Market Action
- US: Dow: 12704.24 (-0.10%), S&P 500: 1324.77 (0.05%), NASDAQ: 2857.44 (0.32%)
- Europe: CAC: 3376.66 (0.27%), DAX: 6655.63 (0.59%), FTSE: 5796.07 (0.09%).
- Asia:China: 2312.56 (1.92%),Hong Kong: 20739.45 (1.96%),India: 5269.90 (0.65%),Japan: 8876.82 (0.76%)
- Metals: Gold: 1759.10 (0.55%), Silver: 34.12 (0.94%), Copper: 3.78 (-1.59%)
- Energy: Crude Oil: 95.84 (-1.81%), Natural Gas: 2.50 (4.79%)
- Commodities: Corn: 6.41 (-0.12%), Soya Bean: 12.16 (0.08%), Wheat: 6.67 (-0.96%)
- Currency: EUR/USD: 1.3149 (-0.0859%), GBP/USD: 1.5808 (-0.1622%), USD/JPY: 76.1323 (-0.0840%)
- 10 year US Treasury: 1.816% (-0.010)
Market News Update
US markets see-saw: The markets drifted between positive and negative territory as traders analyzed monthly retail sales results, corporate earnings and an upbeat reading on the labor market. As of 12:00 p.m. ET, the Dow Jones Industrial Average slipped 6.8 points, or 0.06%, to 12709, the S&P 500 rose 1.3 points, or 0.1%, to 1325 and the NASDAQ Composite climbed 12.1 points, or 0.42%, to 2860. http://money.cnn.com/2012/02/02/markets/markets_newyork/index.htm?iid=HP_LN
Bernanke warns of threat to economy from Europe: The United States remains within the danger zone of infection from Europe’s debt crisis, but the Federal Reserve will do all it can to shield the U.S. economy from contagion, Fed Chairman Ben Bernanke said Thursday. http://money.cnn.com/2012/02/02/news/economy/bernanke_congress_europe/index.htm?iid=HP_LN
US jobless claims fell last week: Claims for U.S. jobless benefits fell last week and productivity cooled in the fourth quarter, signaling hiring may accelerate as companies reach the limits of how much efficiency they can wring from existing workforces. http://www.foxbusiness.com/economy/2012/02/02/jobless-claims-week/
Retailers post mixed results: Retailers reported mixed sales results in January, offering a signal that American consumers remain cautious amid a weak economic recovery. http://www.cnbc.com/id/46234480
Oil falls to six-week low: Oil fell to a six-week low inNew York as U.S. supplies climbed and fuel demand tumbled. Brent crude in London traded at the biggest premium to the American benchmark grade in 12 weeks.
Company News Update
- Merck (MRK) on Thursday reported weaker-than-expected quarterly sales and predicted relatively flat 2012 results as the No. 2 drugmaker girds for cheaper generic forms of its biggest product, asthma drug Singulair.
- MasterCard (MA) reported a higher quarterly profit as consumers around the world spent more money using credit and debit cards, but a litigation-related charge took a large bite out of its earnings.
- Dow Chemical (DOW) swung to a loss in the fourth quarter as weak demand for plastics and coatings pressured sales.
- Cereal maker Kellogg (K) impressed Wall Street on Thursday by unveiling a stronger-than-expected 23% leap in fourth-quarter profits due to solid North American sales gains.
- Cigna’s (CI) fourth-quarter earnings dropped 37 percent compared to the same period last year, when the managed care provider recorded a $101 million gain related to the completion of an IRS audit.
- Abercrombie & Fitch’s (ANF) stock fell after the clothing retailer reported weak same-store sales for the latest quarter and lowered its earnings guidance.
- Unilever (UN) shares slumped after the maker of Lipton teas, Dove soaps and other consumer products said it had difficulty passing higher raw material costs on to consumers last year, and announced a gloomy outlook for 2012.
- Viacom (VIAB) shares fell after the media giant reported better-than-expected earnings in its fiscal first quarter, but cited ratings weakness and softness in theU.S. television advertising market. Its film division swung to an operating loss in the quarter.
- Green Mountain Coffee Roasters Inc. (GMCR) surged 22 percent to $65.19. The maker of Keurig brand single-cup pods and brewers reported profit that beat analysts’ estimates as sales rose.
Hedge Fund News Update
- Hedge fund moguls and other high-flying capitalists dominate the top of a recently unveiled list of donors to a group supporting Mitt Romney’s bid for the presidency, a reflection of his years as head of Bain Capital as well as his pro-business approach to improving the economy.
- Blackstone Group LP (BX), the world’s largest private-equity firm, said fourth-quarter profit fell 12 percent as performance fees and investment income declined.
- $627 billion global asset management firm, Legg Mason has launched Permal Hedge Strategies Fund, a fixed income focused multi-manager, multi strategy fund of hedge funds, on February 1, 2012.
- Lansdowne Partners, one of Europe’s biggest hedge fund managers, saw its flagship UK fund return 5.7 percent in January, in a sign the industry is benefiting from a rebound in financial markets this year after a torrid 2011.
- Last week hedge funds increased bullish bets to the most in two months as the strong January rally in commodities continued. A total of 97,000 futures and options contracts were added bringing the total to a net long of 979,000 contracts among the 24UStraded commodities that we track in this report. The rise corresponds to a nominal increase of USD 8 billion to 88 billion.
- Strategic Value Partners LLC, the hedge fund founded by Merrill Lynch & Co. veteran Victor Khosla, said it raised $918 million from a distressed-debt fund to invest in underperforming assets. The Strategic Value Special Situations Fund II closed earlier this week at 53 percent above its original target of $600 million, the Greenwich, Connecticut-based asset manager said in a statement today.
- Friedberg Mercantile Group’s flagship fund, Friedberg Global-Macro Hedge Fund Ltd, was down 8.8% in Q4 but was up 40.9% overall for 2011. Comparatively, the Dow Jones Credit Suisse Global Macro index was up 0.38% in 2011. The Cayman-domiciled fund launched in 2001 is a traditional discretionary global macro fund managed by Albert Friedberg. It manages $964.2m and has returned 495% since inception.
- Hedge funds’ growing asset base and supposed ability to provide positive returns in all sorts of market conditions have proved a potent attraction to mutual-fund companies, particularly after the financial crisis in 2008. Morningstar cites more than 300 mutual funds that now offer exposure to alternative strategies that have low market correlation, like equity long/short, market-neutral and managed futures. The category had nearly $132 billion in assets by 2011’s end, a substantial total even though it trails well behind the hedge-fund industry’s roughly $2 trillion.
