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☆ 'Big Short' fund manager Burry buys another prison stock
▼ + stars: | 2022-11-14 | by ( Carolina Mandl | ) www.reuters.com time to read: +1 min

The move comes after fund manager Burry dumped a dozen positions in the second quarter, including Facebook parent Meta Platforms (META.O), and replaced them with a new stake in prison company Geo Group Inc (GEO.N). A regulatory filing on Monday showed he bought roughly 1.5 million additional shares in Geo Group in the third quarter. Burry also added $7.8 million stake in CoreCivic, the filing showed. Shares in Geo Group, CoreCivic and Aerojet are up year-to-date, outperforming the S&P 500, which is down 16.3% on the year. Fund managers are not required to disclose short positions, which profit when a company's shares fall.

Hedge fund Farallon Capital, for instance, bought nearly 7.8 million shares of Twitter during the quarter that ended Sept. 30, while Franklin Resources, the parent company of mutual fund firm Franklin Templeton, added nearly 2.6 million shares to an existing position of less than 100,000 shares. Shares of Twitter fell to as low as $33 during the third quarter before ending September near $44. The value of Twitter shares jumped 23.2% in October when Musk completed the deal on Oct. 27 by paying $54.20 per share. While some funds reaped short-term rewards, other investors left some potential gains on the table by selling before the October rally in Twitter shares. Wells Fargo & Co (WFC.N) sold 3.7 million shares of the company, while ClearBridge Investments LLC sold 1.9 million shares.

The S&P is 10.6% above its Oct. 12 closing low for 2022, though still down 17% for the year. "If you're sitting in cash and the market rallies, you might think you were greedy waiting for a bigger discount." Institutional investors' exposure to stocks was low going into Thursday's inflation report. Last month's fund manager survey from BofA Global Research showed investors' cash levels at their highest since April 2001. Lewis said he had not seen so-called real money – a term for mutual funds, pension funds and other non-leveraged market investors – participating in Thursday's rally, though he saw no evidence of selling from that cohort, either.

That could support a rally in 10-year Treasury bonds and help stocks extend their recent gains, they said. "I think the markets are rallying at the prospect of gridlock," said Jack Ablin, chief investment officer at Cresset Capital in Chicago. Historically, stocks have tended to do better under a split government when a Democrat is in the White House, with investors attributing some of that performance to political gridlock that prevents major policy changes. The benchmark index has risen about 5% over the last month, cutting its year-to-date decline to about 20%. With U.S. equity options market positioned for relative calm, a surprisingly strong showing by Democrats could upend markets.

☆ Factbox: How Wall St and billionaires have donated to U.S. elections
▼ + stars: | 2022-11-08 | by ( John Mccrank | ) www.reuters.com time to read: +4 min

Prior to the U.S. Supreme Court's 2010 Citizens United ruling, which struck down limits on political contributions by corporations or unions, political contributions of billionaires made up around 3% of overall political contributions, she said. Griffin said in a statement: "I hope that my political engagement will help to protect the American Dream. * Crypto-billionaire Sam Bankman-Fried of FTX was the sixth-largest donor, at $39.8 million with the vast majority going to help Democrats. * Elliott Management founder Paul Singer spent $19.7 million to support Republicans, making him the 15th-largest donor. * Renaissance Technologies founder Jim Simons, together with Marilyn Simons, were the 20th-largest donors, spending nearly $16 million to help Democrats.

☆ BNP Paribas set to expand Exane in the U.S.
▼ + stars: | 2022-11-08 | by ( Carolina Mandl | ) www.reuters.com time to read: +1 min

NEW YORK, Nov 8 (Reuters) - BNP Paribas (BNPP.PA) is expanding its equity research house Exane in the United States, after the euro zone's biggest lender took it over last year, the bank said on Tuesday. Michael Rietbrock has joined Exane from Cantor Fitzgerald in October as head of U.S. research, according to BNP. The move comes as BNP aims to strengthen its equities unit and diversify the lender's business, best known for derivatives. As part of this strategy, BNP acquired last year a remaining 50% stake in cash equities execution and research house firm Exane, which covers 800 stocks globally. It's really where we want to grow," Nicolas Marque, head of global equities at BNP Paribas told Reuters.

☆ Global hedge funds advance in October amid stocks rally
▼ + stars: | 2022-11-07 | by ( ) www.reuters.com time to read: +1 min

Equities, event-driven and macro hedge fund indexes went up last month, according to HFR, adding two-thirds of all hedge funds posted gains. Only macro hedge funds, however, delivered positive returns to investors in the first 10 months of 2022. In October, macro funds rose 0.95%, raising their gains in the year to 11.51%. Event-driven hedge funds soared 3.7% in October, the highest return among all categories. Equities hedge funds jumped 2.93%, posting their first gain since August and their highest monthly return this year.

Reuters Graphics Reuters GraphicsAmong factors fueling the swings is a flood of options trades, many of them short-term in nature. A surge in options trading tends to boost hedging by market makers – typically large banks or financial institutions that facilitate the trades and need to position in equity futures to reduce their risk from unexpected market moves. Their furious buying and selling can heighten short-term swings in stocks, adding to broader volatility, market participants said. LOW POSITIONINGMeanwhile, many so-called "real money" investors such as pension funds and mutual funds have cut their stock allocations to the bone after months of equity volatility, another factor fueling stock swings. At the same time, under-positioned investors have recently tended to jump aboard stock rallies, further extending the moves, market participants said.

☆ Greenlight's Einhorn optimistic Twitter deal with Musk will close
▼ + stars: | 2022-10-21 | by ( Nupur Anand | ) www.reuters.com time to read: +2 min

Einhorn told his investors in August that he had bought a stake in Twitter, and now said he believes the lawsuit in Delaware that could decide the fate of the deal "is going well for TWTR." Register now for FREE unlimited access to Reuters.com RegisterEarlier this month, Musk reversed course again and said he would proceed with the deal on original terms. A Delaware judge ordered a pause to Twitter's lawsuit against Musk, giving the billionaire until Oct. 28 to close the deal. "We expect that one way or another, the deal will close at or near the originally agreed upon price," Greenlight said, referring to the $54.20 price per share the deal was originally proposed. Greenlight's manager said the investment in Twitter is "inherently short-term," adding the hedge fund plans to exit its position upon resolution of the platform sale.

☆ Hedge funds see $26 bln in net outflows in Q3 - HFR
▼ + stars: | 2022-10-20 | by ( ) www.reuters.com time to read: 1 min

NEW YORK, Oct 20 (Reuters) - Global investors redeemed $26 billion from hedge funds in the third quarter, in the second consecutive quarter of net asset outflows, industry data provider HFR said on Thursday. In the year, investors pulled out $33.7 billion from hedge funds worldwide, HFR showed, as poor performance has spooked pension funds, endowments and family offices. The HFRI fund-weighted composite index is down 6.66% this year through September, as portfolio managers struggle to navigate highly volatile markets. Assets in the hedge fund industry fell almost $220 billion since the end of 2021, to $3.7 trillion, hit by poor performance and redemptions. Register now for FREE unlimited access to Reuters.com RegisterReporting by Carolina Mandl, in New YorkOur Standards: The Thomson Reuters Trust Principles.

Investment banking revenue more than halved to $1.3 billion, with declines across the bank's advisory, equity and fixed income segments. Morgan Stanley's net revenue in the quarter fell 12% to $13 billion. The bank reported a profit of $2.49 billion, or $1.47 per share, for the quarter ended Sept. 30, compared with $3.58 billion, or $1.98 per share, a year earlier. Analysts on average had expected a profit of $1.49 per share and revenues of $13.3 billion, according to Refinitiv IBES data. Morgan Stanley's wealth management business, which tends to generate steady income, was a surprise bright spot, posting a 3% rise in revenue, helped by a 49% jump in net interest income amid rising Federal fund rates.

JPMorgan & Chase (JPM.N), Citigroup, Deutsche Bank (DBKGn.DE) and BNY Mellon act as depositary banks for most Russian depositary receipt programs, according to Clearstream. In statements to clients, some banks cited difficulties verifying there are enough shares to execute cancellations of depositary receipts. For example, BNY Mellon cited such a difficulty with Global Depositary Receipts in Russian gas company Novatek. While depositary receipts are under custody of global banks, the shares they represent are parked in Russia. Investors are meanwhile discussing ways online to meet the Russian requirements and how to pay fees to Russian banks.

☆ Bridgewater's Dalio warns of a 'perfect storm' for economy
▼ + stars: | 2022-10-11 | by ( Carolina Mandl | ) www.reuters.com time to read: +2 min

GREENWICH, Conn., Oct 11 (Reuters) - Ray Dalio, the billionaire investor who built Bridgewater Associates into one of the world's biggest hedge funds, said a "perfect storm" is forming that will spread economic pain as the U.S. Federal Reserve raises interest rates. Domestic tension in the U.S. population caused by "irreconcilable differences" and a yawning wealth gap, combined with international conflicts, are contributing to the perfect storm, he said. Register now for FREE unlimited access to Reuters.com Register"The Fed and the government together gave enormous amounts of debt and credit and created a lurch forward. So now we're going to create a giant lurch backward," Dalio said at the Greenwich Economic Forum. read moreThe 73-year-old investor will keep his seat on Bridgewater's operating board of director and will mentor the firm's chief investment officers.

☆ Citadel CEO says 60/40 portfolio more attractive after yields spike
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, Sept 28 (Reuters) - Recent increases in U.S. Treasury yields are set to improve the attractiveness of investment strategies such as the 60/40 portfolio, said Ken Griffin, the billionaire founder of Citadel Securities, one of the world's biggest market-making firms. "The 60/40 portfolio is much better today than at any point in recent time," he said, speaking at an investment conference in New York on Monday, and with reference to a common investment strategy which splits allocations between stocks and bonds on a 60%/40% basis to mitigate risk. Yields on the 10-year benchmark government bonds topped 4% on Wednesday, hitting a 12-year high. "Right now, that's a much more compelling value proposition than it was back then at 1% yield," Griffin said. Register now for FREE unlimited access to Reuters.com RegisterReporting by Carolina Mandl and Davide Barbuscia in New YorkOur Standards: The Thomson Reuters Trust Principles.

"There will be impacts, there’s correlations ... some market volatility, and then how it weighs in the global growth picture," said Paul Malloy, head of municipals at Vanguard. The wild swings in the pound have ricocheted across currency markets, where volatility was already climbing. According to the widely watched Deutsche Bank Currency Volatility Index , volatility across currencies on Wednesday hit its highest level since the March 2020 COVID-19- induced market meltdown, jumping more than 20% from levels last week. Closely followed indicators of financial stress remain contained. U.S. stock market volatility as measured by the "fear index," the VIX (.VIX), has also climbed in recent days but remains below its 2022 highs.

☆ Deputy U.S. Treasury chief says soft landing is possible
▼ + stars: | 2022-09-28 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, Sept 28 (Reuters) - Deputy U.S. Treasury Secretary Wally Adeyemo said on Wednesday the Biden administration feels confident about the U.S. economy going forward and that it is possible to bring down inflation while maintaining growth. "We come into this moment from a position of strength," he said, adding that consumer and corporate balance sheets are in good shape. Asked whether the U.S. economy was heading to a recession, Adeyemo said there was "a path" to reduce price pressures while maintaining momentum in the U.S. economy and a healthy labor market. Adeyemo, however, said a "soft landing" - that the Fed may tame inflation and avoid a recession - was possible, but that external factors that have led to higher prices such as Russia's war in Ukraine and COVID-19 lockdowns continue to be headwinds for the U.S. economy. Register now for FREE unlimited access to Reuters.com RegisterReporting by Davide Barbuscia, Carolina Mandl, and Doina Chiacu; Editing by Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

British Pound Sterling and U.S. Dollar notes are seen in this June 22, 2017 illustration photo. Deutsche Bank's Currency Volatility Index – the historical volatility index of the major G7 currencies - jumped to a two-and-a-half year high of 13.55 on Monday. While Sterling and the yen have fared extremely poorly against the dollar, the greenback's meteoric rise has spared no major currency. Reuters GraphicsMoves have surprised long-time currency traders and investors. "Our team is working around the clock from multiple global locations," said Kamboj, adding he is not trading sterling because the pound's direction now depends entirely on how the Bank of England reacts.

REUTERS/Brendan McDermid/File PhotoSept 19 (Reuters) - Just months ago, investors worried the Federal Reserve was not fighting inflation aggressively enough. Several jumbo rate hikes later, some now fear the Fed will plunge the economy into recession by tightening monetary policy too quickly. Investors are also pricing in meatier rate hikes down the road, with the terminal rate for U.S. fed funds now at 4.4%. read moreDoubleLine’s Chief Executive Jeffrey Gundlach, who had in June criticized the Fed for moving too slowly, told CNBC last week he was worried the Fed might hike rates too far. Some investors think the economy may be resilient enough to withstand a more aggressive Fed.

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