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Robo-advisors moving into Bank of America Merrill Lynch
FinTech
First robots took over the world of trading, and now algorithmic eyes are focused on human financial advisors. Among the first major warehouses to submit to the trend of offering “robotic” advice options to its customers is Bank of America Merrill Lynch. Reported robo-advisors firm at Bank of America Merrill Lynch to initially tackle accounts with under $250,000 in assets
Golden Gate bets $4m on Southeast Asia with six new deals
Venture Capital
<p>Singapore-headquartered venture capital firm Golden Gate Ventures has just revealed six new additions to its portfolio worth $ 4 million. The deals are further evidence that early stage investment appetite is still strong in Southeast Asia despite fears that VCs are tightening their purse strings elsewhere in Asia. These are new the additions:</p> <p> Claim Di in Thailand<br /> GoQuo in Malaysia<br /> Stamp in Thailand<br /> Alodokter in Indonesia<br /> Ruma in Indonesia<br /> IndoTrading in Indonesia</p> <p>The news comes just two weeks after the VC made a bet on Thai online payments gateway Omise.co, its biggest Southeast Asian investment to date and its first Thailand deal in two years. Golden Gate also made recently made recent deals with Singapore’s HipVan and Indonesia’s Laku6, both e-commerce startups. Vinnie Lauria (pictured), one of the VC’s co-founders, tells NexChange there has been a pick up in interest in both Thailand and South Asia as a whole.<br /> “Southeast Asia is becoming more attractive to investors as valuations for good startups still remain quite low when compared to other parts of Asia. Thailand has definitely seen a pickup in activity because the ecosystem has reached a point where we are seeing a lot of co-working spaces and incubators being set up.”<br /> Lauria adds that Golden Gate is now a third of the way through its $50 million second fund which was announced in July – about half of the fund is reserved for new investments while the rest is earmarked for follow-on investments into Goldengate's existing portfolio companies.<br /> Photo: Randy Stewart</p>
Global earnings update: Europe and Japan coming up short
Capital Markets
<p>KEY TAKEAWAYS<br /> · European earnings have disappointed relative to expectations and may suggest tempering near-term expectations for European stocks.<br /> · While we are encouraged by Japan’s economic progress, its earnings season has also fallen short of expectations.<br /> · We recommend suitable investors focus equity allocations in the U.S., while maintaining modest developed international equity exposure.<br /> Earnings overseas have generally not kept up with the U.S. We spend a lot of time dissecting earnings season in the U.S. because we believe earnings are the single biggest driver of stock prices over the long run. But earnings are not just important for U.S. stocks, they are also important for stocks overseas. This week we provide an earnings update in Europe and Japan, where results thus far have mostly fallen short of those in the U.S. While we continue to focus our equity allocations in the U.S., we still recommend modest developed international equity exposure for suitable investors, despite third quarter 2015 earnings shortfalls overseas. Prospects for international earnings to improve over the rest of 2015 and into 2016, and for additional monetary stimulus, are supportive.</p> <p>The Source:<br /> Earnings figures may vary depending on the source (Thomson, FactSet, Bloomberg, etc.). Data providers have different methodologies for calculating earnings, and different interpretations of what constitutes operating earnings as compared with reported (GAAP) earnings. In general, we favor the Thomson data series’ long history in the U.S., but view FactSet as a reliable source of international earnings data.</p> <p>U.S. EARNINGS SEASON TRACKING ACCORDING TO PLAN<br /> We wrote about third quarter 2015 earnings season in the U.S. in our recent Weekly Market Commentary, “Corporate Beige Book,” where we compared the number of positive words relative to the number of negative words in earnings conference call transcripts to assess the mood of management teams discussing results. Despite the challenging environment, particularly for global companies impacted by the strong U.S. dollar and companies tied to commodities, moods were generally positive. That exercise also highlighted the increased attention on China.<br /> Earnings season in the U.S. is about 90% complete, ahead of Europe (51%) and Japan (73%), so we have a near final picture of where the numbers will end up. Results relative to expectations have been very good, with a 5% upside surprise thus far for S&amp;P 500 earnings; and excluding the energy sector, earnings are on track to grow at a solid 6% pace. Excluding the drag from currency due to the strong U.S. dollar, earnings would be on track for a near 9% year-over-year increase, a very respectable figure for this stage of the economic cycle. U.S. earnings are poised to accelerate during the fourth quarter of 2015 and potentially return to mid- to high-single-digit growth rates within the next several quarters.<br /> EUROPE DISAPPOINTS<br /> In Europe, where the third quarter 2015 reporting season is only about halfway complete, results thus far have been disappointing on a variety of metrics. First, based on MSCI indexes, Europe has suffered the biggest year-over-year decline in earnings and revenue compared with the U.S. and Japan [Figure 1]. The story is no different if the sharp declines in energy sector profits are excluded. Second, the earnings beat rate (percent of companies beating earnings estimates) at 50% is significantly lower than the 70%-plus rate in the U.S. (and in-line with Japan’s rate) [Figure 2]. And third, the earnings surprise, at a 5% shortfall, is far worse than the 5% upside surprise to earnings in the U.S. thus far and worse than the 2% shortfall in Japan [Figure 3]. The only metric in which Europe compares favorably to the U.S. and Japan is the revenue surprise (+2%), which is better than the U.S. result and Japan’s 1% shortfall.</p> <p>These results are discouraging for several reasons. For one, Europe has a currency advantage relative to the U.S. The drag from a str
Long term returns comparison Elliott Associates LP since 1977 till September 2015
Hedge Funds
<p>Long Term Returns Comparison Elliott Associates LP since 1977 till September 2015</p> <p>&nbsp;</p> <p>This story first appeared in ValueWalk<br /> Photo: World Economic Forum</p>
Jamie Dimon is the best big bank CEO, by shareholder returns
Capital Markets
<p>After almost a decade leading JPMorgan, Jamie Dimon has provided better shareholder returns than any of his competitors.</p> <p>Since Dimon took control at the beginning of 2006 the total shareholder return for the $2.4 trillion JPMorgan has been a total 119.5%, including dividends, reports the Motley Fool. Dimon is also the longest ranking big bank CEO. Dimon's closest competition is Wells Fargo CEO John Stumpf. Wells Fargo has had 97.3% shareholder return since Stumpf became CEO in June 2007.</p> <p>Goldman Sachs reported 47.1% shareholder return since Lloyd Blankfein became CEO in June 2006. Morgan Stanley has 40.6% return since James Gorman's appointment in January 2010. And Bank of America reported 22.1% return since Brian Moynihan became CEO in January 2010.<br /> Photo: Financial Times </p>
Daily Scan: Alibaba hits $14B record for Singles' Day; Macy's plunges 14%
Capital Markets
<p>&nbsp;</p> <p>Updated throughout the day</p> <p>November 11</p> <p>The S&amp;P 500 ended 0.3% lower, largely on weakness in the energy sector where oil futures fell 2.9% on supply fears. Macy's got slammed Wednesday, falling 14% after a big miss on revenues and a weaker outlook going forward. The bond market and banks were closed in honor of Veteran's Day.</p> <p>Here’s what else you need to know:</p> <p>U.S. arrests cousins of Venezuela president in drug bust. The pair were charged with trying to transport 800 kilograms of cocaine into the country. The U.S. has long suspected that high-ranked government officials are involved in dealing drugs. Wall Street Journal (paywall)</p> <p>Apple in talks with banks to develop P2P mobile system. Move over Venmo and Square. Apple is in talks with major banks including JPMorgan and Wells Fargo to enable iPhone users to pay their buddies through Apple Pay. Wall Street Journal (paywall)</p> <p>Alert! Alert! Alert! Facebook's new app Notify has landed and will push as many news notifications as you want from a menu of 70 publishers. It's one of the biggest real estate grabs yet for the lockscreen on your phone. And it only takes 8 seconds to open a story you want to read. Hmmm. The Verge</p> <p>Alibaba hits new record on Singles' Day event with help of Frank Underwood and James Bond. The biggest Internet commerce event in the world raked in more than $14 billion. Actor Kevin Spacey helped promote the sale in a video as President Underwood. Reuters, South China Morning Post (paywall)</p> <p>Republicans show greater unity in substance-based debate. The consensus says Florida Sen. Marco Rubio and Texas Sen. Ted Cruz shone the brightest while the erstwhile frontrunner Jeb Bush wasn't terrible. Donald Trump was polite. The candidates sparred on immigration, security, and the economy and many invoked the legacy of Ronald Reagan. Politico</p> <p>AB Inbev snaps up SABMiller for $105.5 billion. Molson Coors may pay $12 billion for the part of MillerCoors it doesn't own -- paving the way for regulatory approval of the ginormous merger.  After weeks of backs and forths between the two companies, Anheuser-Busch InBev announced on Wednesday that it had formally agreed to purchase SABMiller for a whopping £69.78 billion ($105.5 billion). Cheers, people. Fortune/Wall Street Journal (paywall)</p> <p>New York State attorney general shuts down fantasy sports sites. Eric T. Schneiderman said DraftKings and FanDuel are gambling enterprises, illegal in the Empire State. The move is a major setback for the popular websites, under scrutiny after an employee inadvertently released confidential information and subsequently won $350,000. Last month, Nevada said the pair should be considered gambling sites. New York Times (paywall)<br /> You won’t believe this:<br /> Yaaas! My bestie is always on fleek. Dictionary.com has added more than 150 new words including: Bestie, Digital Citizen, Doge, Facepalm, Feels, Fleek, IRL, Sapiosexual, and Yaaas. Look 'em up! BuzzFeed</p> <p>&nbsp;<br /> Photo: Pete Bellis</p>
Mary Jo White and SEC to look into short sellers
Capital Markets
<p>The Securities and Exchange Commission chairman spoke to Bloomberg Television on Tuesday, revealing her concerns over short sellers.</p> <p>U.S. regulators are considering a move that would mean short sellers have to emerge from behind the veil of secrecy that currently cloaks their work. White expressed her concerns about negative comments from research firms that have increasingly affected share prices of late, in an interview with Bloomberg Televison.<br /> SEC to examine short selling disclosure rules more closely<br /> “It’s a complex sort of landscape, but it is an issue that has our intense attention,” said Mary Jo White during the interview, responding to a question about the potential for new rules governing short-selling disclosures by investors.</p> <p>Although White refused to mention specific companies in her response, one example of the impact of criticism on share prices is drug-maker Mallinckrodt Plc. Shares in the company fell 17% on Monday following criticism on Twitter from Citron Research, a commentary site run by Andrew Left. Renowned short seller Left’s Citron Research also provoked a rout of Valeant Pharmaceuticals International Inc. last month.</p> <p>Under existing rules hedge funds are required to report their long positions on a regular basis, but no rules govern their short positions. In contrast funds working in Europe have had to disclose shorts of over 0.2% of a company’s market value and up to regulators since 2012. Public disclosure is required for shorts that total 0.5%.<br /> Pressure growing for new rules<br /> “Short selling has a legitimate, positive purpose in the marketplace,” White said. “That’s very different, though, than if you manipulate by short selling.”<br /> Left makes his bearish positions public on Citron, and more disclosure might not affect his work. However the use of Twitter is set to come in for more scrutiny from White, who believes that a 140-character Tweet can do the same damage as a four hour presentation.<br /> The New York Stock Exchange has also appealed to the SEC for new rules forcing investors to reveal which stocks they are short selling. A letter dated October 7 asked the SEC to “bring light to a less transparent and increasingly consequential corner of the securities market.”</p> <p>At the same time it is important to recognize that short selling is one of many ways, including derivatives, that investors can bet against a particular stock.</p> <p>This article was originally published by ValueWalk. </p> <p>&nbsp;</p>
Of rate hikes and small-cap ETFs
Asset Management
<p>For a good portion of this year, investors have been regaled with tales of alleged small-cap strength by way of the rising dollar, which implies small-cap stocks and the exchange-traded funds that hold them should be beneficiaries of rising interest rates.</p> <p>That has not been the case, however, as the iShares Russell 2000 Index (ETF) (NYSE:IWM), the largest small-cap ETF, has fallen half a percent year-to-date, while the S&amp;P 500 is higher by nearly 1 percent.</p> <p>The iShares S&amp;P SmallCap 600 Index (ETF) (NYSE: IJR) has been better with a 1.5 percent year-to-date gain, but that is far from awe-inspiring.<br /> What Would An Interest Rate Hike Mean?<br /> With the Federal Reserve seemingly on course to raise interest rates in December, investors should be pondering what the near term holds for ETFs such as IJR and IWM.</p> <p>Read more at Benzinga.<br /> Photo: Pete Markham</p>
Frank Underwood goads Chinese consumers to participate in Singles' Day ecommerce lollapalooza
Lifestyle
<p>Kevin Spacey resumes his role as Frank Underwood, the diabolical political operative in "House of Cards" to goad Chinese consumers into participating in Singles' Day, the biggest internet ecommerce event anywhere.</p>
Daily Scan: Asian shares end mixed; China industrial output slumps
Capital Markets
<p>Updated throughout the day</p> <p>November 11</p> <p>Chinese shares climbed higher Wednesday after a mixed bag of economic data spurred bets on more stimulus measures from Beijing. The Shanghai Composite ended the day up 0.27%, while the Shenzhen Composite finished the session up 1.97%. Ever the contrarians, their Hong Kong-based H-share brethren tanked 0.67%. As for the rest, here’s how they did:</p> <p> Hang Seng Index: -0.22%<br /> Nikkei 225: +0.10%<br /> Straits Times Index: -0.22%</p> <p>Things are looking a whole lot better in Europe. The U.K.’s FTSE 100 has climbed 0.54%, while the German DAX and French CAC have surged 1.05% and 0.71% respectively. Draghi’s upcoming speech and the finalized megabrewer deal have no doubt aided in their lifting.</p> <p>Here’s what else you need to know:</p> <p>AB Inbev snaps up SABMiller for $105.5 billion. After weeks of backs and forths between the two companies, Anheuser-Busch InBev announced on Wednesday that it had formally agreed to purchase SABMiller for a whopping £69.78 billion ($105.5 billion). Cheers, people. Wall Street Journal</p> <p>Chinese industrial production misses estimates. China’s highly-anticipated industrial output figure came in at 5.6% for October, slightly weaker than the expected 5.8% reading and also below September’s 5.7% growth rate. The nation’s retail sales report however was slightly better, punching at 11% year on year versus a 10.9% expected climb. Still though, this should be enough to raise more than a few eyebrows over the country’s economic outlook. ForexLive</p> <p>Yuan hits near one-month low. China’s yuan was trading at 6.3617 against the dollar earlier this morning, slumping just a whisker shy of its one-month low after the PBOC fixed its midpoint rate 6.3614. This was the seventh time a row the bank has fixed the currency at a weaker level. SCMP (paywall)</p> <p>BOJ’s Harada defends stimulus program. In his first speech since he joined the Bank of Japan, policy board member Yatuka Harada defended the bank’s massive program by saying that it has boosted company earnings and lifted job growth by tanking the yen. He did however acknowledge that there were “worrying signs” in private consumption, and he did add that should the job market worsen, “it’s necessary to offer additional monetary easing without hesitation.” Reuters</p> <p>Consumer sentiment down under hits a new high. In a surprise score, the Westpac Melbourne Institute Index of Consumer Sentiment rose from 97.8 in October to 101.7 in November, leading Westpac’s Chief Economist, Bill Evans, to say: “This is a cracking result. Apart from the brief surge we saw following last May’s Budget this is the highest print for the Index since January 2014.” Melbourne Institute (pdf)</p> <p>Minneapolis Federal Reserve Bank names new president. Neel Kashkari, the man who led the controversial TARP program at the U.S. Treasury during the financial crisis, will replace Narayana Kocherlakota as president and CEO at the end of the year. The troubled asset relief program was used as a venue to bailout banks and major financial institutions. Kashkari, who is not an economist, worked at Goldman Sachs, making him the fourth of 12 presidents to join the Federal Reserve system. He also ran for Governor of California. Wall Street Journal (paywall)</p> <p>Three charged for massive financial hack. U.S. prosecutors charged one U.S. man and two Israeli men in relation to the cyber hack of JPMorgan, Fidelity, and other financial institutions between 2012 and 2015. The federal prosecutor called it “securities fraud on cyber-steroids.” Charges include hacking and identity theft. BBC</p> <p>Japan Inc. earnings have been pretty dog-eat-dog. Amid volatile commodity prices, automobile demand, and smartphone supplies, a serious zero-sum game has emerged in corporate Japan. Mitsubishi Corp – once the top dog among the big resource trading houses – has been knocked off the top spot by Itocho, while Sony emerged as the winner in its battle against Sharp. Nikkei Asian Review</p> <p>Died: Former West German Chancello