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Daily Scan: Stocks fall at end of day; Wikileaks releases CIA director's emails
Capital Markets
<p>Updated throughout the day</p> <p>October 21</p> <p>Good evening. U.S. stocks dipped at the end of Wednesday after holding steady most of the day. The Dow ended with a 0.3% loss, the S&amp;P 500 fell 0.6%, and the Nasdaq dropped 0.8%. The health care sector took a hit after Valeant Pharmaceuticals was called a "pharmaceutical Enron" by Citron Research. General Motors reported $1.4 billion in profits for the third quarter, surpassing expectations. But, the car manufacturer did report a heavy $575 million charge last quarter as part of its $900 million settlement over criminal charges about its defective ignition switches. Boeing reported earnings of $1.7 billion last quarter, a 25% increase from the same time last year.  The Mortgage Banks Association application index is up 9% year-over-year -- but it's been volatile of late due to regulatory changes. Housing has been a bright spot this year -- though the refinancing boom appears to be over. All this comes in time for "Back to the Future Day" Wednesday, or the day that Marty McFly travels to in "Back to the Future Part II." When Marty travels to October 21, 2015 from 1985, he sees a number of technological advances including big screen TV and video chats. Seems like we're right on track.</p> <p>Here’s what else you need to know:</p> <p>WikiLeaks releases CIA director's emails. John Brennan's personal email account was reportedly hacked this week by a high school student. The Daily Beast</p> <p>Chinese diplomats shot in Philippines. Two Chinese diplomats were killed and a third wounded in a restaurant in Cebu. A woman who works at the consulate and her husband have been arrested. BBC</p> <p>Joe Biden will not run for president. Biden announced in the White House rose garden that it is too late for him to mount a successful campaign for the Democratic nomination. While Biden won't be a candidate, he said that he will be very vocal throughout the election, and that the next president needs to continue President Obama's work. Biden spoke about the need for more affordable college educations, relief for the middle class, and an end to bipartisan politics. The vice president says that he will focus heavily on cure for cancer as he wraps up his time in office. Biden's son Beau died of brain cancer in May.</p> <p>Speaker election date set. Current Speaker John Boehner announced that the internal Republican election for speaker will take place Oct. 28, and the floor election will be October 29. After chatting with the GOP Tuesday, Wisconsin representative Paul Ryan may be the front runner. Politico</p> <p>Pearson stock drops. The former owner of the Financial Times saw its stock fall 18% Wednesday after it announced that its earnings would be worse that expected. The company blames lower U.S. college enrollment on the slump. Reuters</p> <p>Syria's President Assad makes surprise trip to Moscow. This marks Asad's first known trip outside Syria since the uprising began in 2011. Assad went to visit President Putin secretly Tuesday evening to say thank you for Russia's support in battling rebel forces; the Kremlin released photos on Wednesday. Middle East watchers suggest that Moscow has now supplanted Iran as Syria's No. 1 ally. </p>
Wells Fargo benefits from Credit Suisse private bank closure
Capital Markets
<p>Wells Fargo struck a deal with Credit Suisse allowing Wells Fargo to recruit brokers from Credit Suisse's winding down private bank business, transitioning between the firms by early next year, reports The Wall Street Journal.</p> <p>Will the brokers take the bait? And if they do, what does this mean for the shrinking wealth management industry?<br /> Flickr: Prayitno / Thank you for (7 millions +) views</p>
Goldman dumps Indian asset management unit
Asset Management
<p>It's a quiet breakup, but Goldman Sachs is dumping its Indian fund management unit and Reliance Capital Asset Management is picking it up.</p> <p>Goldman's $37.5 million cash deal is the sixth exit of an asset management from India since 2013, reports the International Business Times. Morgan Stanley, Deutsche Bank, PineBridge, ING, and Daiwa Capital Markets have left the Indian mutual fund sector as the cost of acquiring assets has gone up, cutting into profits.</p> <p>Goldman employees in the ETF business will be offered employment opportunities at Reliance Capital. The deal makes Reliance Capital the sole provider for the government's central public sector enterprises ETFs, reports Live Mint. Goldman's existing ETFs will be rebranded as Reliance Capital's. Goldman says it will remain invested in Indian securities through regional and global funds.</p> <p>Goldman managed about $1.1 billion in India at the end of September. Reliance Capital had about $23.5 billion in assets under management at the same time, and ranks as the third largest fund house in India. The Indian mutual fund industry is worth about $202 billion.<br /> Photo: Kirill Tropin<br /> &nbsp;</p>
GM: Flat earnings or record profits? You decide
Capital Markets
<p>If you happen to conduct a Google search for GM earnings, here's what you will come up with:</p> <p>The stock market gives the nod to record earnings and robust sales of trucks and SUVs. The stock is now up 6.18% to $35.55. GM zoomed past expectations, posting $1.50/share vs the analyst bet on $1.18. Offsetting the gains: $1.5 billion in legal and recall costs.</p> <p>Photo: jm3</p> <p>&nbsp;</p>
Snapchat execs are disappearing
Venture Capital
<p>Blink and they're gone. Snapchat's executives are disappearing like their photos, with eight upper-level execs leaving in the last year.</p> <p>It's not unusual to see leadership shuffles in startups as competition is high for talented staff, reports Business Insider. But it may be a bit concerning that Snapchat can't keep execs on board. Only one of the eight now-departed leaders lasted longer than eight months.</p> <p>Is the super-young CEO Evan Spiegel to blame, or is this just the tech world we live in?<br /> Photo: AdamPrzezdziek</p>
Gangster describes heist in court
Lifestyle, 4:01
<p>No, not Bernie Madoff. Gaspare Valenti, one of the gangsters behind the infamous 1978 Lufthansa heist, put on a theatrical performance in court Tuesday, describing the "Goodfellas" crime in detail, writes the New York Times.</p> <p>The more than $6.25 million theft went unsolved for decades. "It's amazing; a robbery that big and nothing was ever discussed about where to go afterword," Valenti said in court. "Vinny [Asaro] yelled out, 'Bring it to my cousin's house!' And that's where we went, to my house." As his wife, mother, children, and sister slept, Valenti and the crew went through the goods. "I was separating gold chains and watches, the diamonds and the emeralds and rubies, just looking in the drawers, seeing how much there was," he said.<br /> Photo: petcor80</p>
Nailed It: This leveraged ETF is on fire
Asset Management
<p>Homebuilder stocks and exchange traded funds have recently been buoyed by a spate of encouraging data. Data out Monday show the National Association of Home Builders/Wells Fargo housing market index jump three points to 64, its highest reading in a decade.</p> <p>On Tuesday, it was revealed that September housing starts surged 6.5 percent, well ahead of the 1.4 percent increase expected by economists. Predictably, those data points and other are boosting homebuilder stocks and ETFs. For example, the $2.1 billion iShares U.S. Home Construction ETF (NYSE: ITB) is up 7.7 percent this year and resides at its highest levels in over eight years.</p> <p>Gains for homebuilders and stocks would be even more impressive if not for a slump that started in August and lasted well into September, but the aforementioned data points ...</p> <p>Full story available on Benzinga.com</p> <p>Photo: istock/PhilAugustavo</p>
Hedge funds post largest asset declines since ‘08
Hedge Funds
<p>Investors may have kind been to hedge funds during the third quarter, but apparently, the market was just too much for them:<br /> “Total global hedge fund capital posted the largest decline since the Financial Crisis in the third quarter, as global financial market volatility surged on uncertainty over US interest rates, China and M&amp;A transactions. Estimated hedge fund capital declined by $95 billion across all strategy areas to end the quarter at $2.87 trillion, as new investor capital inflows only partially offset performance-based declines.”<br /> The quarterly asset decline is supposedly the first since the second quarter of 2012 and the largest since fourth quarter of 2008, according to HFR. Inflows remained strong though, with three of the four main hedge fund strategies boasting net capital inflows for the quarter. Event-driven funds for example saw $5.4 billion in inflows while relative value funds punched in $2.9 billion. Macro funds however experienced $5.1 billion in outflows, largely due to the Fed cooking the emerging markets and China's slowdown hurting commodities.<br /> Photo: Lucas Stanley</p>
Watch out Silicon Valley, Asia’s VC space has you in its sights
Venture Capital
<p>Silicon Valley may have Apple, Google, and Facebook but as far as venture capital investments are concerned, Asia’s beginning to give it a serious run for its money.<br /> “The venture capital industry in Asia has seen strong growth over the past year, and in Q3 the aggregate value of deals was comparable to the total value of deals in North America. India and China, the largest part of the Asian industry, marked 709 financings in the quarter, worth a combined $16.9bn. There were 932 venture capital deals in North America in the same period, worth an aggregate $17.5bn.”<br /> Preqin adds that total Q1 to Q3 venture capital investments in China and India have surged to $36.2 billion – an over 180% climb from 2014’s $19.9 billion total – bringing Asian VC investments just $17 billion shy of North America’s $53.5 billion for the same time period.</p> <p>Nine of the ten largest venture capital deals in the third quarter were based in Asia as well, with Didi Kuaidi’s two recent rounds bagging the top two spots.</p> <p>However, North America may still have a chance to stretch their lead. While deal numbers in the west has fallen, deal sizes continue to climb with some late stage and debt financing deals reaching “record levels.”</p> <p>Deal numbers in Asia are still climbing though, as Preqin’s Christopher Elvin notes:<br /> “The venture capital industry is developing in two different directions between emerging and mature markets. In emerging markets, particularly in Asia, rapidly developing economies like China and India are providing increasing numbers of opportunities for investors and fund managers. While average deal size is increasing slightly, the key driver of growth is the increasing number of deals.”<br /> Photo: brefoto</p>
Sweden is looking to be the world's first cashless country
FinTech
<p>As the world’s financial hubs scramble to get ahead in the fintech game, researchers think it’s Sweden that will win the crown (pun intended) of the world’s first fully cashless society.</p> <p>The nordic nation already has a reputation for being the world’s most cash free country but a recent report by Stockholm's KTH Royal Institute of Technology reckon’s the Swedes are poised to rid themselves their loose change forever.</p> <p>Niklas Arvidsson, a researcher in industrial economics and management at KTH, boasts that the rapid expanding adoption of mobile payments means that his country simply has no need for your primitive paper notes. He says:<br /> "Cash is still an important means of payment in many countries' markets, but that no longer applies here in Sweden. Our use of cash is small, and it's decreasing rapidly."<br /> The report goes on to say that  there are less than 80 billion Swedish crowns ($9.6 billion) now in circulation, down from 106 billion six years ago. What’s more, of that amount only around 40-60% is actually in regular circulation, with the being stored away or traded in an underground economy.</p> <p>However, Arvidsson stops short of giving a date for when we can expect to see the final end of the cash crown. There are still plenty of reasons why paper and coins will persist. An article by the Guardian last year, for example, cited Sweden’s technology-resistant senior citizens, and the need to cater to cash-obsessed foreigners visiting the country, as just two reasons why the 100% cashless dream maybe some way off yet.<br /> Photo: Margo Akermark</p>