Every afternoon we provide an update on global market levels, company news, economic news, and hedge fund news.
Post Market Update
Since the financial crisis, Warren Buffett's Berkshire Hathaway has had significant exposure to financial stocks in its portfolio. Q1 2021 hedge fund letters, conferences and more At the end of March this year, Bank of America accounted for nearly 15% of the conglomerate's vast equity portfolio. Until very recently, Wells Fargo was also a prominent Read More
- US: Dow: 12573.60 (-1.96%), S&P 500: 1325.51 (-2.23%), NASDAQ: 2859.09 (-2.44%)
- Europe: CAC: 3114.22 (-0.39%), DAX: 6343.13 (-0.77%), FTSE: 5566.36 (-1.00%).
- Asia-Pacific: Australia: 4087.60 (-1.08%), China: 2260.88 (-1.42%), Hong Kong: 19265.07 (-1.32%), India: 5165.00 (0.87%), Japan: 8824.07 (0.81%).
- Metals: Gold: 1565.50 (-3.11%), Silver: 26.84 (-5.46%), Copper: 3.30 (-2.64%)
- Energy: Crude Oil: 78.20 (-3.99%), Natural Gas: 2.58 (2.58%)
- Commodities: Corn: 5.50 (-2.91%), Soya Bean: 13.71 (-1.74%), Wheat: 7.00 (-0.81%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2545 (1.26%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5589 (0.77%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 80.3050 (1.06%)
- 10 year US Treasury: 1.618% (-0.039)
Market and Economy News Update
U.S. markets deep in the red: U.S. markets suffered their second worst fall of the year, as a bearish recommendation from Goldman Sachs added to weak U.S. housing and labor market data. Media reports of a Moody’s downgrade of some big banks also helped accelerate declines. The Dow Jones Industrial Average (INDEXDJX:.DJI) dropped 2 percent to 12573.57. The S&P 500 (INDEXSP:.INX) fell 2.2 percent to 1325.51, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) shed 2.4 percent to 2859.09.
Philadelphia Fed index plunges in June: Manufacturing in the Philadelphia region contracted for the second consecutive month in June, amid a decline in new business orders and shipments. The Federal Reserve Bank of Philadelphia’s general economic index, considered a strong barometer of demand, dropped to minus 16.6 in June, from minus 5.8 in May. Economists were expecting a reading of zero.
U.S. existing home sales fell in May: Sales of previously owned U.S. homes fell in May, suggesting an uneven recovery in residential real estate market. Existing-home sales slipped 1.5 percent to a seasonally adjusted annual rate of 4.55 million units in May, the National Association of Realtors said today. Economists were looking for a decrease to an annual rate of 4.57 million units.
Oil prices tumble: Oil prices plunged below $80 a barrel on Thursday as dismal economic data from the United States, China and the eurozone pointed to a global economic slowdown. Crude oil for August delivery slumped 3.99 percent, to settle at $78.20 a barrel on the New York Mercantile Exchange. Brent oil for August settlement dropped 3.7 percent to $89.23 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Moody’s Investors Service downgraded the debt ratings of 15 banks, which included U.S. names like Bank of America Corp (NYSE:BAC), Citigroup Inc. (NYSE:C), Goldman Sachs Group, Inc. (NYSE:GS), JPMorgan Chase & Co. (NYSE:JPM) and Morgan Stanley (NYSE:MS). More on story here.
- Nomura Securities today initiated coverage of Facebook Inc (NASDAQ:FB) with a “buy” rating and a price target of $40.
- Chesapeake Energy Corporation (NYSE:CHK) has named former Chairman of ConocoPhillips (NYSE:COP), Archie Dunham, as its new chairman. Dunham will replace controversial founder Aubrey McClendon.
- Electronics retailer Best Buy Co., Inc. (NYSE:BBY) has increased its dividend by one penny per share to 17 cents.
- Biopharmaceutical company Celgene Corporation (NASDAQ:CELG) withdrew its application to market blood-cancer drug Revlimid in the European Union, following questions from European regulators about the treatment’s links to other cancers.
- The Financial Industry Regulatory Authority has slapped a fine of $2.8 million on Bank of America Corp (NYSE:BAC)’s Merrill Lynch wealth-management unit for over charging customers $32.2 million in fees over an eight year period.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) surged 43 percent in trade today, after the U.S. Food and Drug Administration’s Oncologic Drugs Advisory Committee panel recommended the approval of an experimental blood cancer drug, carfilzomib.
- Oil services company Key Energy Services, Inc. (NYSE:KEG) said second-quarter results will miss prior projections due to a decline in natural gas prices. The company also cut its full-year earnings guidance.
- Diversified manufacturing company 3M Co (NYSE:MMM) has agreed to buy the electronic tolling business of Federal Signal Corporation (NYSE:FSS) for $110 million.
- Nursing-home provider Sun Healthcare Group Inc (NASDAQ:SUNH) soared 37 percent after agreeing to be acquired by privately held rival Genesis Healthcare in a $217 million deal.
- Dry bulk shipper Eagle Bulk Shipping Inc. (NASDAQ:EGLE) closed 31 percent higher after reaching an agreement with a syndicate of its lenders, led by Royal Bank of Scotland Group plc (NYSE:RBS), to restructure its $1.13 billion in debt.
Hedge Fund News Update
- Nelson Peltz‘s Trian Group, which holds a 7.05 percent stake in industrial conglomerate, Ingersoll-Rand PLC (NYSE:IR), turned down a board seat; a regulatory filing disclosed on Wednesday.
- BlueMountain Capital Management LLC, co-founded by Andrew Feldstein, is helping JPMorgan Chase & Co. (NYSE:JPM) unwind its huge position in the credit-default swap index, which was at the heart of the $2 billion loss last month, Bloomberg reported. Feldstein is a former JPMorgan Chase executive, who helped build the credit-default swaps market.
- According to Pierre Lagrange, who manages the $2bn Long Short Fund at GLG Partners, part of the world’s second-largest hedge fund, Man Group Plc (LON:EMG), trying to keep Greece in the euro was futile and damaging to the bloc.
- New York-based Hyaline Capital Management, founded by former Morgan Stanley proprietary trader, Tony D’Andraia, and FBR Capital Management veteran, Justin Meadlin, will launch its maiden fund next month.
- Investors last month slashed their exposure to hedge funds that invest in Europe, as the sovereign debt crisis, and a slowdown in the region, eroded investor confidence, data from hedge fund tracking firm eVestment|HFN showed.
- Luxembourg, one of the biggest hedge fund domiciles in Europe, saw total hedge fund assets soar to an all-time high of 2.23 trillion euros ($2.8 trillion) at the end of April 2012.
- The $3.3 billion Colorado Fire & Police Pension Association invested around $30 million in a hedge fund managed by Bill Ackman’s Pershing Square Capital Management.
- Todd Esse’s $625-million Sasco Energy Partners fund is up 10 percent this year, at a time when energy funds are going through one of the industry’s most challenging years.
Brokerage Upgrades and Downgrades on Thursday, June 21, 2012
- EQT Corporation (NYSE:EQT) was upgraded to “buy” from “hold” at Deutsche Bank with a target price of $59.
- NIC Inc. (NASDAQ:EGOV) was raised to “buy” rating by analysts at Dougherty & Co.
- MedAssets, Inc. (NASDAQ:MDAS) was lifted to “buy” from “neutral” at UBS AG with a price target of $18.
- NuVasive, Inc. (NASDAQ:NUVA) was upgraded to “outperform” from “market perform” at Wells Fargo & Co.
- Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) was raised to “outperform” from “neutral” at Robert W. Baird. Analysts at Brean Murray also upgraded the stock to “buy” from “neutral” with a price target of $60.
- Seadrill Ltd (NYSE:SDRL) was lifted to “overweight” from “neutral” at HSBC Securities.
- Xylem Inc (NYSE:XYL) was upgraded to “buy” from “neutral” at Janney Montgomery Scott.
- BAE Systems PLC (ADR) (NASDAQ:BAESY) was cut to “neutral” from “buy” at Citigroup.
- Chimera Investment Corporation (NYSE:CIM) was downgraded to “underperform” from “neutral” at Bank of America. The stock was also cut to “neutral” from “outperform” by analysts at Credit Suisse.
- CenterPoint Energy, Inc. (NYSE:CNP) was lowered to “neutral” from “outperform” at Credit Suisse with a target price of $21.
- Overland Storage, Inc. (NASDAQ:OVRL) was cut to “hold” from “speculative buy” at The Benchmark Company.
- Under Armour Inc (NYSE:UA) was downgraded to “neutral” from “buy” at UBS AG with a price target of $105.
- Wright Express Corp (NYSE:WXS) was lowered to “sell” from “neutral” at Citigroup with a target price of $56.
- Zumiez Inc. (NASDAQ:ZUMZ) was cut to “neutral” from “buy” at Roth Capital.