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West Palm Beach (HedgeCo.net) – “Hennessee Group research and discussions with hedge fund managers has lead us to believe that the 20 year secular bull market in bonds is over.” Charles Gradante, Co-Founder of hedge fund investor consultant, Hennessee Group LLC, said of the 9 year high point seen this month in hedge funds.
“We see a problem growing in the bond market. The Government is issuing more debt than it is buying back. This has to lead to rates increasing and equity PE ratios adjusting downward. Our contacts among hedge fund managers continue to buy gold and short Treasuries. However, Hennessee Group expects the Treasury and Fed to put a short squeeze on at an opportune time.”
The Hennessee Hedge Fund Index advanced +5.68% in May (+11.40% YTD), while the S&P 500 increased +5.31% (+1.76% YTD), the Dow Jones Industrial Average advanced +4.07% (-3.14% YTD), and the NASDAQ Composite Index advanced +3.32% (+12.52% YTD). Bonds also rose, as the Barclays Aggregate Bond Index advanced +0.73% (+1.33% YTD).
Managers have been maintaining a conservative investment strategy, which has caused them to lag in the recent market rally. In May, funds also benefited from long positions in energy and commodity-related positions, which performed strongly.
“With hedge funds up +5.68%, May was the best month for hedge funds since February 2000, when the index was up +6.83,” said Lee Hennessee , Managing Principal of Hennessee Group . “Gains were largely driven by arbitrage strategies. However, long/short equity managers, with reduced levels of exposure, also performed well, participating significantly in the market rally while maintaining hedges. With a market correction in the short term being a possibility, we feel that most hedge funds are positioned conservatively and will be able to quickly alter exposures to protect capital if the market experiences a correction.”
“May had the biggest one month run up in commodities in 35 years,” commented Charles Gradante. “It appears to us, from Hennessee Group research and manager conversations, to be speculative and led by commodity ETF demand, which exceeds "real" demand. Furthermore, margin requirements favor the speculators. Hedge funds are betting commodities will continue to rise with many long agriculture commodities, such as sugar and corn.”
Editing by Alex Akesson
For HedgeCo.Net Email: alex@hedgeco.net
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Charlotte Business Journal – In early 2008, Jim Morgan and his partners at Covenant Capital sent a gloomy letter to their investors.
After a couple of disappointing years, the letter said, the hedge-fund firm was preparing to close. It told investors how they could retrieve their funds.
While a handful of investors took their money, a number asked Morgan, now chief executive of Krispy Kreme Doughnuts Inc., and his team to continue.
They did. And Covenant went on to have one of its best years in 2008, even as the market was collapsing.
Covenant’s fund finished 2008 up 12%, while the S&P 500 ended the year down 38% and the Dow Jones Industrial Average dropped 34%.
With less than $10 million in assets, the firm is now reopening the fund to new investors as well as accepting additional capital from existing investors.
New York (HedgeCo.Net ) – After a disappointing 2008, hedge funds seem to be on the up and up, advancing 1.10% in January according to the latest research by the New York-based Hennessee Group.
According to the research, convertible arbitrage funds are leading the pack, advancing 5.79% in January with the Arbitrage/Event Driven Index advancing 2.36% as a whole. Following suit was the long/short equity strategy, which was up .90% for the month. Experts analyzed this was due to profits made from shorting earnings, since only 55% of companies had met earnings expectations in January. In addition, the Global/Macro fund index rose .44% for the month.
Mutual funds also seem to be showing signs of revival. “We are encouraged by the $6.5 billion that poured into mutual funds during the last week of January,” said Lee Hennessee, Managing Principal of Hennessee Group. “We continue to monitor fund flows and believe that if this trend continues, it could be basing and a bullish sign for equity markets.”
Hedge funds outperformed the markets last month across the board. The S & P 500 dropped 8.57%, the NASDAQ Composite Index declined 6.38% and the Dow Jones Industrial Average dropped 8.84%.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
New York (HedgeCo.Net ) – After a disappointing 2008, hedge funds seem to be on the up and up, advancing 1.10% in January according to the latest research by the New York-based Hennessee Group.
According to the research, convertible arbitrage funds are leading the pack, advancing 5.79% in January with the Arbitrage/Event Driven Index advancing 2.36% as a whole. Following suit was the long/short equity strategy, which was up .90% for the month. Experts analyzed this was due to profits made from shorting earnings, since only 55% of companies had met earnings expectations in January. In addition, the Global/Macro fund index rose .44% for the month.
Mutual funds also seem to be showing signs of revival. “We are encouraged by the $6.5 billion that poured into mutual funds during the last week of January,” said Lee Hennessee, Managing Principal of Hennessee Group. “We continue to monitor fund flows and believe that if this trend continues, it could be basing and a bullish sign for equity markets.”
Hedge funds outperformed the markets last month across the board. The S & P 500 dropped 8.57%, the NASDAQ Composite Index declined 6.38% and the Dow Jones Industrial Average dropped 8.84%.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com
The Australian – US stocks fell as another drop in oil prices and a warning from Toyota Motor underscored the unsparing nature of the slowdown.
Toyota forecast an operating loss for the current year, the first in the car maker’s history. The Japanese giant was thought to have developed a watertight strategy that would yield profits through thick and thin, making it the subject of managerial guides like the 2004 book The Toyota Way.
But the spreading recession caught up on Toyota, too, and it blamed a slump in the global automobile market and a sharp appreciation in the Japanese yen against major currencies for a likely loss. American depositary shares of Toyota fell $US3.50, or 5.45 per cent, to $US60.88.
General Motors was by far the weakest stock on the Dow Jones Industrial Average, falling US97 cents, or 22 per cent, to 3.52. Analysts warned that the Government rescue measure may not be enough to keep the car and truck maker out of bankruptcy court.
West Palm Beach (HedgeCo.net) – Hedge fund Trian Partners said that they will buy about 49.4 million shares of fast-food operator Wendy’s/Arby’s Group for $4.15 per share, or about $205 million.
The hedge fund and their affiliates now own about 21.6% of Wendy’s/Arby’s, or 52.1 million shares, up from its previous 11.1% stake. In November, Trian Fund Management L.P., led by billionaire investor Nelson Peltz, Peter W. May and Edward P. Garden, said it would buy shares of the fast-food restaurant business for about $4.15 per share.
The deal was subject to certain conditions, including that there would not be a decline of more than 10% in the Dow Jones Industrial average or the S&P 500 index after Nov. 5. Another condition was that Wendy’s/Arby’s shares would not lose 10% of their value.
Triarc Cos. Inc., which operates Arby’s and was run by billionaire investor Nelson Peltz, bought Wendy’s in a deal that closed in September.
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USA Today – Technically, a bear market is when stocks fall 20% or more from their highs. But there’s a saying that a bear’s true signature is making a fool out of everyone. Based on that, we’re all laughingstocks, because there has been virtually no way to avoid this bear market’s claws.
Following a 445-point slide to 7552 Thursday, the Dow Jones industrial average is down more than 6,600 points from its high. The broad stock market is at it lowest level in 11½ years, with the Standard & Poor’s 500 index off 52% from its high in October 2007 and on pace for its worst year ever, S&P says. Only 13 of its 500 stocks are not down for the year, and more than 100 trade for less than $10 a share.
Wall Street Journal – Down in the morning, up in the afternoon. Or is it the other way around? The topsy-turvy stock market is tough to read.
In the last year, the Dow Jones Industrial Average has briefly been over 13,000 and below 8,000. The past month has felt like the Cyclone roller coaster on Brooklyn’s Coney Island — lots of ups and downs, the whole rickety thing feeling like it’s going to crash at any minute.
Financial-Planning.com – The fate of many a hedge fund relies on what investors decide to do with their money on Nov. 15, when it is possible an overwhelming majority could ask for their money back by the end of the year, Dow Jones reports.
If there is a rush to the exits, that could send the Dow Jones Industrial Average and equities, as well as other markets-including credit, commodities, foreign exchange and foreign stock markets-spiraling even further downward.
Hedge funds that give investors until Nov. 15 to notify them if they want their money back include Citadel Investment Group and Och-Ziff Capital Management Group. Others have deadlines of Nov. 26 or Nov. 30.
MSN MoneyCentral – Stock futures fell on Thursday, pointing to a weaker open on Wall Street, with the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes down 1.4-2.8 percent.
Highlights:
* Walt Disney reports results and could comment on whether theme park bookings for the popular holiday period are down and whether it is scaling back costs in the face of skittish media advertisers. Revenue is expected to rise about 5 percent and net profit about 11 percent.
* Initial jobless claims for last week, due at 1330 GMT, are expected to come in just a thousand above the previous week at 480,000, setting the stage for a grim October non-farm payroll report on Friday.
Reuters – In the past month, traders could have shown up on Wall Street at 3 p.m. and not have missed much.
The last hour, even the last min utes, of trading seemed to be the only ones that mattered in October. But the days of one-hour markets may be waning, at least for now.
Traders say the intensity of these extreme late-day swings — 443 points on average in the "witching hour" for the Dow Jones industrial average .DJI in October — could let up as some of the so-called forced selling abates.
"I don’t think the late-day volatility will be as evident this month," said Dave Rovelli, managing director of U.S. equity trading at Canaccord Adams in New York.
Hamilton Spectator – North American stock markets chalked up huge rallies late in the afternoon yesterday, resulting in one of the biggest one-day gains ever for the Dow Jones industrial average and a big bounce in Toronto.
Toronto’s S&P/TSX composite index rose 614.29 points or 7.2 per cent to close at 9,151.63. That mended a good chunk of the 757-point hole dug on Monday, when growing worries about the length and depth of a global recession pushed down Canada’s main index by eight per cent.
In New York, the Dow gained 889.35 points yesterday to rise almost 11 per cent to 9,065.12 — the second-biggest percentage gain on record for the world’s most-watched stock-market indicator
