The stock markets in the United States ended the week in the red zone as investors were concerned about signs of weakness in China as well as the impact of the reduction of the monthly bond-buying program of the Federal Reserve.
In an interview with Bloomberg yesterday, Eamon Aghdasi, strategist at Societe Generale commented, “The current environment is potentially very toxic for emerging markets. You have two very troubling things: uncertainty about the Fed policy, combined with concerns about growth, particularly in China. It’s difficult to justify that it’s time to go out and buy emerging markets at the moment.”
Hedge fund managers go about finding investment ideas in a variety of different ways. Some target stocks with low multiples, while others look for growth names, and still others combine growth and value when looking for ideas. Some active fund managers use themes to look for ideas, and Owen Fitzpatrick of Aristotle Atlantic Partners is Read More
According to Bloomberg, the banking regulator in China instructed its regional offices to intensify their investigation on credit risk in the coal-mining industry based on information from people familiar with the issue. The move of the banking regulator indicates the possibility of defaults.
Dominic Bryant, global economist at BNP Paribas opined, “It is reasonable to say China is slowing down as a result of repositioning itself to a domestic-demand driven economy. And since it makes up 50 per cent of Asia, there is bound to be some knock-on effects around the region.”
Bank of America Merrill Lynch released a survey indicating that fear of sharper economic slowdown in China is the number one prospective risk of fund managers. Economists estimated that China’s growth rate will decline to 7.4% this year, will further go down to 7.2% in 2015.
- Dow Jones Industrial Average (DJIA)- 15,901.75 (-1.82%)
- S&P 500- 1,792.35 (-1.97%)
- NASDAQ- 4,130.73 (-2.09%)
- Russell 2000- 1,143.44 (-2.47%)
- EURO STOXX 50 Price EUR- 3,028.20 (-2.85%)
- FTSE 100 Index- 6,663.74 (-1.72%)
- Deutsche Borse AG German Stock Index DAX- 9,392.02 (-2.48%)
Asia Pacific Markets
- Nikkei 225- 15,391.56 (-1.94%)
- Hong Kong Hang Seng Index- 22,450.06 (-1.25%)
- Shanghai Shenzhen CSI 300 Index- 2,245.65 (+0.62%)
Stocks in Focus
The stock price of Juniper Networks, Inc. (NYSE:JNPR) climbed 6.57% to $27.72 per share after activist hedge fund Jana Partners disclosed that it is now one of the largest shareholders of the computer-networking company. The hedge fund urged the company to cut costs and return capital to shareholders.
The shares of Herbalife Ltd. (NYSE:HLF) declined further today. The stock tumbled 8.89% to $60.06 per share reflecting that investors are concern with the latest reports surrounding the multilevel marketing company, particularly Sen. Edward Markey’s call to the Federal Trade Commission (FTC) and Securities and Exchange Commission (SEC) to investigate allegations that it is a pyramid scheme. Today, the CA Attorney General’s staff members have a meeting with Latino activist groups regarding their complaints against Herbalife.
The Procter & Gamble Company (NYSE:PG) gained 1.20% to $79.18 per share after the company reported positive financial results for the second quarter. Procter and Gamble posted $3.43 billion in profit or $1.18 earnings per share on $22.33 billion revenue. The company’s CEO, A.G. Lafley said, “We expect strong earnings growth in the second half of the fiscal year driven by solid top-line growth, moderating headwinds from foreign exchange, and productivity savings that build throughout the year.”