Gates Capital Management's ECF Value Funds have a fantastic track record. The funds (full-name Excess Cash Flow Value Funds), which invest in an event-driven equity and credit strategy, have produced a 12.6% annualised return over the past 26 years. The funds added 7.7% overall in the second half of 2022, outperforming the 3.4% return for Read More
- US: Dow: 12602.30 (-0.20%), S&P 500: 1329.00 (-0.21%), NASDAQ: 2849.49 (-0.90%)
- Europe: CAC: 3048.27 (-0.49%), DAX: 6141.96 (-1.42%), FTSE: 5466.82 (-1.04%).
- Asia-Pacific: Australia: 4044.80 (0.04%), China: 2195.84 (-0.96%), Hong Kong: 19025.27 (-0.80%), India: 5149.15 (0.14%), Japan: 8874.11 (1.62%).
- Metals: Gold: 1550.40 (-1.77%), Silver: 26.25 (-2.58%), Copper: 3.33 (-0.70%)
- Energy: Crude Oil: 77.69 (-3.14%), Natural Gas: 2.72 (-2.72%)
- Commodities: Corn: 6.32 (-0.12%), Soya Bean: 14.03 (-0.60%), Wheat: 7.66 (-0.71%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2448 (0.20%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5516 (0.34%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 79.4450 (-0.30%)
- 10 year US Treasury: 1.585% (-0.032)
Market and Economy News Update
U.S. markets bounce back: U.S. markets recovered from sharp declines in the final hour of trading to close modestly lower on Thursday as investors speculated about the possibility of aid to debt-ridden European countries. The Dow Jones Industrial Average (INDEXDJX:.DJI) fell 0.2 percent to close at 12602.26. The S&P 500 (INDEXSP:.INX) declined 0.2 percent to 1329.04, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) lost 0.9 percent to 2849.49.
Oil prices tumble: Oil prices ended plunged to an eight-month low on Thursday amid investor concerns that the European Union summit will fail to find any durable solutions to the euro zone crisis. Crude oil for August delivery lost 3.1 percent, to settle at $77.69 a barrel on the New York Mercantile Exchange. Brent oil for August settlement slid 2.3 cents to $91.36 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
- Research In Motion Limited (USA) (NASDAQ:RIMM) posted first quarter adjusted net loss came of $192 million, or 37 cents a share, than was much bigger than a loss of 7 cents a share that analysts were expecting. Revenue plunged 43 percent to $2.8 billion that also trailed Street expectations of revenue of $3.1 billion. The company also divulged plans to cut 5,000 jobs over the course of the fiscal year.
- Nike, Inc. (NYSE:NKE) the world’s largest sporting-goods company, reported fourth-quarter profit of $549 million, or $1.17 a share that trailed analysts’ estimates, as higher costs hurt margins. Revenues for the quarter stood at $6.47 billion that was below consensus estimate of $6.51 billion.
- Accenture Plc (NYSE:ACN) reported fiscal third-quarter profit of $752.4 million, or $1.03 per share, that beat average analysts’ estimate of 99 cents per share. Revenue rose 6.1 percent to $7.64 billion from the year-earlier quarter, which also topped estimates. The company, however, cut its full-year profit outlook.
- Ford Motor Company (NYSE:F) has warned that its international losses are likely to triple in the second quarter, amid much weaker than expected European sales.
- AOL, Inc. (NYSE:AOL) ended the day 0.7 percent higher after announcing plans to buy back $400 million worth of its shares.
- Yahoo! Inc. (NASDAQ:YHOO) has entered into a multi-year deal with radio station giant Clear Channel, to provide exclusive content, that includes exclusive live video of its iHeart Radio Music Festival.
- Defense contractor United Technologies Corporation (NYSE:UTX) has agreed to pay $13.8 million to the federal government, after it pleaded guilty to illegally helping China develop and produce its first modern military attack helicopter, the Z-10.
- Firearms manufacturer Smith & Wesson Holding Corporation (NASDAQ:SWHC) posted fourth quarter earnings per share of 19 cents on revenue of $130 million, beating Street expectations for 17 cents a share on sales of $127 million.
- Business software maker Tibco Software Inc. (NASDAQ:TIBX) reported second quarter earnings, excluding one time items, of 26 cents a share, on revenue of $247 million that managed to beat the average analysts’ estimate of 23 cents a share on revenue of $245 million.
- Corelogic Inc (NYSE:CLGX), the provider of mortgage and real-estate information, has raised its full-year earnings and sales guidance, citing cost savings, and higher than expected mortgage origination levels.
- Electronics part maker Methode Electronics Inc. (NYSE:MEI) posted fourth quarter earnings in line with Wall Street estimates and reaffirmed its full year earnings and sales guidance.
- Aerospace and defense component maker Curtiss-Wright Corp. (NYSE:CW) has lowered its second quarter and full year earnings forecast, citing costs associated with a restructuring of its metal treatment segment and investments in China.
- Medical-device company Synergetics USA Inc. (NASDAQ:SURG) has received clearance from the U.S. Food and Drug Administration for its eye surgery device, VersaVIT.
- BrightPoint, Inc. (NASDAQ:CELL), a distributor of mobile devices for phone companies, closed the day 6 percent higher after it announced a servicing agreement with mobile broadband firm FreedomPop.
- Canadian mining exploration and development company Tahoe Resources Inc (TSE:THO) plunged 23 percent amid reports that a new Guatemalan constitutional amendment would allow the government to take up to 40 percent of companies who perform mining operations there. Tahoe, which is developing the Escobal silver mine in Guatemala, however denied the reports.
Hedge Fund News Update
- Mason Capital Management LLC, the biggest shareholder of Telus Corporation (USA) (NYSE:TU), has asked the Canadian telecom company to disclose its current levels of foreign ownership. Rival Canadian telecommunications provider, Globalive Communications Corporation, has complained that Telus Corp may have violated the 33.3 per cent limit on foreign ownership of phone companies.
- European regulators have put forward draft guidelines that aim to curb the excessive bonuses of managers of alternative investment funds including hedge funds and private equity funds.
- Boston-based hedge fund Highfields Capital Management LP has increased its stake in life insurer and mortgage guarantor, Genworth Financial Inc (NYSE:GNW) from 3.8 percent as of March 31, to 5.2 percent, according to a Reuters report.
- Billionaire hedge fund manager John Paulson’s flagship fund, Advantage Plus Fund, which had a poor 2011, is down 10 percent through May.
- Kenneth Griffin, founder of Citadel Investment Group, has said that Germany must exit the euro zone to save the common currency.
- Milwaukee-based hedge fund Stark Investments will close its flagship multi-strategy hedge funds, Shepherd Investments International and Shepherd Guardian Fund, in a bid to cut its assets under management.
- According to a new academic research conducted jointly by three US universities, hedge funds help make the market more efficient. The study says that demand from hedge fund generally tends to push prices towards equilibrium, and that hedge fund herd less than other institutional investors, and are less likely to engage in momentum trading.
Brokerage Upgrades and Downgrades on Thursday, June 28, 2012
- Anadarko Petroleum Corporation (NYSE:APC) was upgraded to “outperform” from “market perform” at Sanford C. Bernstein.
- Cree, Inc. (NASDAQ:CREE) was raised to “buy” from “hold” by analysts at ThinkEquity.
- Digital River, Inc. (NASDAQ:DRIV) was lifted to “buy” from “underperform” at Bank of America.
- Halliburton Company (NYSE:HAL) was upgraded to “outperform” from “market perform” by analysts at Sanford C. Bernstein.
- The McGraw-Hill Companies, Inc. (NYSE:MHP) was raised to “buy” from “hold” at Benchmark Co. with a price target of $53.
- Orexigen Therapeutics, Inc. (NASDAQ:OREX) was lifted to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Spectra Energy Corp. (NYSE:SE) was upgraded to “buy” from “neutral” at UBS AG with a target price of $31.
- Western Gas Partners, LP (NYSE:WES) was raised to “buy” from “neutral” by analysts at UBS AG with a price target of $48.
- Anthera Pharmaceuticals Inc (NASDAQ:ANTH) was cut to “market perform” from “outperform” at JMP Securities.
- Actuant Corporation (NYSE:ATU) was downgraded to “neutral” from “buy” by analysts at Citigroup with a target price of $29.
- Cooper Industries plc (NYSE:CBE) was lowered to “market perform” from “outperform” by analysts at Wells Fargo & Co.
- LKQ Corporation (NASDAQ:LKQ) was cut to “neutral” from “outperform” by analysts at Robert W. Baird with a price target of $37.
- Seagate Technology PLC (NASDAQ:STX) was downgraded to “hold” from “buy” at ThinkEquity.
- Western Digital Corp. (NASDAQ:WDC) was lowered to “hold” from “buy” by analysts at ThinkEquity.
- Weatherford International Ltd (NYSE:WFT) was cut to “market perform” from “outperform” at Sanford C. Bernstein.
- Xylem Inc (NYSE:XYL) was downgraded to “sell” from “neutral” by analysts at Goldman Sachs with a target price of $12.