Every afternoon ValueWalk provides an update on global market levels, economic news, and hedge fund news.
* US: Dow: 13060.14 (-0.11%), S&P 500: 1398.08 (-0.06%), NASDAQ: 3080.50 (0.40%)
Abacab Fund Sees Mispricing In Options As Black-Scholes Has Become “Inadequate”
Abacab Asset Management's flagship investment fund, the Abacab Fund, had a "very strong" 2020, returning 25.9% net, that's according to a copy of the firm's year-end letter to investors, which ValueWalk has been able to review. Commenting on the investment environment last year, the fund manager noted that, due to the accelerated adoption of many Read More
* Europe: CAC: 3319.81 (0.19%), DAX: 6775.26 (-0.13%), FTSE: 5723.67 (0.35%).
* Asia-Pacific: Australia: 4319.80 (-0.33%), China: 2302.24 (1.71%), Hong Kong: 20593.00 (-0.96%), India: 5322.90 (0.00%), Japan: 9767.61 (-0.53%).
* Metals: Gold: 1630.10 (0.99%), Silver: 31.73 (2.21%), Copper: 3.80 (0.13%)
* Energy: Crude Oil: 103.31 (1.81%), Natural Gas: 2.09 (-2.43%)
* Commodities: Corn: 6.58 (0.23%), Soya Bean: 14.34 (1.02%), Wheat: 6.38 (-0.12%)
* Currency: EUR/USD: 1.3065 (0.59%), GBP/USD: 1.5829 (0.41%), USD/JPY: 82.3050 (-0.13%)
* 10 year US Treasury: 2.181% (-0.043)
Market and Economy News Update
U.S. markets end mixed: Markets ended the day largely unchanged, capping the biggest weekly decline of the year. Trading volumes were lackluster, as investors were hesitant to jump in ahead of Friday’s monthly jobs report. The Dow Jones Industrial Average (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX) ended the day marginally in the red, while the NASDAQ (INDEXNASDAQ:.IXIC) closed 0.4 percent higher.
Oil jumps: Oil prices rallied on Thursday, after previous session’s selloff, as claims for U.S. unemployment benefits fell to a four-year low, raising hopes that demand for energy will increase in the world’s leading user of crude. Crude for May delivery gained 1.6 percent on the New York Mercantile Exchange. Brent oil for May settlement rose 0.9 percent on the London-based ICE Futures Europe exchange.
Gold up 1 percent: Gold rose on Thursday, rebounding from its biggest two-day drop in a month, as investors wound up short positions. Prices found support at the key technical level of $1600. Gold for June delivery rallied 1 percent, to end at $1,630.10 an ounce on the Comex division of the New York Mercantile Exchange.
Company News Update
* Apple Inc. (NASDAQ:AAPL) gained 1.5 percent to $633.68, after Jefferies increased its price target on the firm to $800 from $699.
* Alcoa Inc. (NYSE:AA) and General Electric Company (NYSE:GE) were the biggest laggards on the Dow Jones Industrial Average, slipping 1.8 percent and 1.3 percent respectively.
* Several major retailers reported same-store sales for March that beat analysts’ forecasts. Macy’s, Inc. (NYSE:M) said same-store sales increased 7.3 percent in March compared with the same month last year. Target Corporation (NYSE:TGT), the second-largest U.S. discount chain, posted a better than expected 7.3 percent increase in same-store sales. The Gap Inc. (NYSE:GPS), the largest U.S. apparel chain, reported a jump of 8 percent in March same-store sales. Analysts were expecting a 4.6 percent rise. https://www.valuewalk.com/2012/04/target-corporation-tgt-webster-collection-to-hits-stores-in-may-profits-rise-7-3/,
* The TJX Companies, Inc. (NYSE:TJX). rose 2.4 percent after reporting that its March same-store sales rose 10 percent, beating Wall Street expectations.
* Constellation Brands, Inc. (NYSE:STZ), the world’s largest wine company, fell 12.5 percent after the company reported a drop in revenue and forecast full-year profit that was below analysts’ estimates.
* First Solar, Inc. (NASDAQ:FSLR) fell 3.5 percent to $20.98, after the biggest maker of thin-film solar panels had its share-price target lowered to $20 from $35 by JPMorgan Chase & Co.
* Polycom Inc (NASDAQ:PLCM), the maker of videoconference systems, dropped 20 percent after it forecast first-quarter earnings that was much below the average analyst estimate. The company said it expects first-quarter revenue of $364 million to $370 million.
* Facebook will list under the Nasdaq and will have the ticker symbol “FB”.https://www.valuewalk.com/2012/04/facebook-fb-to-be-listed-on-nasdaq-omx-group-inc-dnaq/
Hedge Fund News Update
* The London-based BlueGold Capital, one of the world’s largest commodity hedge funds, told investors that it is liquidating its portfolio and returning the money. BlueGold, whose assets swelled to reach a peak of $2.4bn a year ago, was launched in February 2008 by former Vitol oil trading stars Pierre Andurand and Dennis Crema.
* Yahoo’s largest shareholder, Third Point LLC, run by hedge fund manager Dan Loeb, said it was disappointed that the latest job cuts at the internet company occurred before Chief Executive Scott Thompson laid out his strategic plan for the company. https://www.valuewalk.com/2012/04/yahoo-inc-yhoo-to-cut-2000-jobs/
* Hedge fund manager Phil Falcone said he is considering bankruptcy as one of the options for his wireless network company LightSquared Inc. https://www.valuewalk.com/2012/04/lightsquared-battle-of-the-titans-carl-icahn-vs-phil-falcone/
* Greenwich, Connecticut-based hedge fund, Strategic Value Partners LLC, along with a group of other lenders, is planning to put together a bid for plastic-packaging maker Klockner Pentaplast Group, owned by U.S. private-equity firm Blackstone Group LP (NYSE:BX) since 2007.
* Ben Lambert, senior banks analyst at London-based hedge fund firm, Odey Asset Management, resigned this week. Odey is famous for its bets on the banking sector during the financial crisis.
* SG Alpha, the emerging Europe-focused long/short equity manager, has launched a dedicated Ukraine hedge fund. The SG Alpha Ukraine Fund launched on April 2, aims to profit from the country’s low price/earnings ratios and a possible free-trade agreement with the European Union.
* Adam Leitzes, director at Tiger Management LLC, is planning to launch an Asia equity hedge fund in the second quarter. Leitzes has registered his Karst Peak Capital in Hong Kong, and could launch with initial assets of $50 million.