Every afternoon ValueWalk provides an update on global market levels, economic news, and hedge fund news.
David Einhorn Buys Three New Stocks: These Are The Names And Theses (Q3 Letter)
David Einhorn's Greenlight Capital funds returned 5.9% in the third quarter of 2020, compared to a gain of 8.9% for the S&P 500 in the same period. This year has been particularly challenging for value investors. Growth stocks have surged as value has struggled. For Greenlight, one of Wall Street's most established value-focused investment funds, Read More
- US: Dow: 12824.39 (0.51%), S&P 500: 1351.09 (0.59%), NASDAQ: 2934.61 (0.83%)
- Europe: CAC: 3392.33 (0.88%), DAX: 6671.11 (0.57%), FTSE: 5791.41 (0.44%).
- Metals: Gold: 1684.30 (0.73%), Silver: 33.44 (2.02%), Copper: 3.77 (0.76%)
- Energy: Crude Oil: 106.00 (1.24%), Natural Gas: 2.30 (-2.21%)
- Commodities: Corn: 6.40 (-2.06%), Soya Bean: 13.29 (-0.47%), Wheat: 6.41 (-2.43%)
- Currency: EUR/USD: 1.3136 (0.19%), GBP/USD: 1.5734 (0.11%), USD/JPY: 81.1000 (0.26%)
- 10 year US Treasury: 1.960% (0.017)
Market News Update
U.S. markets bounce back: U.S. stocks bounced back Wednesday, one day after the biggest one-day sell-off of 2012, as investors were heartened by the latest economic reports. A labor market report signaling that private sector hiring is picking up steam helped bolster sentiment. The Dow Jones industrial average (INDU) added 70 points, or 0.6%. The S&P 500 (SPX) jumped 8 points, or 0.7%. The NASDAQ (COMP) jumped 26 points, or 0.8%, signaling a rebound from U.S. markets’ worst day of the year. http://money.cnn.com/2012/03/07/markets/stocks/index.htm
Greek Bond Swap Edges Closer to Approval: Major banks and pension funds threw their weight behind Greece’s (GREK) bond swap offer to private creditors on Wednesday, raising the likelihood that the deal will go through and a 130 billion euro international bailout package would be secured. A group of 30 banks and funds representing 39.3 percent of Greece’s 206 billion euros of outstanding debt said they would take part in the deal, joining other Greek banks and pension funds which have already pledged to accept the offer.
Crude gains after inventory data: U.S. crude futures extended gains to more than $1 on Wednesday after a government report showed crude stocks rose less than expected last week in theUnited States.U.S. crude was up $1.05, or 1.0 percent, at $105.75 a barrel at11:17 a.m. EST. (OIL)
Gold prices recover: U.S. gold (GLD) futures for April delivery rose 0.78 percent at $1,685.20. The metal is down more than 6 percent since late February, having dropped sharply from the year’s highs after U.S. Federal Reserve Chairman Ben Bernanke held off signaling a further round of U.S. monetary easing in a key speech. https://www.cnbc.com/
Euro rallies: The euro rallied from a two-week low against the dollar as investors with 58 percent of the Greek bonds eligible have indicated they’ll participate in the so- called private-sector involvement of the nation’s bailout. The euro gained 0.2 percent to $1.3142 at1:04 p.m.New York time. It touched $1.3096, the weakest level since Feb. 16.
Company News Update
- Apple (AAPL) has unveiled the next version of its popular iPad a media event today.
- General Electric Co. (GE) increased 2 percent to $18.79. The world’s biggest maker of jet engines, power generation equipment, health-care imaging equipment and locomotives reiterated its forecast of earnings growth of at least 10 percent from industrial and capital units this year.
- Wells Fargo & Co. (WFC), the most valuableU.S. lender, may close or consolidate branches as it examines ways to trim costs, according to its chief financial officer. Wells Fargo could shut branches near each other or move some wealth-management or mortgage employees into those offices, Timothy Sloan said today at aNew York investor conference.
- Samsung Electronics Co said on Wednesday it has filed another lawsuit against Apple Inc (AAPL) in South Korea, claiming the iPhone 4S and iPad2 infringed on three of its patents.
- Netflix (NFLX) shares rose, following reportsthat CEO Reed Hastings is seeking a partnership with a cable company, and has held meetings with several providers in recent days.
- Hovnanian Enterprises Inc. (HOV) increased 3.8 percent to $2.49. The largest homebuilder inNew Jersey reported a narrower first- quarter loss as it reduced writedowns and increased sales. Hovnanian, which has been buying land at distressed prices in an attempt to boost margins, is benefiting from stronger demand forU.S. houses.
- Children’s Place Retail Stores (PLCE) shares dropped, after the company reported a miss on quarterly revenue. The company attributed the results to warmer-than-expected weather that forced sharp markdowns on winter apparel.
- Ciena Corp. (CIEN), a maker of network equipment for phone companies, surged 7.2 percent amid a higher revenue forecast.
- Shares of online radio service Pandora (P) slumped more than 20%, after narrowly missing analyst expectations on quarterly earnings and revenue.
Hedge Fund News Update
- Hedge funds stalking distressed assets in Europemay be left with slim pickings after a trillion-euro cash injection from the European Central Bank (ECB) eased the pressure on banks to dump some of their weaker holdings.
- Former Huatai Asset Management CIO Yang Yang and veteran derivatives trader Yiming Liang have joined the bandwagon of Asian hedge funds with the launch of Greater China-focused macro hedge fund Goldstream Absolute Return Fund, according to a report by Asian Investor. Yang and Liang’s move is very timely asBeijing late last month allowed in principle foreign hedge funds to raise capital in the mainland. That is seen by many industry experts as opening a floodgate of opportunities for capital-starved Asian hedge funds to raise money in that country.
- Brevan Howard is now the world’s top hedge fund manager by annualised net gains, new research suggests, following dramatic losses during 2011 at former number one Paulson & Co. According to data from LCH Investments NV, the Brevan Howard Fund, which employs a global macro strategy, has achieved an average net gain of $1.74bn per year since its launch in 2003, up from an average of $1.56bn at the end of 2010, after seeing its total net gains rise by $3.2bn in 2011. Paulson & Co, which last year led the pack with $1.89bn, fell to a $1.3bn average following a calamitous 12 months in which dramatic underperformance at the New York-based firm saw $9.6bn wiped from its total.
- Carrhae Capital LLP, which launched the Carrhae Capital Master Fund in December 2011, has picked Advent Software as its hedge fund software supplier. Advent’s solution offers real-time dashboards, P&L reports, cash position and transaction reconciliation, and synthetic equity asset class coverage. It is based on the ‘Geneva’ portfolio management and accounting platform.
- Hedge fund manager John Paulson has intensified his campaign for the Hartford Insurance Group to break itself up into separate property and casualty and life businesses by taking the case directly toHartford shareholders. TheHartford’s 2011 fourth-quarter net income plummeted 79 percent to $127 million on above-normal catastrophe and non-cat losses, low-interest rates and volatility in the capital markets.
- Kevin Ershov, former CIO of Thales Fund Management, has set up a hedge fund manager and rolled out the flagship offering this quarter. After forming New York-based Battery Park Asset Management, he launched the onshore and offshore Battery Park Investments and Battery Park Fund. Described as a “quantamental” strategy, the portfolio is a synergy of quantitative models and fundamental research.
- Citi’s mandate to provide full fund valuation services to AHL, Man Group’s $21bn quant hedge fund, will take effect in June this year. The implementation of the deal should boost Citi’s total AuA by around $15bn, with some structured products and managed accounts still administered elsewhere.
- The Gargoyle Group, a US options-trading hedge fund manager, has launched a fund it believes is a first: a market neutral fund hedged with a continually-monitored index options overlay. Gargoyle says the fund employs many of the components of the proprietary methodology employed successfully by its flagship fund, the Gargoyle Hedged Value Fund, for the last 12 years.