Every afternoon ValueWalk provides an update on global market levels, economic news, and hedge fund news.
Market Action
- US: Dow: 12938.41 (-0.30%), S&P 500: 1361.26 (-0.61%), NASDAQ: 2944.74 (-1.05%)
- Europe: CAC: 3487.54 (-0.39%), DAX: 6866.46 (-0.80%), FTSE: 5874.82 (-0.62%).
- Asia-Pacific:Australia: 4263.00 (-0.24%),China: 2445.00 (-0.64%),Hong Kong: 21265.31 (-1.40%),India: 5280.35 (-1.47%),Japan: 9698.59 (-0.81%)
- Metals: Gold: 1703.50 (-0.37%), Silver: 33.76 (-2.20%), Copper: 3.86 (0.01%)
- Energy: Crude Oil: 106.81 (0.10%), Natural Gas: 2.37 (-4.51%)
- Commodities: Corn: 6.58 (0.57%), Soya Bean: 13.27 (-0.45%), Wheat: 6.71 (-0.41%)
- Currency: EUR/USD: 1.3223 (0.1852%), GBP/USD: 1.5860 (0.1588%), USD/JPY: 81.3465 (-0.5614%)
- 10 year US Treasury: 1.988% (0.014)
Market News Update
U.S. markets dip on China concerns: U.S. stocks fell on Monday afterChina lowered its annual growth target for 2012. As of12 P.M. ET, the Dow Jones industrial average (INDU) lost 68.5 points, or 0.53%, the S&P 500 (SPX) slipped 8.5 points, or 0.62%, and the NASDAQ composite (COMP) declined 25.3 points, or 0.84%.
Factory orders fall in January: The Commerce Department said on Monday new orders forU.S. factory goods dropped in January by the most in over a year as businesses cut orders. Orders for manufactured goods fell 1 percent, the biggest decline since October 2010.
ISM non-manufacturing index rose in February: The Institute for Supply Management’s index of non-manufacturing industries rose to 57.3 in February against 56.8 recorded a month earlier.Readings above 50 signal growth and the index has averaged 53.2 since the recession ended in June 2009. Industries ranging from utilities and retailing to health care and finance are covered by the ISM services survey, and account for almost 90 percent of theU.S. economy.
Foreigners increase their holdings of U.S. government debt to a record $5 trillion: According to government data, amid declining sovereign credit quality, foreigners increased their holdings of U.S. government debt to a record $5 trillion. Led byEurope, international holdings increased 13 percent in 2011, taking their stake to 60.5 percent of the securities not held by the central bank.
Gold slips: Gold fell on Monday as concerns over Chinese growth put pressure on commodities. U.S. gold futures for April delivery were down $5.60 an ounce at $1,704.20.
Natural gas drops 4%: Natural-gas futures prices dropped 4% early Monday, as the latest weather forecasts show above-normal temperatures spreading across most of the U.S. into the second half of March.
Company News Update
- Alcoa (AA) lost 3.6 percent to $9.88 amid worries that slower growth inChina could pressure demand for their products.
- American International Group Inc. ($AIG) rallied 2.3 percent to $30.50. The insurer that received a bailout after the collapse of Lehman Brothers Holdings Inc. is selling $6 billion of AIA Group Ltd. shares to help pay back theU.S. government.
- BP ($BP) shares were higher Monday, after the British oil giant and plaintiffs involved in the legal battle over theGulf of Mexico oil spill said Friday they reached an agreement. BP estimated it would have to pay about $7.8 billion in the Deepwater Horizon disaster settlement.
- Online reviews site Yelp ($YELP) retreated, after spiking 64% to top $24 a share in their debut on the New York Stock Exchange Friday.
- Zynga (ZNGA) tumbled 5.6 percent to $13.86. The company was cut to neutral from overweight by JPMorgan Chase & Co. ($JPM)
- Big Lots Inc. (BIG) climbed 3.4 percent, the biggest advance in the S&P 500, to $44.18. The discount retailer was raised to “buy” from “neutral” at Northcoast Research. The 12-month share-price estimate is $53.
- Walgreen Co’s (WAG) comparable sales fell more than expected in February, the second month that the largest U.S. drugstore chain did not fill prescriptions for patients in the Express Scripts Inc (ESRX) pharmacy benefits network.
- Ford Motor Co. (F), which has plunged in quality rankings, on March 8 will begin sending more than 300,000 owners of the Ford Explorer, Edge, Focus and Lincoln MKX a UBS flash drive loaded with new software to fix problems with MyFord Touch and MyLincoln Touch systems, the company said.
- Yahoo Inc’s (YHOO) new chief executive is preparing a significant restructuring of the Internet company, including layoffs that could cut thousands of employees from its payroll, according to a technology blog.
- Credit Suisse (CSGN.VX) said on Monday it planned to buy back up to 4 billion Swiss francs ($4.4 billion) in outstanding securities in a bid to comply with the new Swiss and Basel III global capital adequacy rules.
Hedge Fund News Update
- Investors pulled $15.2 billion from hedge funds in January 2012, as overall industry assets climbed to $1.70 trillion from $1.68 trillion at end-2011. According to BarclayHedge and TrimTabs Investment Research, hedge funds underperformed the S&P 500 by 110 basis points for the month.
- Assets managed by U.S. hedge funds with $1 billion or more rose by 3% last year to $1.34 trillion, in the most tepid asset growth on record, tempered by disappointing performance. Trade publication AR magazine’s biannual Billion Dollar Club survey, which charted billion dollar shops’ asset size since 2001, said more than 40% of the funds lost assets in 2011, with the majority of the decline occurring in the second half of the year. The AR Composite Index of U.S. hedge fund performance ended the year down 0.47% in its first annual loss since 2008.
- Mike Stewart, the global head of proprietary trading at JPMorgan Chase, is leaving the bank to start his own hedge fund, according to a person with direct knowledge of the matter.
- Tim Gascoigne, who was global head of portfolio management and who ran the $2.4 billion (1.5 billion pounds) GH fund of hedge funds at HSBC Alternative Investments Limited (HAIL), left last month, a spokeswoman for the bank said on Monday.
- The founder of California-based hedge fund, Universa Investments, Mark Spitznagel, will host a fundraising dinner forU.S. Presidential candidate Ron Paul.
- Nashville-based J. Alexander’s Corp. ($JAX) has adopted a shareholder rights plan, otherwise known as a poison pill, as it positions to defend itself against an activist investor. Atlanta-based hedge fund Privet Fund LP, which owns approximately 12.6 percent of the restaurant company, has moved to shake up the company’s board with four nominees for election at the company’s annual shareholder meeting
- New York-based hedge fund Amida Capital Management has hired two former executives from asset manager AM Investment Partners. Sudeep Duttaroy is now a portfolio manager for the firm, while Raymond Lam has come on as a credit analyst.
- Hedge funds took profits in large cap consumer discretionary stocks in the fourth quarter of 2011 and put more money to work in the tech sector, which has been the top performer so far this year. A new report from Credit Suisse analysts shows that the top 50 hedge funds raised their portfolio exposure to the S&P 500 technology stocks to 27 percent in the fourth quarter from 24 percent a quarter.
- AIMA, the hedge fund industry trade body, will hold its annual regulatory forum inHong Kong this week, the organisation has announced.
