Every afternoon we provide an update on global market levels, economic news, and hedge fund news.
Post Market Update
Inflation has been a big focus of Wall Street in recent months, and it won't go away any time soon. But where do we stand with inflation? Has it peaked, or will it continue higher? Q2 2021 hedge fund letters, conferences and more Nic Johnson of PIMCO, Catherine LeGraw of GMO, and Evan Rudy of Read More
- US: Dow: 13279.30 (0.50%), S&P 500: 1405.82 (0.57%), NASDAQ: 3050.44 (0.13%)
- Europe: CAC: 3212.80 (0.00%), DAX: 6761.19 (0.00%), FTSE: 5812.23 (1.30%).
- Asia-Pacific: Australia: 4429.50 (0.75%), China: 2396.32 (0.00%), Hong Kong: 21094.21 (0.00%), India: 5248.15 (0.00%), Japan: 9350.95 (-1.82%).
- Metals: Gold: 1662.40 (-0.11%), Silver: 31.00 (0.21%), Copper: 3.84 (0.37%)
- Energy: Crude Oil: 105.98 (1.06%), Natural Gas: 2.37 (3.76%)
- Commodities: Corn: 6.29 (-0.83%), Soya Bean: 13.92 (0.83%), Wheat: 6.43 (-1.76%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.3235 (0.05%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.6221 (0.10%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 80.1250 (0.39%)
- 10 year US Treasury: 1.944% (0.030)
Market and Economy News Update
U.S. markets rally: Markets pared their gains in the final hour of trading but still ended Tuesday with solid gains as a stronger than expected manufacturing report boosted investors’ optimism in the world’s largest economy. The Dow Jones Industrial Average (INDEXDJX:.DJI) ended the day 0.5 percent higher at 13,279.40, the highest since December 2007. The S&P 500 (INDEXSP:.INX) ended up 0.6 percent, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) 0.13 percent, to close at 3,050.44.
Oil prices soar:Oil prices climbed to a five-week high after data showed the U.S. manufacturing sector expanded in April at its fastest pace in 10 months, easing concerns about slowing economic growth. Crude oil for May delivery gained 1.06 percent to $105.98 a barrel on the New York Mercantile Exchange. Brent oil for June settlement rose 0.15 percent to end the session at $119.65 a barrel on the London-based ICE Futures Europe exchange.
Company News Update
- Oil and natural gas company Chesapeake Energy Corporation (NYSE:CHK) reported first quarter earnings excluding items of 18 cents per share, on revenue of $2.4 billion that missed Wall Street’s expectations.
- Broadcom Corporation (NASDAQ:BRCM) reported first quarter earnings excluding certain costs of 65 cents a share, topping analysts’ estimates, and forecast second-quarter revenue of $1.9 billion to $2 billion.
- Bank of America Corp (NYSE:BAC) is planning to slash up to 400 positions in its investment banking, corporate banking and non-U.S. wealth-management units, the Wall Street Journal reported
- Wolverine World Wide, Inc. (NYSE:WWW), Blum Capital Partners and Golden Gate Capital agreed to buy Collective Brands Inc. (NYSE:PSS), owner of the Payless and Stride Rite shoe store chains, for about $1.23 billion.
- Agco Corporation (NYSE:AGCO), the third-largest farm machinery maker, reported a better-than-expected rise in first-quarter earnings, and forecast 2012 profit and sales that were higher than analysts’ estimates.
- Mortgage insurer Radian Group Inc. (NYSE:RDN) reported a second straight quarterly loss, but said its risk ratios improved in the quarter. Radian posted a first quarter loss of $169.2 million, or $1.28 a share, compared with a profit of $103.0 million, or 77 cents a share, a year ago.
- U.S. auto- rental chain Avis Budget Group Inc. (NASDAQ:CAR) forecast a full-year revenue growth of between 24 percent and 29 percent, topping analysts’ estimates, on higher values for used cars and improving travel demand.
- Texas-based refined sugar processor Imperial Sugar Company (NASDAQ:IPSU) said that privately held agribusiness company Louis Dreyfus Commodities has agreed to buy the company for about $78 million.
- Michael D. Fraizer, Chairman and Chief Executive Officer of Genworth Financial Inc (NYSE:GNW), has resigned.
Hedge Fund News Update
- New York-based private equity and hedge fund firm Centerbridge Partners will buy restaurant chain P.F. Chang’s China Bistro (NASDAQ:PFCB) for $1.1 billion.
- Man Group Plc (LON:EMG), the world’s biggest publicly traded hedge fund manager, said clients withdrew a net $1 billion in the first three months of the year, after witnessing $2.5 billion of net outflows in the final three months of 2011.
- According to a new report by Towers Watson, a consultancy which advises institutional investors, hedge fund should keep only one third of the level of out performance the managers are able to generate, and the rest should go to the investors. This is in stark contrast to the present model of operation in which the rewards are skewed in favor of the hedge fund managers.
- Metacapital Management L.P., the hedge fund run by former Lehman Brothers Holdings Inc. trader, Deepak Narula, will launch the Metacapital Mortgage Value Fund, which will focus on long positions in agency and non-agency mortgage-backed securities, asset-backed securities and commercial-mortgage backed securities. The new fund will start with a modest $20 million, and will target a net return of 8 percent to 10 percent.
- Hedge fund manager Philip Falcone has agreed to scale back his role in wireless-telecommunications company, LightSquared Inc., in which his Harbinger Capital owns 94 percent.
- Hedge fund industry veteran, Daniel McDermott, will assume the role of Chief Executive Officer at Massachusetts based Brighton House Associates.
- AlphaNorth Partners Fund has opened to new investment. The flagship fund of Toronto-based investment manager AlphaNorth Asset Management, is a small-cap, long-biased hedge fund with a focus on Canadian companies.
- Shares of Herbalife Ltd. (NYSE: HLF) plunged 20 percent after Greenlight Capital’s David Einhorn asked pointed questions about the company’s distribution model during a conference call this morning, following first-quarter results.
Brokerage Upgrades and Downgrades on Tuesday, May 1, 2012
- Avon Products, Inc. (NYSE:AVP) was upgraded to “buy” from “hold” at Standpoint Research with a target price of $24.
- Abercrombie & Fitch Co. (NYSE:ANF) was raised to “buy” from “neutral” at UBS AG with a target price of $66.
- Cavium Inc (NASDAQ:CAVM) was upgraded to “buy” from “neutral” at Mizuho with a target price of $35.
- MeadWestvaco Corp. (NYSE:MWV)) was raised to “buy” from “neutral” at Longbow with a target price of $36.
- Targa Resources Corp (NYSE:TRGP) was upgraded to “outperform” from “neutral” at Robert W. Baird with a target price of $60.
- Accretive Health, Inc. (NYSE:AH) was downgraded from “buy” to “neutral” at UBS AG with a target price of $11.
- Apollo Commercial Real Est. Finance Inc (NYSE:ARI) was cut from “buy” to “hold” at Stifel Nicolaus.
- Archer Daniels Midland Company (NYSE:ADM) was downgraded from “buy” to “hold” at Standpoint Research.