Tuesday (01/03/12) Pre-Market Morning News: Hedge Funds Down 4% in 2011

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Every morning the Street of Walls team puts out an update on market levels, today’s top stories, and active M&A deals.

Today’s Top Stories:

  • Goldman Morning Update: “Asian markets were broadly higher Tuesday, as sentiment was boosted by an improved Chinese manufacturing survey (PMI) released over the weekend. The China PMI released on Sunday rose to 50.3% from 49.0% in November with the new orders components also showing improvement as Yu Song discusses in an “Asia Economics Data Flash.” Stocks in Europe are also opening up mostly higher this morning as investors begin to return from a relatively long two weeks of less-than-normal holiday trading activity” (Goldman research)
  • U.S. Pensions Face $460bn Deficit: due to poor returns, falling bond yields, and rising liabilities.  The deficit nearly doubled in 2011http://on.ft.com/t7UOVC
  • Bridgewater with Gloomy Outlook: Bridgewater Associates has made big money for investors in recent years by staying bearish on much of the global economy. As the new year rings in, the hedge fund firm has no plans to change that gloomy view http://on.wsj.com/uhnCh0
  • Defense Spending Cuts: Defense Secretary Leon E. Panetta is set this week to reveal his strategy that will guide the Pentagon in cutting hundreds of billions of dollars from its budget, and with it the Obama administration’s vision of the military that the United States needs to meet 21st-century threats, according to senior officials http://nyti.ms/uh5h9z
  • GOP Race Update: According to the Iowa Poll by the Des Moines Register newspaper – Mitt Romney has the support of 24% of the likely GOP caucus-goers, Ron Paul has 22% support while Rick Santorum has a 15% backing (BBG)
  • Obama with State of Union on Jan 24th: The only major legislative item on the president’s agenda is an extension of the payroll tax cut for the full year (WSJ)
  • MJN Baby Formula cleared by FDA: Federal health investigators cleared an infant formula of suspected bacterial contamination that last week prompted retailers to pull a batch of the product from their shelveshttp://on.wsj.com/vNti8s
  • Hedge Fund Performance: industry suffers its second-worst year of returns in 2011, index was down 4.1% in 2011 (BBG)
  • Apple iPad 3: International Business Times says that AAPL will not release the iPad 3 in Jan
  • Game & Lodging Alert: “This morning, the DICJ released gross gaming revenue (GGR) results for December. Total GGR for the month was 23.6 bn patacas, up 25.0% y/y and was roughly in line with our forecast for +26%” (DB)

Economic Calendar:

  • Sale Store Sales on Thursday: “We expect Dec to be strong, driven by easier comps, aggressive promos, and strong post-Christmas demand; We favor LTD, also ROST, ARO, URBN, TJX; GPS could be weak” (UBS Research)

M&A Watch:

  • Regions Financial has reportedly ended negotiations to sell its Morgan Keegan brokerage to Stifel Financial Corp, as the two sides weren’t able to come to an agreement over the terms of the deal
  • TOT buys $2.3B Utica shale stake from CHK
Disclosure: I do not have a position in any stocks mentioned in this article, do not have a plan to initiate a position within the next 72 hours.
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