The document summarizes key events for the following day including earnings reports from several major companies and economic data releases. It also provides analysis on topics like the impact of the strengthening US dollar on multinational company profits and the origins of the feud between hedge fund managers Bill Ackman and Carl Icahn over Ackman's bet against Herbalife.
"Ackman is a good example of 'It is OK to be the smartest guy in the room, but it may not be the best idea to tell everyone that you're the smartest guy in the room,''' said Jonathan Kanterman, an alternative investment consultant. "People can get a little turned off by that."
Supporters maintain it can be easy to mistake self-confidence for arrogance. Ackman has bounced back from setbacks before, and his reputation is based on some rather spectacular successes.
Special report emerging markets (the economist)ARTOTEL Academy
This document provides a summary of emerging markets and some of the risks they face. It discusses that emerging markets have historically provided both risks and profits for investors. While emerging markets have shown recent improvements in exports, GDP growth, and financial markets, there are still risks from factors like higher US interest rates, commodity price swings, protectionism, and political populism. However, the document argues that emerging economies have become more resilient in recent years, though perhaps less dynamic, and this improved resilience should allow their recovery to continue despite the threats they face.
- In October 2008, global stock markets experienced their worst month since the 1987 crash as fears about the health of the world economy rose sharply. The S&P 500 fell over 23% during the first eight trading days alone.
- The credit crisis that began with the housing bust in the US escalated in September with Lehman Brothers' bankruptcy, igniting a wave of risk aversion across markets. Selling accelerated as investors fled stocks and hedge funds were forced to dump holdings.
- Central banks around the world coordinated unprecedented interest rate cuts and liquidity measures. Governments also allocated over $3 trillion for bailouts and stimulus to stabilize markets and confidence. These actions helped pare losses by month's end.
1. Several analysts believe the bull market may continue into early 2017, with the Dow Jones potentially reaching 20,000-21,000. Investors are advised to consider transportation, financials, healthcare, real estate, utilities and industrials.
2. The ECB kept interest rates unchanged despite the Italian referendum result. The OPEC production cut may open opportunities for US oil exports to Asia. Apple is considering ways to repatriate cash and jobs to the US.
3. Just three stocks - Goldman Sachs, UnitedHealth, and Caterpillar - accounted for nearly half of the Dow's 1300 point gain in the last month.
THIRD QUARTER 2016
RETROSPECTIVE AND PROSPECTIVE
And The Band Played On…
“When democratic governments create economic calamity, free markets get the blame.”-Jack Kemp
“Politicians and diapers must be changed often, and for the same reason.”- Mark Twain
Thus far, the calamities predicted by the pundits that would result from the Brexit vote to leave the European Union have not been as severe as anticipated. Perhaps this is due to the building geopolitical and economic stresses that have diverted the focus from Brexit to other issues. Furthermore, the impact of Brexit will likely take some time to discern as the trade, migration, political and other ramifications evolve over the coming months and years. Meanwhile, governments globally continue in their efforts to stimulate economic growth with what appears to be diminishing results.
The euphoria of the past year carried into the first quarter of 2014 only to be rudely interrupted by geopolitical events as Russia took over the Crimea. The hue and outcry was heard around the world and global markets were shaken by this event.
Investor Pessimism Fertile Ground For The Next Leg UpDanionescu
Investor pessimism is currently high despite signs of steady economic growth in North America. Stock prices have declined significantly over the past year and experts are divided on whether the market will continue to decline over the summer or resume rising. However, the high level of negativity and skepticism from investors suggests the conditions are ripe for a significant market rally, as periods of widespread pessimism have often been followed by rises in the past. Financial and technology stocks may outperform if interest rates rise.
The document contains predictions from Saxo Bank analysts for the year 2016. Some of the key predictions include:
1) The Euro will rise against the US dollar to 1.23 by the end of 2016 as the US dollar peaks at the start of the Federal Reserve's expected rate hiking cycle.
2) The Russian rouble will be the best performing currency in 2016, rising 20% against the US dollar/euro basket as oil prices surge and geopolitical tensions ease.
3) Valuations of tech startups, known as unicorns, will be reduced by more than half as public markets refuse to pay inflated private market valuations, slowing venture capital funding.
4) Brazil will
"Ackman is a good example of 'It is OK to be the smartest guy in the room, but it may not be the best idea to tell everyone that you're the smartest guy in the room,''' said Jonathan Kanterman, an alternative investment consultant. "People can get a little turned off by that."
Supporters maintain it can be easy to mistake self-confidence for arrogance. Ackman has bounced back from setbacks before, and his reputation is based on some rather spectacular successes.
Special report emerging markets (the economist)ARTOTEL Academy
This document provides a summary of emerging markets and some of the risks they face. It discusses that emerging markets have historically provided both risks and profits for investors. While emerging markets have shown recent improvements in exports, GDP growth, and financial markets, there are still risks from factors like higher US interest rates, commodity price swings, protectionism, and political populism. However, the document argues that emerging economies have become more resilient in recent years, though perhaps less dynamic, and this improved resilience should allow their recovery to continue despite the threats they face.
- In October 2008, global stock markets experienced their worst month since the 1987 crash as fears about the health of the world economy rose sharply. The S&P 500 fell over 23% during the first eight trading days alone.
- The credit crisis that began with the housing bust in the US escalated in September with Lehman Brothers' bankruptcy, igniting a wave of risk aversion across markets. Selling accelerated as investors fled stocks and hedge funds were forced to dump holdings.
- Central banks around the world coordinated unprecedented interest rate cuts and liquidity measures. Governments also allocated over $3 trillion for bailouts and stimulus to stabilize markets and confidence. These actions helped pare losses by month's end.
1. Several analysts believe the bull market may continue into early 2017, with the Dow Jones potentially reaching 20,000-21,000. Investors are advised to consider transportation, financials, healthcare, real estate, utilities and industrials.
2. The ECB kept interest rates unchanged despite the Italian referendum result. The OPEC production cut may open opportunities for US oil exports to Asia. Apple is considering ways to repatriate cash and jobs to the US.
3. Just three stocks - Goldman Sachs, UnitedHealth, and Caterpillar - accounted for nearly half of the Dow's 1300 point gain in the last month.
THIRD QUARTER 2016
RETROSPECTIVE AND PROSPECTIVE
And The Band Played On…
“When democratic governments create economic calamity, free markets get the blame.”-Jack Kemp
“Politicians and diapers must be changed often, and for the same reason.”- Mark Twain
Thus far, the calamities predicted by the pundits that would result from the Brexit vote to leave the European Union have not been as severe as anticipated. Perhaps this is due to the building geopolitical and economic stresses that have diverted the focus from Brexit to other issues. Furthermore, the impact of Brexit will likely take some time to discern as the trade, migration, political and other ramifications evolve over the coming months and years. Meanwhile, governments globally continue in their efforts to stimulate economic growth with what appears to be diminishing results.
The euphoria of the past year carried into the first quarter of 2014 only to be rudely interrupted by geopolitical events as Russia took over the Crimea. The hue and outcry was heard around the world and global markets were shaken by this event.
Investor Pessimism Fertile Ground For The Next Leg UpDanionescu
Investor pessimism is currently high despite signs of steady economic growth in North America. Stock prices have declined significantly over the past year and experts are divided on whether the market will continue to decline over the summer or resume rising. However, the high level of negativity and skepticism from investors suggests the conditions are ripe for a significant market rally, as periods of widespread pessimism have often been followed by rises in the past. Financial and technology stocks may outperform if interest rates rise.
The document contains predictions from Saxo Bank analysts for the year 2016. Some of the key predictions include:
1) The Euro will rise against the US dollar to 1.23 by the end of 2016 as the US dollar peaks at the start of the Federal Reserve's expected rate hiking cycle.
2) The Russian rouble will be the best performing currency in 2016, rising 20% against the US dollar/euro basket as oil prices surge and geopolitical tensions ease.
3) Valuations of tech startups, known as unicorns, will be reduced by more than half as public markets refuse to pay inflated private market valuations, slowing venture capital funding.
4) Brazil will
Sprung Investment Management is an independent investment management firm that serves high net worth private clients. It focuses on creating customized portfolios to achieve clients' long-term investment goals through principled analysis and integrity. The firm takes a value-driven approach to selecting undervalued securities with a margin of safety for preserving capital and delivering income and growth. It has a track record of low volatility returns since 2005 and performance numbers are available upon request.
Investment review and outlook august 2018 Roger Beutler
The document provides an investment review and outlook for August 2018. It summarizes recent performance across various asset classes including equities, fixed income, real assets, and private equity. While equity returns have been strong, markets face increased risks due to high valuations, rising interest rates, and potential trade wars. Diversification across asset classes remains important, as different areas may provide opportunities even during market downturns. Selective, globally diversified investments could continue generating attractive returns going forward despite challenges in the current investing environment.
It didn’t go the way the pundits predicted. As the second quarter came to a close, people in the UK voted to exit (Brexit) the European Union by a narrow margin. Despite the narrow differences in the polls, global markets and the mainstream press indicated that the opposite outcome would prevail in the days leading up to the vote.
Investors hate uncertainty. The immediate reaction to the Brexit vote was severe and negative. However, stocks recovered to a great extent over the following week.
Global concerns like the European debt crisis and Chinese economic slowdown are fading, while economic indicators from China, Germany, and the US point to recovery. This has investors believing the "wall of worry" may be easing as variables align for renewed growth in global markets, sending commodities, currencies, and stocks higher. Top Canadian banks are expected to report strong earnings in coming weeks, which could push their stock prices to new highs outperforming the broader market. Other companies to watch include Research in Motion, whose new BlackBerry 10 software and phones look promising, as well as Couche-Tard, CGI, Dollarama, and Gildan.
Ey an-analysis-of-trends-in-the-us-capital-marketsJulien Boucher
EY’s recently released white paper, Looking behind the declining number of public companies, documents the strength of the US public equity markets and growing influence and use of private capital, as part of the ongoing policy debate regarding the strength of the US IPO and public company markets.
The document provides an overview of recent global economic developments and risks. It discusses the surprising pickup in global growth despite headwinds, with growth momentum becoming more evident in the EU. However, the US growth outlook has been reduced due to concerns about losing momentum from fiscal policy changes. Commodity exporters continue to struggle with lower revenues and diversifying growth. Financial stability risks need monitoring in emerging markets. Strong credit growth in China supports growth but debt levels raise risks. Markets have performed well with low volatility, but this raises concerns about a potential market flare up given rich valuations and policy uncertainties.
The document discusses recent market and economic developments and their implications. It notes that while job growth has remained strong, the quality of jobs created has lagged. Total worker compensation has dropped significantly. Commodity prices, especially oil, have impacted markets. Views on precious metals prices like gold diverge, with some bullish but others like EQS bearish as they believe metals will decline if interest rates rise. Overall the document analyzes recent economic data and trader perspectives.
The document provides an executive summary of franchise sales and locations for 2007 compared to 2006. Some of the key findings include:
- Worldwide franchise sales increased 4.76% to $443.8 billion in 2007 from $423.6 billion in 2006.
- The number of total operating locations decreased slightly by 0.38% while international locations grew by 2.08%.
- Convenience stores like 7-Eleven, Circle K, and ampm saw strong sales growth, buoyed by high gas prices.
- Casual dining restaurants also fared well and added new chains to the top 200 list, with many showing substantial growth.
- Hotels performed well despite the slowing economy
In this edition of Valuation Insights we discuss retention incentives that are expected to become more mainstream under the new Trump Administration. The article discusses recent high profile cases, such as United Technologies recently announced deal to retain Carrier Corporation's furnace manufacturing facility in Indiana. The most common retention incentives are discussed in the article as well as best practices to improve your prospects for securing them.
Other Topics Covered Include:
• Goodwill impairment trends as highlighted in the Duff & Phelps 2016 U.S. and European Goodwill Impairment Studies • Duff & Phelps' Fifth Annual Transaction Trail Report on M&A and Capital Markets Activity in Southeast Asia • Delaware Chancery Court Case which utilized the Duff & Phelps Valuation Handbook Series as support for its conclusion that the respondent's expert's analysis was more reliable.
The document discusses investment outlooks for 2016. Key points include:
- Continued low global growth is expected, along with subdued inflation and accommodative monetary policy.
- Risks remain skewed downward, and markets could become volatile on negative news.
- In equities, favor areas with economic tailwinds like the Eurozone, Japan, and US financial and consumer sectors.
- In fixed income, favor a balanced approach including credit sensitive sectors like high yield bonds and senior loans.
WIG - June 2014 Annual Financial ReportBrad Sheahon
This document provides a summary of Wilson HTM Investment Group's performance and operations for the 2009 financial year. Some key points:
- NPAT was $2.2 million compared to $12 million in the previous year, impacted by losses on principal investments. Excluding these, established businesses reported NPAT of $7.4 million.
- Funds under management grew 21% to $6.4 billion, driven by net inflows to Pinnacle boutiques and the Next Financial acquisition.
- Capital markets revenue declined 41% to $51.7 million and profit before tax fell 80% to $2.5 million, due to lower transaction volumes in a difficult market.
- Investment management revenue fell 8
Trump's Twitter, currency manipulation and the trade dispute are keyHantec Markets
Donald Trump sending out a Twitter storm on currency manipulation and railing against the actions of the Fed have brought in an extra dimension for traders to consider this week. His threats to ratchet up the trade dispute with China also means that geopolitics remain a key factor. We consider the outlook for forex, equities and commodities.
The immediate outlook for key markets and sectors
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the
industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
France – with a spotlight on the household appliances and dairy sectors
Austria – with a spotlight on the paper and timber sectors
Italy
Norway
Canada
New Zealand
Brazil
Japan
Special: Atradius Collections - Keep your cash flow healthy
The document provides an overview of various topics covered in the March 2016 edition of the USIS Review, including:
- Sterling reacted negatively to uncertainty surrounding the upcoming Brexit referendum, dropping to a seven-year low against the dollar. Other factors like interest rate hikes in the US also contributed to the slump.
- Trouble may lie ahead for the global economy as declining growth, falling commodity prices, and diminishing monetary policy options have increased anxiety. Central banks have introduced unconventional policies like negative interest rates to stimulate growth.
- Profit increased at British Gas but derivatives trading poses risks to the global economy. The rise of right-wing political groups in response to issues like migration was also discussed.
This document summarizes market conditions and events from early September 2012. It notes that technical indicators show weakness in the markets ahead of the US presidential election. It discusses an expected downturn in the UK economy following the Olympics. It also describes bank runs occurring in Spain, with hundreds of billions withdrawn, and weakness emerging at Deutsche Bank. Mini flash crashes continue to occur in some stocks on US markets.
The annual report summarizes Walmart's financial performance in fiscal year 2002, which was challenging due to economic adversity including a recession and the impacts of 9/11. However, Walmart increased revenues by 13.8% to $218 billion, gaining market share. It also opened almost 200 new stores. The report attributes Walmart's success to its 1.4 million hardworking associates who provided great customer service and kept costs low. It emphasizes that associates are the most important asset and discusses Walmart's focus on developing future leaders from within.
The Greenlight Capital funds returned 9.4% in Q3 2012, bringing the YTD return to 13.2%. Central banks around the world have engaged in unprecedented monetary easing through bond purchases. The Fed will purchase $40B per month of mortgage backed securities indefinitely at near 0% interest rates. There is concern that further monetary stimulus could create new asset bubbles. Gold and several stock positions contributed positively to returns in Q3, while an undisclosed macro position was negative.
The global high yield bond markets have witnessed sentiment to risk-off mode. This has since been partially significant growth and diversification over the last few years aided by the extraordinary monetary policy accommodation provided by central banks across the world. The unprecedented liquidity made available at record low yields has thus led to a significant pick up in both primary market and secondary market activity in the asset class. Banking disintermediation in Europe and regulatory changes in the financial sector further contributed to the deepening and diversification of the high yield bond markets even as emerging market issuances entered the fray.
In this backdrop, Aranca’s special report – High Yield Bonds - The Rise of the Fallen – examines how liquidity concerns have increased with changing regulatory environment, rising capital requirements and declining risk appetite leading to decreasing bond inventories at both banks and other dealers even as corporate bond issuances are at an all-time high.
The document analyzes international market conditions and provides investment recommendations. It finds that the UK offers potential due to the weak pound increasing earnings for FTSE 100 companies. Japan is not recommended as the strong yen is hurting corporate earnings. Hong Kong is also not advised due to potential trade conflicts weakening China's economy and Hong Kong's exports. Overall international equities are recommended to be lowered due to growing trade war risks, though some value may still exist in the UK.
Indexes rallied led by technology and financial stocks as investors speculated a rate hike from the Federal Reserve. Oil prices rose on hopes of a US crude drawdown while gold prices fell. Costco is expected to report lower than expected sales and profits. HP is expected to report revenue slightly below estimates. The Federal Reserve banks of Philadelphia, Minneapolis, and Dallas will have various speaking events. Tiffany is expected to report lower sales. Exxon and Chevron will face pressure from shareholders on climate change. BlackRock will hold its annual meeting facing questions on CEO pay and oversight.
Stocks fell broadly led by megacap tech stocks as Treasury yields rose. The Dow fell 0.86%, S&P 500 lost 1.29% and Nasdaq dropped 2.01% on recession fears. Gold and oil prices also slipped with a stronger dollar. Looking ahead, investors will watch for comments from Fed Chair Powell at the Jackson Hole symposium this week and upcoming economic data.
Sprung Investment Management is an independent investment management firm that serves high net worth private clients. It focuses on creating customized portfolios to achieve clients' long-term investment goals through principled analysis and integrity. The firm takes a value-driven approach to selecting undervalued securities with a margin of safety for preserving capital and delivering income and growth. It has a track record of low volatility returns since 2005 and performance numbers are available upon request.
Investment review and outlook august 2018 Roger Beutler
The document provides an investment review and outlook for August 2018. It summarizes recent performance across various asset classes including equities, fixed income, real assets, and private equity. While equity returns have been strong, markets face increased risks due to high valuations, rising interest rates, and potential trade wars. Diversification across asset classes remains important, as different areas may provide opportunities even during market downturns. Selective, globally diversified investments could continue generating attractive returns going forward despite challenges in the current investing environment.
It didn’t go the way the pundits predicted. As the second quarter came to a close, people in the UK voted to exit (Brexit) the European Union by a narrow margin. Despite the narrow differences in the polls, global markets and the mainstream press indicated that the opposite outcome would prevail in the days leading up to the vote.
Investors hate uncertainty. The immediate reaction to the Brexit vote was severe and negative. However, stocks recovered to a great extent over the following week.
Global concerns like the European debt crisis and Chinese economic slowdown are fading, while economic indicators from China, Germany, and the US point to recovery. This has investors believing the "wall of worry" may be easing as variables align for renewed growth in global markets, sending commodities, currencies, and stocks higher. Top Canadian banks are expected to report strong earnings in coming weeks, which could push their stock prices to new highs outperforming the broader market. Other companies to watch include Research in Motion, whose new BlackBerry 10 software and phones look promising, as well as Couche-Tard, CGI, Dollarama, and Gildan.
Ey an-analysis-of-trends-in-the-us-capital-marketsJulien Boucher
EY’s recently released white paper, Looking behind the declining number of public companies, documents the strength of the US public equity markets and growing influence and use of private capital, as part of the ongoing policy debate regarding the strength of the US IPO and public company markets.
The document provides an overview of recent global economic developments and risks. It discusses the surprising pickup in global growth despite headwinds, with growth momentum becoming more evident in the EU. However, the US growth outlook has been reduced due to concerns about losing momentum from fiscal policy changes. Commodity exporters continue to struggle with lower revenues and diversifying growth. Financial stability risks need monitoring in emerging markets. Strong credit growth in China supports growth but debt levels raise risks. Markets have performed well with low volatility, but this raises concerns about a potential market flare up given rich valuations and policy uncertainties.
The document discusses recent market and economic developments and their implications. It notes that while job growth has remained strong, the quality of jobs created has lagged. Total worker compensation has dropped significantly. Commodity prices, especially oil, have impacted markets. Views on precious metals prices like gold diverge, with some bullish but others like EQS bearish as they believe metals will decline if interest rates rise. Overall the document analyzes recent economic data and trader perspectives.
The document provides an executive summary of franchise sales and locations for 2007 compared to 2006. Some of the key findings include:
- Worldwide franchise sales increased 4.76% to $443.8 billion in 2007 from $423.6 billion in 2006.
- The number of total operating locations decreased slightly by 0.38% while international locations grew by 2.08%.
- Convenience stores like 7-Eleven, Circle K, and ampm saw strong sales growth, buoyed by high gas prices.
- Casual dining restaurants also fared well and added new chains to the top 200 list, with many showing substantial growth.
- Hotels performed well despite the slowing economy
In this edition of Valuation Insights we discuss retention incentives that are expected to become more mainstream under the new Trump Administration. The article discusses recent high profile cases, such as United Technologies recently announced deal to retain Carrier Corporation's furnace manufacturing facility in Indiana. The most common retention incentives are discussed in the article as well as best practices to improve your prospects for securing them.
Other Topics Covered Include:
• Goodwill impairment trends as highlighted in the Duff & Phelps 2016 U.S. and European Goodwill Impairment Studies • Duff & Phelps' Fifth Annual Transaction Trail Report on M&A and Capital Markets Activity in Southeast Asia • Delaware Chancery Court Case which utilized the Duff & Phelps Valuation Handbook Series as support for its conclusion that the respondent's expert's analysis was more reliable.
The document discusses investment outlooks for 2016. Key points include:
- Continued low global growth is expected, along with subdued inflation and accommodative monetary policy.
- Risks remain skewed downward, and markets could become volatile on negative news.
- In equities, favor areas with economic tailwinds like the Eurozone, Japan, and US financial and consumer sectors.
- In fixed income, favor a balanced approach including credit sensitive sectors like high yield bonds and senior loans.
WIG - June 2014 Annual Financial ReportBrad Sheahon
This document provides a summary of Wilson HTM Investment Group's performance and operations for the 2009 financial year. Some key points:
- NPAT was $2.2 million compared to $12 million in the previous year, impacted by losses on principal investments. Excluding these, established businesses reported NPAT of $7.4 million.
- Funds under management grew 21% to $6.4 billion, driven by net inflows to Pinnacle boutiques and the Next Financial acquisition.
- Capital markets revenue declined 41% to $51.7 million and profit before tax fell 80% to $2.5 million, due to lower transaction volumes in a difficult market.
- Investment management revenue fell 8
Trump's Twitter, currency manipulation and the trade dispute are keyHantec Markets
Donald Trump sending out a Twitter storm on currency manipulation and railing against the actions of the Fed have brought in an extra dimension for traders to consider this week. His threats to ratchet up the trade dispute with China also means that geopolitics remain a key factor. We consider the outlook for forex, equities and commodities.
The immediate outlook for key markets and sectors
Every month, Atradius brings you an up to the minute snapshot report on a range of export markets and key trade sectors. Our underwriters have a specialist view of the world economy – and the
industries that make that economy tick - that you won’t find in the general press coverage of events.
Even more importantly, our underwriters use their expertise and experience to look to the future. In each edition of Atradius Market Monitor you’ll find our outlook for a number of key market economies.
In this issue…
…we feature the following markets:
France – with a spotlight on the household appliances and dairy sectors
Austria – with a spotlight on the paper and timber sectors
Italy
Norway
Canada
New Zealand
Brazil
Japan
Special: Atradius Collections - Keep your cash flow healthy
The document provides an overview of various topics covered in the March 2016 edition of the USIS Review, including:
- Sterling reacted negatively to uncertainty surrounding the upcoming Brexit referendum, dropping to a seven-year low against the dollar. Other factors like interest rate hikes in the US also contributed to the slump.
- Trouble may lie ahead for the global economy as declining growth, falling commodity prices, and diminishing monetary policy options have increased anxiety. Central banks have introduced unconventional policies like negative interest rates to stimulate growth.
- Profit increased at British Gas but derivatives trading poses risks to the global economy. The rise of right-wing political groups in response to issues like migration was also discussed.
This document summarizes market conditions and events from early September 2012. It notes that technical indicators show weakness in the markets ahead of the US presidential election. It discusses an expected downturn in the UK economy following the Olympics. It also describes bank runs occurring in Spain, with hundreds of billions withdrawn, and weakness emerging at Deutsche Bank. Mini flash crashes continue to occur in some stocks on US markets.
The annual report summarizes Walmart's financial performance in fiscal year 2002, which was challenging due to economic adversity including a recession and the impacts of 9/11. However, Walmart increased revenues by 13.8% to $218 billion, gaining market share. It also opened almost 200 new stores. The report attributes Walmart's success to its 1.4 million hardworking associates who provided great customer service and kept costs low. It emphasizes that associates are the most important asset and discusses Walmart's focus on developing future leaders from within.
The Greenlight Capital funds returned 9.4% in Q3 2012, bringing the YTD return to 13.2%. Central banks around the world have engaged in unprecedented monetary easing through bond purchases. The Fed will purchase $40B per month of mortgage backed securities indefinitely at near 0% interest rates. There is concern that further monetary stimulus could create new asset bubbles. Gold and several stock positions contributed positively to returns in Q3, while an undisclosed macro position was negative.
The global high yield bond markets have witnessed sentiment to risk-off mode. This has since been partially significant growth and diversification over the last few years aided by the extraordinary monetary policy accommodation provided by central banks across the world. The unprecedented liquidity made available at record low yields has thus led to a significant pick up in both primary market and secondary market activity in the asset class. Banking disintermediation in Europe and regulatory changes in the financial sector further contributed to the deepening and diversification of the high yield bond markets even as emerging market issuances entered the fray.
In this backdrop, Aranca’s special report – High Yield Bonds - The Rise of the Fallen – examines how liquidity concerns have increased with changing regulatory environment, rising capital requirements and declining risk appetite leading to decreasing bond inventories at both banks and other dealers even as corporate bond issuances are at an all-time high.
The document analyzes international market conditions and provides investment recommendations. It finds that the UK offers potential due to the weak pound increasing earnings for FTSE 100 companies. Japan is not recommended as the strong yen is hurting corporate earnings. Hong Kong is also not advised due to potential trade conflicts weakening China's economy and Hong Kong's exports. Overall international equities are recommended to be lowered due to growing trade war risks, though some value may still exist in the UK.
Indexes rallied led by technology and financial stocks as investors speculated a rate hike from the Federal Reserve. Oil prices rose on hopes of a US crude drawdown while gold prices fell. Costco is expected to report lower than expected sales and profits. HP is expected to report revenue slightly below estimates. The Federal Reserve banks of Philadelphia, Minneapolis, and Dallas will have various speaking events. Tiffany is expected to report lower sales. Exxon and Chevron will face pressure from shareholders on climate change. BlackRock will hold its annual meeting facing questions on CEO pay and oversight.
Stocks fell broadly led by megacap tech stocks as Treasury yields rose. The Dow fell 0.86%, S&P 500 lost 1.29% and Nasdaq dropped 2.01% on recession fears. Gold and oil prices also slipped with a stronger dollar. Looking ahead, investors will watch for comments from Fed Chair Powell at the Jackson Hole symposium this week and upcoming economic data.
1) Greece passed austerity measures to receive EU aid and avoid default, relieving investors and sending markets soaring last week.
2) Positive manufacturing and earnings reports from companies like Nike also contributed to the market gains.
3) Sentiment can change quickly in financial markets, as the market had fallen for seven of the previous eight weeks but then surged last week.
- U.S. and European stock futures fell while Asian stocks closed lower as investors weighed concerns about global growth and the outcome of Greece's debt swap.
- European stocks dropped with banks and resources stocks declining the most, as a report showed the eurozone economy contracted 0.3% in Q4.
- Private investors holding about 20% of the bonds involved in Greece's debt restructuring have agreed to participate in the swap, which aims to reduce Greece's debt by 53.5%.
- Sun Life Financial reported a smaller-than-expected profit hurt by weak growth in its U.S. market, while Ford directors are pressing CEO Mark Fields to sharpen strategy on electric cars and boost stock price.
Wall Street saw significant declines in January as concerns about the fragility of economic recovery, bank reforms, China's tightening of lending standards, and Greece's debt crisis rattled investors. The Dow fell 3.2% for its first loss since June, while Treasury yields dipped as investors fled to safe haven government assets. Though fourth quarter GDP grew at a 5.7% rate, gains were attributed to temporary inventory adjustments rather than sustainable growth.
- US and European stock futures fell while Asian stocks also declined due to concerns about global growth and the outcome of Greece's debt restructuring.
- Data showed the eurozone economy contracted 0.3% in Q4 and a report warned that a Greek default could cost the eurozone over 1 trillion euros.
- Private investors holding around 20% of Greek bonds involved in the debt swap have agreed to participate so far.
- Several Canadian and US companies reported earnings, with Suncor Energy and Crescent Point Energy beating estimates.
- European and US markets were lower in afternoon trading ahead of central bank comments while awaiting Trump's tax plans.
The weekly economic update from Major League Investments provides the following information:
- Job growth increased in July with 163,000 new jobs added, though the unemployment rate ticked up to 8.3%.
- Personal incomes rose but consumer spending was flat, and the personal savings rate increased.
- Home prices rose 2.2% in May according to the S&P/Case-Shiller Home Price Index.
- The manufacturing sector contracted again according to the ISM manufacturing index.
Capital Markets Industry Insights - Q1 2016Duff & Phelps
Prospective middle-market issuers are being greeted with robust demand from both traditional private credit investors and crossover public market participants. While monetary policy concerns weighed heavily on market participants for much of the first quarter, the Fed’s more dovish posture of recent weeks has triggered an increase in risk appetite across the credit markets.
Epic Research provides research report for equity and Fundamental Stock Market report. You can learn about Investment stock market & get the details long term investment stocks in Indian market. www.epicresearch.co
- U.S. and European stock futures pointed to slightly lower opens, while most Asian indexes closed lower due to growth concerns and geopolitical tensions.
- Disney will stop providing movies to Netflix starting in 2019 and launch its own streaming service, sending Disney shares lower in after-hours trading and Netflix shares down over 2%.
- Lockheed Martin said customers want missile defense systems amid North Korean missile tests, boosting Lockheed shares nearly 8% since North Korea's first long-range missile test on July 4th.
The document summarizes key events and market indicators for June 18, 2014. It discusses that the Federal Reserve is expected to further reduce bond buying and provide updated economic forecasts. It also mentions General Motors CEO Mary Barra testifying before Congress again regarding the ignition switch scandal. Several company earnings reports are scheduled for release. US consumer prices increased more than expected in May, supporting the dollar and weighing on bonds. Stocks ended higher while crude oil fell and gold dipped slightly.
- U.S. stock futures are pointing to a flat open as traders await Trump's tax plan announcement later today. Asian markets closed higher on expectations for tax reforms while European markets are hovering around flat.
- BCE reported a dividend hike but profits took a hit from Manitoba Telecom acquisition costs. Barrick will spend $500M over 5 years upgrading its Argentine mine. Canadian Utilities announced record Q1 earnings.
- Key Canadian economic data this week includes retail sales and GDP figures. In the U.S., markets will watch for employment costs, GDP, and University of Michigan consumer sentiment numbers.
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1) Investment banks had a very profitable year due to high levels of corporate mergers and debt/equity issuances. However, signs point to an impending slowdown in investment banking.
2) Markets have weakened, with the Nasdaq down 22% and high-yield bonds performing poorly. Underwriting revenues fell at major banks in Q3.
3) Investment banking stocks have dropped sharply, reflecting concerns about exposure to troubled telecom loans and bonds. The record level of mergers and acquisitions is also unlikely to continue given market conditions.
- US and Asian stock futures fell while European stocks dropped on concerns about global growth and the outcome of Greece's debt swap.
- Data showed the eurozone economy contracted 0.3% in Q4 and a report warned a Greek default could cost the eurozone over $1.36 trillion.
- Private investors holding around 20% of Greek bonds have agreed to participate in the debt restructuring, which aims to cut privately held Greek debt by 53.5% and help secure Greece's second bailout.
- Aecon Group reported a 143% rise in quarterly earnings as margins improved on lower costs.
- US stock futures are pointing to a lower open ahead of the Federal Reserve's policy decision later in the day, while major Asian markets fell and European stocks are trading lower
- In corporate news, Loblaw reported higher than expected profit as discounts attracted more customers, while Torstar posted a bigger than expected loss as print advertising declined
- Apple reported a surprise fall in iPhone sales for its fiscal second quarter, indicating customers may have held off purchases in anticipation of the new iPhone expected later this year
The document provides an outline and details about the Fortune 500 list. It discusses what the Fortune 500 is, who founded Fortune Magazine, and the four main ranking factors (sales growth, assets, earnings, and capitalization). It then lists the top ten companies in 2013, including Walmart at #1, ExxonMobil at #2, and Chevron at #3. For each top company, it provides the CEO name, headquarters location, brief background on the company's performance in 2012-2013, and revenues and profits for the fiscal year.
U.S. markets saw mixed returns in December as signs of economic recovery were offset by weaknesses emerging in the housing and bond markets. While job growth and consumer confidence recovered from hurricanes, housing data showed declining sales and rising inventories. Bond yields also inverted for the first time since 2000, a potential warning sign of recession. The Federal Reserve raised rates again but investors hoped this signaled the end of the tightening cycle. Overall, the document assessed recent economic indicators and market performance in December and provided an outlook looking into 2006.
- US and European stock futures fell, along with Asian stocks, due to concerns about global economic growth and the outcome of Greece's debt restructuring.
- European stocks dropped as a report showed the eurozone economy contracted 0.3% in Q4. Banks and resource stocks declined.
- Private investors holding about 20% of Greek bonds involved in the debt swap have agreed to participate in the swap, which aims to reduce Greece's debt by 53.5% and help secure its bailout.
- Asian stocks fell sharply led by declines in mining stocks, following global markets lower on growth concerns. The Hang Seng dropped 2.2% and Shanghai fell 1.4%.
The document summarizes and analyzes recent economic data and events that impact commodity markets. It discusses:
- The July US jobs report which showed 215,000 jobs added and unemployment at 5.3%, a result that was neither strongly positive nor negative. This leaves uncertainty around the timing of the Fed's first rate hike.
- Comments from an Atlanta Fed president supporting a September rate hike if data holds.
- Implications for commodity markets, including that oil and natural gas prices declined last week while uncertainty persists over the Fed and US dollar.
- Upcoming seasonal trends that may lead to natural gas price increases in the next few months.
Similar to Reuters News - the day ahead 08.20.13 (20)
The document provides updates on developments in the financial industry, including:
1) NYSE Euronext working to standardize options regulatory fees across exchanges.
2) The New York Portfolio Clearing planning to clear over-the-counter interest rate swaps by the end of 2011.
3) Discussion around whether multiple inconsistent trading halt rules from different market centers can be sustained.
The document provides a summary of various news stories related to financial markets and trading:
- The SEC approved single-stock circuit breakers for S&P 500 stocks to pause trading if the price changes by 10% in 5 minutes, with plans to expand the program.
- Citi launched a hybrid trading platform called TotalTouch that combines electronic and high-touch trade facilitation.
- Large asset managers are meeting with legislators to discuss ways to clamp down on the high rate of order cancellations by high-frequency trading firms.
- Speakers at a conference criticized the decision to cancel trades from May 6th that moved more than 60% from the previous price.
Prop Traders, Regulatory Experts, & Senior Consultants on New Regulation, Satisfying the Need for Speed, and Applying HFT as a Method to Achieve Trading Objectives
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This document announces a regulatory compliance forum for the financial industry to be held on May 20, 2010 in New York City. The forum will provide hands-on strategies for financial institutions to cost-effectively manage increasing compliance obligations from regulators while reducing spending. Key topics will include preparing compliance departments to handle greater responsibilities, identifying all relevant data within an organization, determining the right balance of internal and external legal counsel, and updating infrastructure for new privacy and security demands in a regulated landscape. The event features several high-level speakers from major financial institutions and consulting firms.
Buy-Side Tech Global Equities Trading Summit 2010Lisa Krow
This document provides an agenda for the "Buy-Side Tech: Global Equities Trading Forum" conference taking place on October 25-26, 2010 in New York City. The keynote speaker will be Richard Bookstaber from the SEC who will discuss past, present, and future financial services industry regulation. Over 50 speakers from hedge funds, asset managers, and exchanges will discuss topics like high frequency trading, emerging market trading, ETF strategies, and regulatory compliance. The agenda includes panels, presentations, and networking activities over the two-day event.
Next Generation Algorithmic Trading Strategies Summit 2010Lisa Krow
This document provides an agenda for the Algorithmic Trading Strategies Summit taking place August 25-27, 2010 in New York City. The summit will feature over 25 speakers and panel discussions on topics related to algorithmic trading strategies across different asset classes. Speakers include experts from banks, hedge funds, exchanges, and regulatory agencies. Panel topics include navigating liquidity, the future of algorithmic trading, quantitative portfolio construction, building versus buying a trading infrastructure, risk management for algorithms, and the impact of new regulations. The event is aimed at providing insights for buyside firms, banks, and technology providers on strategies, technology, and the evolving regulatory environment related to algorithmic trading.
FT - Check the box due diligence is not enoughLisa Krow
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- Investors need to scrutinize funds closely and ensure transparency around the stated strategy, risks, and how the funds would likely perform in different market conditions.
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Financial Times - The Asset Based Lending Industry After The DisasterLisa Krow
The document is a single page from a digital newspaper or magazine dated August 20, 2010. It appears to be from a software company's digital publishing platform for creating and displaying electronic papers. The brief summary does not provide much contextual information about the specific content of the referenced page.
The financial crisis was tough on asset-backed lending funds, and a spate of redemptions saw the space shrink considerably. But the launch this year of a new $1bn fund from FrontPoint Partners suggests that direct lending and ABL is making a comeback, and, due to the restrictions of Dodd-Frank, the space offers a wealth of opportunity for smaller niche players.
This document appears to be an index of companies mentioned in a financial publication, along with page references. It lists over 200 companies across various industries, along with the page numbers where each company is discussed in the referenced publication. The index is organized alphabetically by company name.
The document summarizes different perspectives on whether family offices should aim primarily for wealth creation or preservation. It includes views from four family office advisers:
1) Catherine Grum of Salamanca Group argues that wealth preservation should always be the starting point, as replicating the level of wealth creation that built the initial fortune may be difficult. Key risks to guard against include unexpected liabilities and potential conflicts between family members.
2) Ron Gong of CTC Consulting discusses how a family's spending rate and poor capital management can pose greater risks than investment performance. Conducting capital sufficiency analysis can educate families on withdrawal rates and developing prudent fiscal policies for each generation.
3) Charlotte Thorne of Capital Generation Partners
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Progressively lower fees and smaller funds will help increase investor returns according to Jonathan Kanterman and Eric Uhlfelder
Stillwater Capital Partners manages three hedge funds that posted double-digit returns in 2006 through diversified strategies including asset-backed lending, fund of funds, and multi-strategy funds. The asset-backed lending fund makes short-term bridge loans to real estate developers, law firms, and individuals for insurance premiums, earning steady returns through low volatility and correlation to equity and bond markets. Stillwater also manages a fund of funds that seeks out niche and creative asset-backed managers around the world. While conducting extensive due diligence, they avoid managers that demonstrate greed through opaque fee structures or misrepresenting fund capacity.
The document provides information on the top 10 performing fixed income funds for the past three years according to Barclay Managed Funds Report. The Stillwater Asset Backed Offshore Fund is highlighted and discussed in more detail. It was ranked #6 in the fixed income category with a 10.56% annual return. The fund makes short term loans secured by collateral to underserved borrowers. Since 2004, it has consistently been one of the top risk-adjusted hedge funds worldwide providing consistent, low volatility returns. Stillwater Capital Partners manages the fund and offers similar asset-backed lending strategies to institutional investors.
World Pension Forum - Annual Summit 2014- HandbookLisa Krow
The 4th Annual Aspen Summit on Reaching New Heights will take place from August 24-27, 2014 at the Aspen Meadows Resort in Colorado. It is organized by the World Pension Forum and will bring together institutional investors and pension fund managers to discuss challenges, opportunities, and the evolving investment landscape. The agenda includes keynote speeches and panel discussions on topics such as the future of healthcare, infrastructure investments, manager selection, and fiduciary responsibilities. Events include breakfasts, lunches, and a dinner held at the Lynn Britt Cabin with jeep transportation provided. Business casual attire is recommended except for the cabin dinner which is casual.
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1. THE DAY AHEAD
REUTERS NEWS North American Edition For Tuesday, August 20, 2013
Stocks edged lower on Monday as investors waited for clar-
ity on Federal Reserve stimulus policy. Treasury yields rose
to new two-year highs, while gold fell. The euro rose against
major currencies after comments from the Bundesbank on
interest rates. Oil ended lower in choppy trading.
MARKET RECAP COMING UP
Home improvement retailer Home Depot is expected to post
higher profit, a day ahead of the quarterly report from rival Lowe's.
The market is expected to get a better
read of the strength of the U.S. hous-
ing recovery and consumer willing-
ness to invest in home renovation
when the top home improvement
chains post financial results for the
second quarter. Many on Wall Street
expect Home Depot to outperform
Lowe's on the same-store sales front.
J.C. Penney reports its quarterly results, and the market is likely to
focus on the extent of the sales and gross profit margins decline as
well as any depletion of cash. The company, which just ended a
faceoff with top investor Bill Ackman, is trying hard to win back
shoppers who defected last year after Penney ditched discounting.
Look for TJX -- the owner of low-price TJ Maxx and Marshall
chains – to post an increase in quarterly profit versus the same
period one year ago. TJX is gearing up to launch an online store by
the end of this year and investors will be keen to hear any com-
ments on its progress, as this is the company's second attempt at e
-commerce after a 2005 failure.
Investors will get a read of demand for gadgets in the back-to-
school season when Best Buy reports its results for the second
quarter. Wall Street will also look for an update on the progress of
the turnaround at the world's largest consumer electronics chain.
Top global miner BHP Billiton reports annual results. The com-
pany is expected to be the only major miner to report a rise in profit
for the June half, thanks to cost-cutting and rising volumes offset-
ting drops in iron ore, copper and coal prices. The company may
expound on its news that U.S. authorities have laid out grounds for
possible enforcement action against the top global miner for corrupt
practices, stepping up a four-year probe linked partly to its 2008
Olympics sponsorship.
Mexico reports its GDP figures, and Latin America's second big-
gest economy is expected to show growth of 3.5 percent this year,
slower than in 2012 but holding up well in the face of weak global
demand.
Commodities trader and miner Glencore reports its first set of
earnings since it completed the takeover of Xstrata. Analysts ex-
pect a dip in profit on weaker coal, nickel and zinc prices, but the
focus is likely to be on any hints as to the outcome of Glencore's
100-day review after the Xstrata deal. The full results of that analy-
sis is due early in Sept.
KEY ECONOMICS EVENTS ET/GMT REUTERS POLL PRIOR SOURCE
ICSC/GS Report ww for w/e 08/17 0745/1145 -- -0.2 pct International Council of Shopping Centers/Goldman Sachs
Chicago Fed Index for July 0830/1230 -- -0.13 Federal Reserve Bank of Chicago
Redbook mm for w/e 08/17 0855/1255 -- 0.4 pct Redbook Research
SEMI Book/Bill for July 1800/2200 -- 1.10 Semiconductor Equipment & Materials Intl. (SEMI)
STOCKS Close Change % Chng Yr-high Yr-low
DJIA 15009.36 -72.11 -0.48 15658.40 12471.50
Nasdaq 3589.09 -13.69 -0.38 3694.19 2810.80
S&P 500 1645.93 -9.90 -0.60 1709.67 1343.35
Toronto 12588.06 -148.86 -1.17 12904.71 11759.04
Russell 982.70 -6.42 -0.65 1022.04 846.24
FTSE 6465.73 -34.26 -0.53 6875.62 5897.81
Eurofirst 1224.58 -6.85 -0.56 1258.09 1111.11
Nikkei 13758.13 108.02 0.79 15942.60 10398.61
Hang Seng 22463.70 -54.11 -0.24 23944.74 19426.36
TREASURIES Yield
10-year 2.8804 -15 /32
2-year 0.3548 -1 /32
5-year 1.6076 -7 /32
30-year 3.8976 -28 /32
Price FOREX Last % Chng
Euro/Dollar 1.3337 0.06
Dollar/Yen 97.48 -0.04
Sterling/Dollar 1.5652 0.16
Dollar/CAD 1.0341 0.06
COMMODITIES $ Price $ change % change
Front Month Crude /barrel 107.00 -0.46 -0.43
Spot gold (NY/oz) 1366.22 -9.68 -0.70
Reuters/Jefferies CRB Index 293.64 0.58 0.20
BIG MOVERS $ Price $ change % change
YRC Worldwide 14.45 -1.82 -11.19
Jinkosolar Holding 12.88 -1.54 -10.68
Soufun Holding 40.26 4.09 11.31
MannKind 6.37 0.60 10.40
For The Day Ahead - Canada, click here
For U.S. - Top News, click here
2. 6
ANALYSIS AND INSIGHT
U.S. firms' blaming dollar for weak profits may be premature
By Caroline Valetkevitch
U.S. companies' warnings that a stronger dollar could drag on
profits in the second half of the year could prove overstated.
The dollar has lately been defying expectations of a rise, weak-
ening at a time when the betting had been on strengthening as
the U.S. economy outpaced other major regions.
If the weakness continues, the dollar could become a help in-
stead of a hindrance for companies that rely heavily on selling
goods and services abroad, particularly if Europe shows addi-
tional signs of improvement and China's pace of growth be-
comes stable.
A pick-up in overseas sales would be boon for U.S. multination-
als, whose second-quarter results fell short for companies that
derive more sales from the United States.
"A headwind that they're expecting in the multinationals might
not be there," said Paul Mendelsohn, chief investment strategist
at Windham Financial Services in Charlotte, Vermont.
S&P 500 companies have made their complaints about the dol-
lar loud and clear this earnings season.
Kimberly-Clark's chairman referred to a "more negative currency
environment" while Procter & Gamble pointed to dollar strength-
ening and DuPont cited increased headwinds for diminished
results.
A Reuters analysis of about 250 S&P 500 companies found that
one of four this quarter cited their competitive disadvantage in
selling abroad when the dollar is strong.
A negative currency effect is a particular worry among compa-
nies for the second half of the year - Colgate-Palmolive, among
others, cut its full-year outlook due to the dollar's strength.
And it's no wonder many companies have that view. Most
economists are forecasting the greenback will strengthen this
year, with a Reuters poll released Aug. 9 forecasting the euro
will fall to $1.260 in six months. As of Friday, the euro was at
$1.333. The dollar is expected to rise to 104 yen six months
from now; it is currently at 97.59 yen.
Even though the dollar has shown a lot of volatility, it hasn't
gained much this year, weakening recently against the euro, yen
and pound. The U.S. dollar index is down 2.2 percent so far in
the third quarter, and it is up just 2 percent since the start of the
year.
LOOKING FOR AN EXCUSE?
The dollar may be an easy scapegoat for weak global growth.
S&P companies with more overseas exposure underperformed
in the second quarter, ranging from technology companies like
Cisco Systems to staples like Wal-Mart Stores, both of which
cited international weakness for lackluster results.
Year-over-year earnings growth for companies with more than
half of their sales outside the United States fell far short of do-
mestically oriented companies, declining by 4.9 percent com-
pared with a 7.6 percent gain for more U.S.-oriented companies.
"Earnings have sort of gone nowhere fast, so perhaps (chief
financial officers) are trying to justify a lack of earnings growth
and using that as an excuse," said Martin Leclerc, chief invest-
ment officer and portfolio manager of Barrack Yard Advisors in
Bryn Mawr, Pennsylvania.
While many companies have cited the dollar and the currency
environment as a negative, most have offered few clues as to
how they expect to deal with the negative effects from the dollar.
On its strategies for managing currency risk, Procter & Gamble
said the company doesn't hedge translation exposure and pre-
fers instead to use natural and operational hedges.
"It will have downward pressure, but I think it is premature to
speculate as to what that would be," Clorox CFO Steve Robb
said in an Aug. 1 conference call.
Other companies have simply said they are monitoring the situa-
tion. Some even said the impact of recent dollar strength would
be temporary; the dollar's recent pattern suggests they might be
right.
How Ackman's Herbalife bet inflamed Wall Street passions
By Jennifer Ablan and Matthew Goldstein
The origins of a vitriolic battle that has pitted billionaire hedge
fund manager Bill Ackman against rivals such as Carl Icahn,
Dan Loeb and George Soros can be traced back to a routine
event in the world of investor activism: The unveiling in late De-
cember of Pershing Square Capital Management's bearish bet
against Herbalife Ltd.
Hedge fund industry sources said the timing of the three-hour
presentation - less than a week before Christmas - riled other
investors and brought out into the open festering resentment
against Ackman, already seen by some as too arrogant even for
the alpha-male world of hedge fund managers.
The source of the frustration was the instant – and so far,
ephemeral – boost Pershing Square got by publicizing its bet
just as the year was ending. The Dec. 20 presentation led to a
21 percent plunge in Herbalife's stock. That meant Ackman's $1
billion wager helped his $11 billion hedge fund gain 5.8 percent
that month, and end the year up 12.4 percent. The results were
far better than average for hedge funds last year, which matters
in an intensely competitive world where strong performance be-
gets fees as well as fame.
A Pershing Square representative said on Friday the timing of
the Herbalife presentation before a crowd of 500 was dictated
solely by when the firm completed research for laying out its
argument that the nutritional supplement manufacturer is a pyra-
mid scheme. Herbalife's shares have soared 97 percent this
year, costing Ackman more than $300 million in paper losses,
but the hedge fund is sticking by its bet. Herbalife has repeatedly
denied Ackman's claims.
The Pershing Square representative, when asked about criticism
of the event's timing, said: "Our strong preference would have
been to do that presentation earlier."
Icahn, who has said he finds Ackman too arrogant for his taste,
took a 16 percent stake in Herbalife shortly after Pershing
Square announced its short position, and has not wasted any
opportunity - on TV or in other media - to take Ackman to task
over the event. Soros' firm recently bought 5 million shares of
Herbalife and Third Point's Dan Loeb made hundreds of millions
early this year buying and selling the stock.
When asked in an interview with Reuters about the feud and
why other managers keep joining the fray in criticizing Ackman
of late, Icahn said: "Huh? In recent weeks? What's changed?"
Ackman drew a fresh round of criticism earlier this month, in-
cluding from Starbucks Corp CEO Howard Schultz, after he
launched a public fight with the board of struggling retailer J.C.
Penney Co Inc, where Pershing has been invested for nearly
three years, mounting an unsuccessful campaign to make the
retailer appeal to a more upscale audience. The fight ended with
Ackman resigning from the board last week.
These battles underscore what has been a rough year for Ack-
man, one of the more closely followed names in the $2.25 trillion
hedge fund industry. Pershing Square is up just 2.6 percent as
of mid-August, short of the average 4.21 percent return for the
hedge fund industry and the 16.61 percent gain in the Standard
& Poor's 500 Index. The paper losses registered by the fund on
Herbalife and Penney have taken the biggest bite out of per-
formance.
These battles are raising questions in the industry about Ack-
man's style of investing, which employs a combination of theat-
THE DAY AHEAD For Aug 20, 2013
3. 7
ANALYSIS AND INSIGHT (continued)
rics and behind-the-scenes work with corporate boards to advo-
cate for management and strategic changes.
"Ackman is a good example of 'It is OK to be the smartest guy in
the room, but it may not be the best idea to tell everyone that
you're the smartest guy in the room,''' said Jonathan Kanterman,
an independent alternative investment consultant. "People can
get a little turned off by that."
Supporters maintain it can be easy to mistake self-confidence
for arrogance. Ackman has bounced back from setbacks before,
and his reputation is based on some rather spectacular suc-
cesses.
In 2011, for example, the investor took a big stake in Canadian
Pacific Railway Ltd and, within two years, made a $2 billion profit
after forcing board and management changes. Before that, he
turned a $60 million investment in mall operator General Growth
Properties into a stake now worth $2.3 billion.
Hedge fund manager John Hempton, who has taken the other
side of Pershing Square on the Herbalife trade, said he thought
Ackman was "incredibly smart and profoundly stupid."
"When he is smart, he is smarter than me. And when he is stu-
pid, he is aggressive about it," said Hempton, the chief invest-
ment officer of Bronte Capital Management.
BREAKINGVIEWS
Strategic nepotism may give Wall St a Chinese burn
By John Foley
Investment bankers are only as good as their contacts. In China,
that may present Wall Street with a problem. The Securities
and Exchange Commission is investigating whether JPMor-
gan hired relatives of powerful people to win business, accord-
ing to the New York Times. If it decides the answer is “yes”, for-
eign banks will find it even harder to get a foot in the door.
Strategic nepotism, such as giving an internship to the offspring
of a would-be client, isn’t limited to China. But in the People’s
Republic, where institutions are weak and corporate governance
poor, “guanxi” is what gets deals done. Most banks have a
princeling or two on the payroll. In China’s socialist market
economy many company bosses are also ministers, which
makes any special treatment a potential violation of the U.S.
Foreign Corrupt Practices Act.
Proving wrongdoing is not easy. True, it’s possible to envisage a
case where nepotism and corruption come together. Daimler,
the German carmaker, settled with the SEC in 2010 after the
watchdog accused it of paying commissions to relatives of offi-
cials, including in China, without them actually doing any work,
in return for contracts.
But it’s likely that in most cases no explicit quid pro quo exists.
Consider a bank that hires the progeny of an official with the
hope, but not the promise, of winning business. There’s no guar-
antee that strategy will pay off. In many cases, it may just create
a management headache. Powerful people come with powerful
personalities, as Morgan Stanley discovered when it tied up with
CICC, the investment bank run by ex premier Zhu Rongji’s son
Levin.
In most cases, it shouldn’t be difficult to argue that most princel-
ings are qualified for the job, given the elite’s better access to
education and opportunity. But if the SEC nonetheless deems
JPMorgan’s hiring amounts to bribery, the rest of Wall Street will
have a problem. With so many financial professionals in China
touting their guanxi, it may be hard to know when a line has
really been crossed. As for the truly connected, if foreign banks
can’t hire them, it’s a fair bet that local rivals will.
CONTEXT NEWS
U.S. authorities have opened an investigation into whether
JPMorgan hired the children of powerful Chinese officials to help
it win business in China, according to the New York Times.
A report posted in the Times' online Saturday edition cited a
confidential U.S. government document as its source for the
story on the China hiring probe. The Times said the probe is a
civil investigation by the Securities and Exchange Commission’s
anti-bribery unit.
The Times said JPMorgan hired Tang Xiaoning, the son of Tang
Shuangning, a former Chinese banking regulator. Tang
Shuangning is now the chairman of the China Everbright Group,
a state-controlled financial conglomerate.
The Hong Kong office of JPMorgan also hired Zhang Xixi, the
daughter of a now-disgraced Chinese railway official, and went
on to help advise his company, which builds railways for the
Chinese government, on its plans to become a public company,
the Times said.
Reuters could not immediately reach the SEC for comment.
JPMorgan declined to comment.
(The author is a Reuters Breakingviews columnist. The opinions
expressed are his own)
THE DAY AHEAD For Aug 20, 2013
StarMine SmartEstimates® predict future earnings more accurately than consensus (or mean) estimates by putting more weight on the recent forecasts of StarMine's top-
rated analysts. StarMine is a subsidiary of Thomson Reuters. The predicted surprise is the difference between the SmartEstimate and consensus. When a predicted surprise
is 2 percent or more, history shows that you can anticipate an earnings surprise in the same direction with an accuracy rate of 70 percent.
Company Smart Estimate Predicted Surprises Market Cap. Industry
New York & Co Inc -$0.01 $0.14 $360 Specialty Retail
Yingli Green Energy Holding Co L -$0.28 $0.13 $593 Semiconductors & Semiconductor Equipment
Caseys General Stores Inc $1.33 $0.07 $2,536 Food & Staples Retailing
Brown Shoe Company $0.23 $0.05 $952 Specialty Retail
American Woodmark Corp $0.34 $0.03 $488 Building Products
Sanderson Farms Inc. $2.70 $0.03 $1,669 Food Products
Analogic Corp $1.03 $0.02 $921 Health Care Equipment & Supplies
Jos A Bank Clothiers Inc $0.51 -$0.09 $1,147 Specialty Retail
Tower Group International Ltd -$0.74 -$1.43 $923 Insurance
PREDICTED RESULTS SURPRISES FROM STARMINE