Every afternoon we provide an update on global market levels, economic news, and hedge fund news.
Post Market Update
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
- US: Dow: 12632.00 (-0.50%), S&P 500: 1330.66 (-0.57%), NASDAQ: 2893.76 (-0.30%)
- Europe: CAC: 3039.27 (-0.62%), DAX: 6401.06 (-0.80%), FTSE: 5437.62 (-0.51%).
- Asia-Pacific: Australia: 4266.30 (-0.71%), China: 2374.84 (-0.25%), Hong Kong: 19894.31 (0.80%), India: 4942.80 (0.71%), Japan: 8900.74 (-0.82%).
- Metals: Gold: 1557.10 (-0.25%), Silver: 28.08 (-0.96%), Copper: 3.52 (-1.03%)
- Energy: Crude Oil: 93.98 (-0.84%), Natural Gas: 2.50 (2.84%)
- Commodities: Corn: 5.97 (2.44%), Soya Bean: 13.05 (0.79%), Wheat: 6.08 (1.71%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2729 (0.78%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5994 (0.65%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 80.1750 (0.40%)
- 10 year US Treasury: 1.767% (0.005)
Market and Economy News Update
U.S. markets end lower: U.S. markets fell on Tuesday, closing at three-month lows, amid investor concerns over Greece’s potential exit from the euro zone and the health of the its banks. The Dow Jones Industrial Average (INDEXDJX:.DJI) slipped 0.50 percent, to close at 12,632.00. The S&P 500 (INDEXSP:.INX) declined 0.57 percent to end at 1,330.66, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) erased 0.30 percent to finish at 2,893.76.
Oil prices fall to five month low: Oil prices tumbled to the lowest level in five months as attempts to form a government in Greece failed, resulting in the country heading back to polls. Crude oil for June delivery fell 0.8 percent, to settle at $93.98 a barrel on the New York Mercantile Exchange. Brent oil for June settlement gained 0.6 percent to $112.24 a barrel on the London-based ICE Futures Europe exchange.
Company News Update
- The U.S. Justice Department has opened an investigation into JPMorgan Chase & Co. (NYSE:JPM)’s $2 billion trading loss at its London office. The Securities and Exchange Commission has already started a separate inquiry.
- Standard & Poor’s lowered Chesapeake Energy Corporation (NYSE:CHK)‘s credit rating from BB to BB-, citing “mounting turmoil” amid concerns about corporate governance practices
- Activist investor Ralph Whitworth’s Relational Investors LLC has acquired a $600 million stake in PepsiCo, Inc. (NYSE:PEP), a move which could ramp up pressure on the beverage and snack giant.
- Department store operator J. C. Penney Company, Inc. (NYSE:JCP) posted first quarter earnings excluding items loss of 25 cents a share on revenue of $3.15 billion that widely missed analysts’ estimates of earnings excluding items loss of 11 cents a share on revenue of $3.41 billion. The Texas-based company also discontinued its quarterly dividend.
- Discount retailer The TJX Companies, Inc. (NYSE:TJX) posted better than expected first quarter earnings, helped by higher sales and expense leverage, and raised its earnings guidance.
- Upscale department store chain Saks Inc (NYSE:SKS) reported first quarter earnings excluding one time items of 19 cents a share, topping analysts’ estimates, but sales came in well below street expectations.
- Cellcom Israel Ltd. (NYSE:CEL), Israel’s largest mobile-phone company, said first quarter profit fell 44 percent as growing competition continued to drive prices lower.
- Arctic Cat Inc (NASDAQ:ACAT), the snowmobile maker, posted a smaller than expected fourth quarter loss, but forecast full year sales that missed analysts’ estimates.
- DynaVox, Inc. (NASDAQ:DVOX), the seller of speech software for people with learning disabilities, reported third quarter earnings that trailed analysts’ estimates, and said it will suspend its policy of providing financial guidance.
- Patriot Coal Corporation (NYSE:PCX) cut a week-old forecast for sales of steelmaking coal mined in Appalachia, citing a potential default by a key customer.
Hedge Fund News Update
- The GlobeOp Hedge Fund Performance Index, the newly launched index which tracks the performance of hedge funds administered by GlobeOp, was up 0.51 percent in April, taking the year to date performance to 3.66 percent.
- New York-based Moore Capital Management LLC increased its stake in JPMorgan Chase & Co. (NYSE:JPM), just before the stock plunged following a $2 billion trading loss on May 10. The $15 billion hedge fund founded by Louis Moore Bacon, bought about 6 million shares of JPMorgan in the first quarter.
- Barry Rosenstein’s Jana Partners acquired 3.2 million shares of DirecTV (NASDAQ:DTV), the largest U.S. satellite-TV provider, valued at about $158 million as of March 31, and offloaded its stake in Google Inc (NASDAQ:GOOG), according to a regulatory filing today.
- Appaloosa Management LP, the hedge fund run by David Allan Tepper, substantially increased its stake in Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT), and bought new stakes in Bank of America Corp (NYSE:BAC) and Citigroup Inc. (NYSE:C) in the first quarter, according to the firm’s first quarter disclosures statement filed with the Securities and Exchange Commission.
- Hedge-fund firm Paulson & Co. which owns 37.6 million shares, or an 8.5 percent stake in property-casualty and life insurance conglomerate The Hartford Financial Services Grup Inc. (NYSE:HIG), is stepping back from its activist role, according to a regulatory filing.
- According to a filing with the U.S. Securities and Exchange Commission today, Eric Mindich’s Eton Park Capital Management LP increased its stake in YPF SA (ADR) (NYSE:YPF) in the first quarter before the Argentinian government took control of the oil producer from Spain’s Repsol YPF SA (MCE:REP).
- Greece has agreed to repay in full holders of 435 million euros of floating rate notes that were due to mature today. New York hedge fund Elliott Associates is believed to hold a significant proportion of the floating rate notes.
- Barclays PLC (NYSE:BCS) is preparing to launch the Barclays Credit Opportunities Strategy in the third quarter, which will be a long/short fund, to be managed by Bruce Ivory, the former Citadel analyst.
Brokerage Upgrades and Downgrades on Tuesday, May 14, 2012
- Amedisys Inc (NASDAQ:AMED) was upgraded to “neutral” from “underperform” at Robert W. Baird with a target price of $10.
- Colgate-Palmolive Company (NYSE:CL) was raised to “buy” from “hold” at Argus with a target price of $118.
- Gentiva Health Services, Inc. (NASDAQ:GTIV) was upgraded to “neutral” from “underperform” at Robert W. Baird with a target price of $6.
- The Hartford Financial Services Grup Inc. (NYSE:HIG) was raised to “buy” from “sector hold” at Stifel Nicolaus with a target price of $24.
- MIPS Technologies, Inc. (NASDAQ:MIPS) was upgraded to “buy” from “hold” at The Benchmark Company with a target price of $10.
- Quality Systems, Inc. (NASDAQ:QSII) was raised to “buy” from “hold” at Auriga with a target price of $37.