houston Ship Channel that could be a model for the world. But for the plan to be economically viable, the federal government would have to impose a carbon tax or another kind of price on carbon, a tough sell in Washington these days.Exxon has also worked for years to make advanced biofuels from algae, a project that other companies have abandoned. And it continues to bet heavily on exploration for oil and gas at a time when demand for such products may be peaking.Shareholders voted to retain Darren Woods as chief executive and chairman, a move that a Morgan Stanley research report viewed as an endorsement of his strategy to spend less on capital projects, reduce costs and continue to pay a generous dividend.“I’m not sure Exxon is going to change how they are going to deal with the energy transition,” said Mark Boling, a former executive vice president at Southwestern Energy, a Texas oil and gas company. “I think they have made a decision on how they are going to go and a few new board members are not going to make a difference.”Engine No. 1 managers are not saying much about their plans.“We’ve redefined what’s possible,” Chris James, founder of Engine No. 1, said in an interview after the vote. “Our overall goal is really greater transparency, which brings accountability, transparency on the impacts of what the business does as well as accountability on how to manage those impacts.”The two Engine No. 1 nominees who won election so far, Gregory Goff and Kaisa Hietala, have deep experience in the energy industry. Mr. Goff was chief executive of Andeavor, a refining and marketing company, while Ms. Hietala was executive vice president at Neste, a Finnish refiner and pioneer in biofuels.Engine No. 1 managers come across as cautious and modest in interviews. They don’t make brash pronouncements or hurl insults at Exxon as many climate activists often do.“There is no one big change,” said Charlie Penner, Engine No. 1’s head of active engagement. “Nothing is going to happen quickly.”Some big asset managers contend that companies like Exxon will have a better performance over the long run if they reduce their reliance on selling oil and gas, which many believe will fall in price if the world moves toward electric vehicles.Bryan Derballa for The New York TimesThe votes of giant asset management firms with big stakes in Exxon were critical in securing victory for Engine No. 1’s nominees. But it’s not clear how hard asset managers that voted for the hedge fund’s candidates like BlackRock, Exxon’s second-biggest shareholder, and Vanguard, its largest, will now push for climate-focused objectives.Laurence D. Fink, BlackRock’s chief executive, has said in recent years that he sees climate change as a big threat — and his firm has often used its enormous voting power to influence companies, and frequently targeted directors.In explaining its Exxon votes, BlackRock said Wednesday that the company had not done enough to assess the impact of a reduction in demand for fossil fuels, and contended this had “the potential to undermine the company’s long-term financial sustainability.”These big investors place a lot of faith in companies and the profit motive to make changes that can cost trillions of dollars. This year, Mr. Fink wrote that he had “great optimism about the future of capitalism and the future health of the economy — not in spite of the energy transition, but because of it.”But investors have not always rewarded companies that have announced ambitious plans to reduce emissions and move toward cleaner energy.Over the last five years, Exxon’s shares have fallen by about a third — a period over which the S&P 500 stock index was up about 100 percent. Its stock has done worse than the shares of other large oil companies. Yet, the shares of BP and Shell, two European companies that are investing a lot in cleaner sources of energy, are also lower — BP is down more than 17 percent over five years and Shell is down more than 26 percent.And despite their efforts, energy companies as a whole have not reduced emissions by nearly enough to stop temperatures rising above levels that scientists believe are dangerous for the planet, and many experts are calling for more far-reaching changes. The International Energy Agency said last week that countries needed to stop approving new oil and gas fields immediately for the world to reach net zero carbon emissions by 2050.Roberta Giordano, finance program campaigner for the Sunrise Project, an environmental group, said BlackRock, Vanguard and other asset managers needed to go much further, starting with the removal of Mr. Woods as Exxon’s chief executive.“Once again this shareholder season, BlackRock has failed to fully use its massive voting power on climate,” she said.But more optimistic analysts argue that Exxon could help the world reduce emissions and make money doing it. For example, the company’s experience with offshore oil drilling could be used to build offshore wind farms, said Geoffrey Heal, a professor at Columbia Business School. And Exxon could spend more on technology that removes carbon from the atmosphere and help make it affordable.“If I was one of the directors,” Mr. Heal said, “I’d be pushing for that.” More

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    China’s Biggest ‘Bad Bank’ Tests Beijing’s Resolve on Financial Reform

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    Chinese regulators say they want to clean up the country’s financial system, but a state-owned conglomerate may ultimately get in the way.HONG KONG — BlackRock gave it money. So did Goldman Sachs.Foreign investors had good reason to trust Huarong, the sprawling Chinese financial conglomerate. Even as its executives showed a perilous appetite for risky borrowing and lending, the investors believed they could depend on Beijing to bail out the state-owned company if things ever got too dicey. That’s what China had always done. More

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    Meme Stocks and Archegos: Fed Calls Out Financial Weak Spots

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    The Federal Reserve painted a picture of a generally stable financial system, but one bubbling with risk-taking that merits attention.The Federal Reserve warned about financial stability risks emanating from frothy stocks and debt-laden hedge fund bets in its twice-annual report on potential vulnerabilities in the system, pointing to the rise of so-called meme stocks as one sign that risk-taking could be getting out of hand. More

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    ‘A Perfect Positive Storm’: Bonkers Dollars for Big Tech

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    The dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies, raising uncomfortable questions for their C.E.O.s.In the Great Recession more than a decade ago, big tech companies hit a rough patch just like everyone else. Now they have become unquestioned winners of the pandemic economy.The combined yearly revenue of Amazon, Apple, Alphabet, Microsoft and Facebook is about $1.2 trillion, according to earnings reported this week, more than 25 percent higher than the figure just as the pandemic started to bite in 2020. In less than a week, those five giants make more in sales than McDonald’s does in a year.The U.S. economy is cranking back from 2020, when it contracted for the first time since the financial crisis. But for the tech giants, the pandemic hit was barely a blip. It’s a fantastic time to be a titan of U.S. technology — as long as you ignore the screaming politicians, the daily headlines about killing free speech or dodging taxes, the gripes from competitors and workers, and the too-many-to-count legal investigations and lawsuits.America’s technology superpowers aren’t making bonkers dollars in spite of the deadly coronavirus and its ripple effects through the global economy. They have grown even stronger because of the pandemic. It’s both logical and slightly nuts.The wildly successful last year also raises uncomfortable questions for tech company bosses, the public and elected officials already peeved about the industry: Is what’s good for Big Tech good for America? Or are the tech superstars winning while the rest of us are losing?Americans have more money in their pockets thanks to government stimulus checks and pandemic savings, and the tech giants are getting a significant share. Their combined revenue is equivalent to roughly 5 percent of the gross domestic product of the United States.Big Tech’s pandemic big bucks have an understandable root cause: We needed its services.People gravitated to Facebook’s apps to stay in touch and entertained, and businesses wanted to pay Facebook and Google, which Alphabet owns, to help them find customers who were stuck at home. People preferred to buy diapers and deck chairs from Amazon rather than risk their health shopping in stores. Companies loaded up on software from Microsoft as their businesses and work forces went virtual. Apple’s laptops and iPads become lifelines for office workers and schoolchildren.Before the pandemic, America’s technology superpowers were already influential in how we communicated, worked, stayed entertained and shopped. Now they are practically unavoidable. Investors have scooped up Big Tech shares in a bet that these companies are nearly invincible.“They were already on the way up and had been for the best part of a decade, and the pandemic was unique,” said Thomas Philippon, a professor of finance at New York University. “For them it was a perfect positive storm.”Times weren’t so good for these companies in the last economic rough patch. In the downturn from 2007 to 2009, Microsoft’s sales dropped slightly, and its stock price fell 60 percent from the fall of 2008 to March 2009, a low point for U.S. stocks. Google and Amazon each lost as much as two-thirds of their market value.One sign of how this time is different: Amazon’s revenue is growing much faster in 2021 than it did in 2009, when the company was one-fifteenth its current size. Sales in the first quarter rose 44 percent from a year earlier, and Amazon’s profits before taxes — which have never been exactly robust — more than doubled to $8.9 billion. Businesses are addicted to Amazon’s cloud computer services, where sales rose 32 percent, and shoppers can’t live without Amazon’s delivery. Investors love Amazon, too. The company’s stock market value has nearly doubled since the beginning of 2020 to $1.8 trillion.For the other tech giants, it’s as if their brief pandemic nosedive never happened. Advertising sales typically rise and fall with the economy. But as other types of ad spending shrank when the U.S. economy contracted last year, ad sales rose for Google and Facebook. The growth was even better for them in the first three months of this year.A year ago, analysts worried that Apple would be crippled as the pandemic gripped China, which is the hub of the company’s manufacturing operations and its most important consumer market. The fears didn’t last long. In the first three months of 2021, Apple’s revenue from selling iPhones increased at the fastest rate since 2012. Sales in mainland China, Taiwan and Hong Kong nearly doubled from a year earlier.Apple’s revenue from iPhone sales in the first three months of the year rose at the fastest pace since 2012.Agence France-Presse — Getty ImagesThe tech giants are not the only companies rallying in dark times. America’s big banks have also been on a tear. So have some younger technology companies, such as Snap and Zoom, the maker of the pandemic-favorite videoconferencing app. The crisis forced all sorts of businesses to go digital fast in ways that could help them thrive. Restaurants invested in online sales and delivery, and doctors went full bore into telemedicine.But the dictionary doesn’t have enough superlatives to describe what’s happening to the five biggest technology companies. It’s all a bit awkward, really. It’s rocket fuel for critics, including some regulators and lawmakers in Europe and the United States, who say the tech giants crowd out newcomers and leave everyone worse off.Big Tech companies say they face stiff competition that leads to better products and lower prices, but their bank statements might suggest otherwise. Facebook’s profit margins are higher now than they were before the pandemic.Some of their success is explained by the peculiarities of the pandemic economy. Some people and sectors are doing awesome, while other families are lining up at food banks and while companies like airlines are begging for cash. Unlike the stock market clobbering in the Great Recession, stock indexes in the United States have reached new highs.The tech superstars have also capitalized on this moment. Alphabet and Facebook have used the pandemic to cut back in places that matter less, such as promotional costs and travel and entertainment budgets. And the tech giants have generally increased spending in areas that extend their advantages.Alphabet is now spending more on big-ticket projects, like building computer complexes, than Exxon Mobil spends to dig oil and gas out of the ground. Amazon’s work force has expanded by more than 470,000 people since the end of 2019. That deepens the moat separating the tech superstars from everyone else.Big Tech is emerging from the pandemic lean, mean and ready for a U.S. economy expected to roar back to life in 2021. Meanwhile, there are still long lines at food banks. Some American workers who lost their jobs last year may never get them back. Housing advocates are worried that millions of people will be evicted from their homes. And being Big Tech is an invitation for everyone to hate you — but you do have towering piles of money. More

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    Fear of Inflation Finds a Foothold in the Bond Market

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    There is little evidence for a big jump in prices, but some economists and bond investors fear President Biden’s policies could lead to inflation.The so-called bond vigilantes may be back, 30 years after they led a sell-off in Treasury securities over the prospect of higher government spending by a new Democratic administration.The Federal Reserve has downplayed the risk of inflation, and many experts discount the danger of a sustained rise in prices. But there is an intense debate underway on Wall Street about the prospects for higher inflation and rising interest rates.Yields on 10-year Treasury notes have risen sharply in recent weeks, a sign that traders are taking the inflation threat more seriously. If the trend continues, it will put bond investors on a collision course with the Biden administration, which recently won passage of a $1.9 trillion stimulus bill and wants to spend trillions more on infrastructure, education and other programs.The potential confrontation made some market veterans recall the 1990s, when yields on Treasury securities lurched higher as the Clinton administration considered plans to increase spending. As a result, officials soon turned to deficit reduction as a priority.Ed Yardeni, an independent economist, coined the term bond vigilante in the 1980s to describe investors who sell bonds amid signs that fiscal deficits are getting out of hand, especially if central bankers and others don’t act as a counterweight.As bond prices fall and yields rise, borrowing becomes more expensive, which can force lawmakers to spend less.“They seem to mount up and form a posse every time inflation is making a comeback,” Mr. Yardeni said. “Clearly, they’re back in the U.S. So while it’s fine for the Fed to argue inflation will be transitory, the bond vigilantes won’t believe it till they see it.”Yields on the 10-year Treasury note hit 1.75 percent last week before falling back this week, a sharp rise from less than 1 percent at the start of the year.Not all the sellers necessarily oppose more government spending — some are simply acting on a belief that yields will move higher as economic activity picks up, or jumping on a popular trade. But the effect is the same, pushing yields higher as prices for bonds fall.Yields remain incredibly low by historical standards and even recent trading. Two years ago, the 10-year Treasury paid 2.5 percent — many bond investors would happily welcome a return to those yields given that a government note bought today pays a relative pittance in interest. And during the Clinton administration, yields on 10-year Treasurys rose to 8 percent, from 5.2 percent between October 1993 and November 1994.Still, Mr. Yardeni believes the bond market is saying something policymakers today ought to pay attention to.“The ultimate goal of the bond vigilante is to be heard, and they are blowing the whistle,” he said. “It could come back to bite Biden’s plans.”Yet evidence of inflation remains elusive. Consumer prices, excluding the volatile food and energy sectors, have been tame, as have wages. And even before the pandemic, unemployment plumbed lows not seen in decades without stoking inflation.Indeed, the bond vigilantes remain outliers. Even many economists at financial firms who expect faster growth as a result of the stimulus package are not ready to predict inflation’s return.“The inflation dynamic is not the same as it was in the past,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago. “Globalization, technology and e-commerce all make it harder for firms to increase prices.”What’s more, with more than nine million jobs lost in the past year and an unemployment rate of 6.2 percent, it would seem there is plenty of slack in the economy.That’s how Alan S. Blinder, a Princeton economist who was an economic adviser to President Bill Clinton and is a former top Fed official, sees it. Even if inflation goes up slightly, Mr. Blinder believes the Fed’s target for inflation, set at 2 percent, is appropriate.“Bond traders are an excitable lot, and they go to extremes,” he said. “If they are true to form, they will overreact.”Indeed, there have been rumors of the bond vigilantes’ return before, like in 2009 as the economy began to creep out of the deep hole of the last recession and rates inched higher. But in the ensuing decade, both yields and inflation remained muted. If anything, deflation was a greater concern than rising prices.It is not just bond traders who are concerned. Some of Mr. Blinder’s colleagues from the Clinton administration are warning that the conventional economic wisdom hasn’t fully accepted the possibility of higher rates or an uptick in prices..css-yoay6m{margin:0 auto 5px;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}@media (min-width:740px){.css-yoay6m{font-size:1.25rem;line-height:1.4375rem;}}.css-1dg6kl4{margin-top:5px;margin-bottom:15px;}.css-k59gj9{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-flex-direction:column;-ms-flex-direction:column;flex-direction:column;width:100%;}.css-1e2usoh{font-family:inherit;display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-box-pack:justify;-webkit-justify-content:space-between;-ms-flex-pack:justify;justify-content:space-between;border-top:1px solid #ccc;padding:10px 0px 10px 0px;background-color:#fff;}.css-1jz6h6z{font-family:inherit;font-weight:bold;font-size:1rem;line-height:1.5rem;text-align:left;}.css-1t412wb{box-sizing:border-box;margin:8px 15px 0px 15px;cursor:pointer;}.css-hhzar2{-webkit-transition:-webkit-transform ease 0.5s;-webkit-transition:transform ease 0.5s;transition:transform ease 0.5s;}.css-t54hv4{-webkit-transform:rotate(180deg);-ms-transform:rotate(180deg);transform:rotate(180deg);}.css-1r2j9qz{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-e1ipqs{font-size:1rem;line-height:1.5rem;padding:0px 30px 0px 0px;}.css-e1ipqs a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;}.css-e1ipqs a:hover{-webkit-text-decoration:none;text-decoration:none;}.css-1o76pdf{visibility:show;height:100%;padding-bottom:20px;}.css-1sw9s96{visibility:hidden;height:0px;}#masthead-bar-one{display:none;}#masthead-bar-one{display:none;}.css-1cz6wm{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;font-family:’nyt-franklin’,arial,helvetica,sans-serif;text-align:left;}@media (min-width:740px){.css-1cz6wm{padding:20px;width:100%;}}.css-1cz6wm:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1cz6wm{border:none;padding:20px 0 0;border-top:1px solid #121212;}Frequently Asked Questions About the New Stimulus PackageThe stimulus payments would be $1,400 for most recipients. Those who are eligible would also receive an identical payment for each of their children. To qualify for the full $1,400, a single person would need an adjusted gross income of $75,000 or below. For heads of household, adjusted gross income would need to be $112,500 or below, and for married couples filing jointly that number would need to be $150,000 or below. To be eligible for a payment, a person must have a Social Security number. Read more. Buying insurance through the government program known as COBRA would temporarily become a lot cheaper. COBRA, for the Consolidated Omnibus Budget Reconciliation Act, generally lets someone who loses a job buy coverage via the former employer. But it’s expensive: Under normal circumstances, a person may have to pay at least 102 percent of the cost of the premium. Under the relief bill, the government would pay the entire COBRA premium from April 1 through Sept. 30. A person who qualified for new, employer-based health insurance someplace else before Sept. 30 would lose eligibility for the no-cost coverage. And someone who left a job voluntarily would not be eligible, either. Read moreThis credit, which helps working families offset the cost of care for children under 13 and other dependents, would be significantly expanded for a single year. More people would be eligible, and many recipients would get a bigger break. The bill would also make the credit fully refundable, which means you could collect the money as a refund even if your tax bill was zero. “That will be helpful to people at the lower end” of the income scale, said Mark Luscombe, principal federal tax analyst at Wolters Kluwer Tax & Accounting. Read more.There would be a big one for people who already have debt. You wouldn’t have to pay income taxes on forgiven debt if you qualify for loan forgiveness or cancellation — for example, if you’ve been in an income-driven repayment plan for the requisite number of years, if your school defrauded you or if Congress or the president wipes away $10,000 of debt for large numbers of people. This would be the case for debt forgiven between Jan. 1, 2021, and the end of 2025. Read more.The bill would provide billions of dollars in rental and utility assistance to people who are struggling and in danger of being evicted from their homes. About $27 billion would go toward emergency rental assistance. The vast majority of it would replenish the so-called Coronavirus Relief Fund, created by the CARES Act and distributed through state, local and tribal governments, according to the National Low Income Housing Coalition. That’s on top of the $25 billion in assistance provided by the relief package passed in December. To receive financial assistance — which could be used for rent, utilities and other housing expenses — households would have to meet several conditions. Household income could not exceed 80 percent of the area median income, at least one household member must be at risk of homelessness or housing instability, and individuals would have to qualify for unemployment benefits or have experienced financial hardship (directly or indirectly) because of the pandemic. Assistance could be provided for up to 18 months, according to the National Low Income Housing Coalition. Lower-income families that have been unemployed for three months or more would be given priority for assistance. Read more.Robert E. Rubin, Mr. Clinton’s second Treasury secretary, echoed that concern but took pains to support the stimulus package.“There is a deep uncertainty,” Mr. Rubin said in an interview. “We needed this relief bill, and it served a lot of useful purposes. But we now have an enormous amount of stimulus, and the risks of inflation have increased materially.”Mr. Rubin acknowledged that predicting inflation was very difficult, but he said policymakers ought to be ready to fight it. “If inflationary pressures do take off, it’s important to get ahead of them quickly before they take on a life of their own.”The Federal Reserve has plenty of options. Not only is it buying up debt, which keeps yields down, but the Fed chair, Jerome H. Powell, has called for keeping monetary policy relatively loose for the foreseeable future. If higher prices do materialize, the Fed could halt asset purchases and raise rates sooner.“We’re committed to giving the economy the support that it needs to return as quickly as possible to a state of maximum employment and price stability,” Mr. Powell said at a news conference last week. That help will continue “for as long as it takes.”While most policymakers expect faster growth, falling unemployment and a rise in inflation to above 2 percent, they nonetheless expect short-term rates to stay near zero through 2023.But the Fed’s ability to control longer-term rates is more limited, said Steven Rattner, a veteran Wall Street banker and former New York Times reporter who served in the Obama administration.“At some point, if this economy takes off bigger than any one of us expect, the Fed will have to raise rates, but it’s not this year’s issue and probably not next year’s issue,” he said. “But we are in uncharted waters, and we are to some extent playing with fire.”The concerns about inflation expressed by Mr. Rattner, Mr. Rubin and others has at least a little to do with a generational angst, Mr. Rattner, 68, points out. They all vividly remember the soaring inflation of the 1970s and early 1980s that prompted the Fed to raise rates into the double digits under the leadership of Paul Volcker.The tightening brought inflation under control but caused a deep economic downturn.“People my age remember well the late 1970s and 1980s,” Mr. Rattner said. “I was there, I covered it for The Times, and lived through it. Younger people treat it like it was the Civil War.”Some younger economists, like Gregory Daco of Oxford Economics, who is 36, think these veterans of past inflation scares are indeed fighting old wars. Any rise in inflation above 2 percent is likely to be transitory, Mr. Daco said. Bond yields are up, but they are only returning to normal after the distortions caused by the pandemic.“If you have memories of high inflation and low growth in the 1970s, you may be more concerned with it popping up now,” he said. “But these are very different circumstances today.” More

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    Bernadette Bartels Murphy, Pioneering Wall Street Trader, Dies at 86

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    Starting out as a secretary, she became a sought-after financial adviser in a male world and found a national platform for her views on public television.Bernadette Bartels Murphy, a rare woman on Wall Street in the 1950s whose work as a trader helped legitimize a once-derided approach to anticipating market trends, making her a respected voice in the financial world and giving her a platform on television, died on March 3 in Nyack, N.Y. She was 86.Her death was confirmed by her niece Mary Ann Bartels. Ms. Murphy died at her niece’s home.Ms. Murphy began her career at the investment bank Ladenburg Thalmann & Co. as a secretary — one of the few roles then available to women in the financial industry. But over time she became a trader and analyst who found a national audience as a regular panelist on Louis Rukeyser’s long-running “Wall Street Week,” a public television side gig of hers for 25 years.Toiling as a secretary, Ms. Murphy found that it was the work of the traders on her desk that interested her more. She began studying the movements of stocks and the overall market as a way to anticipate future trends, an approach known as technical analysis.At the time, that method of anticipating market movements was looked down on by traditionalists, who favored an approach called fundamental analysis: forecasting a shift in a stock price by gleaning the intrinsic value of a company and its shares. They referred, often derisively, to technical analysts as “chartists,” for the graphs and data tables they pored over to make their forecasts.“I had to keep my charts in the bottom drawer of my desk,” Ms. Murphy recalled in a 1992 interview with an industry magazine. “In those days, technical analysis was not considered an acceptable discipline, not in a conservative firm.”To learn more, she took classes at the New York Institute of Finance and began creating her own charts. She used the trading floor around her as her training ground, soaking up information on the interactions between the various markets her firm worked in, like corporate and municipal bonds, equities and trade orders from overseas. (After Ladenburg she went on to work for two more Wall Street firms.)She also started sharing her ideas with co-workers and industry contacts in a newsletter, “This Is What I Think,” which became her calling card, prompting clients of her firm to ask her bosses for her views on trades they were considering. By the early 1970s, she was monitoring stock portfolios for customers and sharing her forecasts with them.Her breakout moment came in 1973, when a market crash and global economic crisis sent stocks tumbling in a 21-month-long swoon.“My readings were very accurate,” Ms. Murphy said in the book “Women of the Street: Making it on Wall Street — The World’s Toughest Business” (1998), by Sue Herera. She anticipated, for example, a sharp plunge in a popular group of stocks known as the “nifty 50,” which included household names like Coca-Cola and Polaroid.“My timing was right, my anticipation of what was going to happen to stocks was on the money, so I started getting phone calls from institutions and invitations to lunch,” Ms. Murphy said in the book. “And that’s how my business began to build.”Ms. Murphy, who encouraged women to pursue Wall Street careers, appeared on the cover of a business publication for women in 1994. via Murphy familyShe started appearing on “Wall Street Week,” which aired on Friday evenings, in 1979.Within the industry, Ms. Murphy was known for her contributions to trade groups and civic organizations. She was, at various times, the president of the Chartered Market Technicians Association, the New York Society of Security Analysts and the Financial Women’s Association. She was a founding member and governor of the Chartered Financial Analyst Institute, a trustee of Pace University and a board member of the American Lung Association of New York City.“Everyone who belonged to an organization always tried to get Bernadette to join, which she often did, being a social bee,” said Sheila Baird, a founding partner of the investment firm Kimelman & Baird, where Ms. Murphy worked as the chief market analyst for many years.Bernadette Bartels was born on April 9, 1934, on City Island in the Bronx to Joseph Francis Bartels, a stationary engineer (maintaining industrial machinery and systems), and Julia (Flynn) Bartels, a nurse. She was the youngest of four children. She is survived by her sister, Julia Campbell. She earned a bachelor’s degree in history from Our Lady of Good Counsel (now part of Pace University) in White Plains, N.Y. She credited her father with urging her to use her education to pursue a career.“I certainly knew that before I married I was going to accomplish something. That was my driving force,” she told Ms. Herera. “I wanted to be a fulfilled person, confident in myself.”In 1982 she married Eugene Francis Murphy, whom she had met on Tiana Beach in Hampton Bays, N.Y., after he rescued her from a riptide. Dr. Murphy, an orthodontist, died in 1997.Ms. Murphy, who retired from Kimelman & Baird in 2015, encouraged women to pursue Wall Street careers, whether she was speaking at high schools or colleges or informally among friends and family. One of them was her niece, Mary Ann Bartels, who became a managing director at Bank of America.Ms. Bartels recalled a story Ms. Murphy often told. As a child, she said, she stopped at a waterside arcade on City Island and put a coin in a vending machine to get her horoscope. “It said her element was fire, her color was red and that, ‘You are an Aries, the ram — a trailblazer and pioneer,’” Ms. Bartels said. “She told us that story so many times, and she really lived by that every day.”Sheelagh McNeill contributed research. More