Mid-Day Market Report 12/19/2011


Mid-Day Market Action


  • US:  Dow: 11815.19 (-0.43%), S&P 500: 1211.84 (-0.65%), NASDAQ: 2545.15 (-0.41%)
  • Europe: CAC: 2974.20 (0.06%), DAX: 5670.71 (-0.55%), FTSE: 5364.99 (-0.42%).
  • Asia:Australia: 4060.40 (-2.38%),China: 2218.24 (-0.30%),Hong Kong: 18070.21 (-1.19%),India: 4613.10 (-0.83%),Japan: 8296.12 (-1.27%),Korea: 1776.93 (-3.55%),Singapore: 2618.09 (-1.57%),
  • Metals: Gold: 1592.10 (-0.36%), Silver: 28.86 (-2.72%), Copper: 3.29 (-1.20%)
  • Energy: Crude Oil: 93.46 (-0.05%), Natural Gas: 3.08 (-1.47%)
  • Agriculture: Corn: 5.97 (2.32%), Soya Bean: 11.40 (0.84%), Wheat: 5.96 (2.01%).
  • Currency: EUR/USD: 1.3008 (-0.293%), GBP/USD: 1.5523 (-0.144%), USD/JPY: 77.963 (0.260%)
  • 10 year US Treasury: 1.832% (-0.016)


Seth Klarman Describes His Approach In Rare Harvard Interview

Seth KlarmanIn a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More

Market News Update


US markets erase early gains: US stocks retreated from their early morning highs, after European Central Bank President Mario Draghi said substantial risks remain to the economy. Bank stocks fell in expectation of tighter capital standards. Trading volume was light as many investors were closing their books for the year.




US Home-builder confidence rises for the third consecutive month: The National Association of Home Builders/Wells Fargo Index of builder confidence climbed to 21, the highest level since May 2010. This is mainly on account of low borrowing costs, which are attracting prospective home buyers.




European ministers discuss $261 billion IMF funds: EU ministers were locked in a three-hour teleconference call to discuss 200 billion euros ($261 billion) in additional funding through the International Monetary Fund, and the mechanics of a so-called fiscal compact that was negotiated at the December 9 European Union summit. http://www.reuters.com/article/2011/12/19/us-eurozone-idUSTRE7BF0OX20111219


Traders remain cautious on Euro: The euro lost further ground as European Central Bank President Mario Draghi continued to resist pressure to step up bond buying in an effort to ease the sovereign debt crisis. Traders, having already bet aggressively against the euro, remained cautious amid a dearth of new reasons to sell.



Asia falls on news of Kim’s death: Asian markets slumped on Monday, amid fears that the death of North Korean leader, Kim Jong II, Could lead to further crisis, in the already volatile Korean peninsula. Nikkei lost 1.3%, while Hang Seng was down 1.2%. South Korea’s Kospi was the worst affected, ending the day 3.4% down. http://money.cnn.com/2011/12/19/markets/world_markets_kim_jong_il/index.htm


Company News Update


  • Saudi Prince Alwaleed bin Talal invested $300 million in social media company Twitter. He would have a stake of roughly 3.6% in theSan Francisco based company.
  • Super-market owner BI-LO will buy south-eastern US super market operator Winn-Dixie (WINN), for $530 million. Winn-Dixie closed on Friday at $5.43, and BI-LO will pay $9.50 in cash per share of Winn-Dixie stock, translating to a hefty 75% premium.
  • According to Goldman Sachs, Microsoft Corp. (MSFT)’s venture into cloud computing will increase operating expenses, and will hit profit margins for fiscal 2012.
  • Famed Swedish car-maker Saab, filed for bankruptcy, after repeated efforts to find financers failed.
  • British Telecommunications Plc sued internet search engine, Google (GOOG), for allegedly infringing sixU.S. patents for mobile-device technology.
  • In early morning trade, on its second day, Zynga (ZNGA) was down 3.8%, at $9.15.


Hedge Fund News Update


  • Norwegian export financing agency, Eksportfinans ASA, said aU.S. hedge fund investor claimed a default on the company’s Japanese bonds after the Norwegian government announced last month it would wind down the lender.
  • Three of London’s biggest hedge fund, Brevan Howard Asset Management LLP, BlueCrest Capital Management Services Ltd. and Winton Capital Management Ltd., will pay their top partners a total of more than $3 billion this year. The expected payouts are a result of investment successes at the firms, amid the general gloom and doom in the industry.
  • According to an annual survey by the National Association of Pension Funds, UK Pension schemes are pouring money into hedge funds at a faster rate, than into any other asset class.
  • New York City, home to some of the world’s largest hedge funds, has decided to reassess how they collect taxes from hedge funds. Within the existing structure, investment managers normally deduct the same expenses reported on their federal income tax as they do in calculating the income, subject to the 4% unincorporated business tax. But now, New York City Department of Finance is putting a stop to that by disallowing these expense deductions.
  • According to the GAIM USA Survey of Emerging Hedge Fund Managers, done among  90 emerging managers (defined as having $250 million or less in assets under management), found that 61% of the managers expect their portfolios to earn more than 10%, net of fees, while 31% of them expect to earn 15% or more, in 2012.



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