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Daily Scan: Chinese shares trim losses; S&P 500 futures on the rise
Capital Markets
<p>Updated throughout the day</p> <p>September 2</p> <p>Good evening everyone. Despite a rough and tumble ride to the finish, there was just no way Beijing would let the stock market rain on their parade. The Shanghai Composite closed down 0.2% after falling as much as 4.7% earlier in the day while the Shenzhen Composite trimmed its 4.8% drop to finish the session down 1.98%. Hong Kong’s Hang Seng Index and Japan’s Nikkei Average meanwhile, slipped 1.18% and 0.39% respectively.</p> <p>Here’s how the major European markets are faring:</p> <p> CAC 40: -0.11%<br /> FTSE 100: -0.01%<br /> DAX: -0.09%</p> <p>With Europe retracing losses, the futures market is signaling an upbeat open for the U.S. S&amp;P 500 minis are currently trading 0.61% higher, while contracts on the Dow as well as the Nasdaq point to a 0.58% and 0.63% climb at the open respectively. The upcoming ADP employment change and QoQ labor costs could easily throw a monkey wrench to that rally though.</p> <p>Here’s what else you need to know:</p> <p>“I am not sorry,” says North Korea. The hermit state has denied  Seoul’s claims that Pyongyang’s recent expression of “regret” after a marathon negotiations amounted to an apology for a land-mine explosion that maimed two South Korean soldiers. Japan Times</p> <p>U.K. construction hits longest growth period. The U.K.’s construction sector notched up its 90th month of growth today as the Markit/CIPS UK Construction PMI came in at 57.3 for August. The reading is slightly higher than July’s 57.1 showing and, as Markit notes, is well above the 50 threshold separating contraction from expansion. Markit</p> <p>Argentina calls for the head of HSBC chief. Argentina's central bank has ordered HSBC to replace its chief executive in the country within 24 hours, accusing the bank of failing to prevent tax evasion and money laundering. The bank was accused of helping clients hide money in Swiss bank accounts. BBC</p> <p>Streaming service Netflix launches in Japan. Netflix has partnered with Japanese mobile carrier SoftBank in a joint bid to tap some 36 million households with high-speed Internet access as part of global push. Channel News Asia</p> <p>Australian GDP growth falls. A slowdown in Australia’s mining and construction sectors dragged the June quarter’s GDP growth down to 0.2%, a substantial decline compared to last year’s 2% climb. A drop in exports also played a hand in the fall, though domestic final demand as well as the nation’s financial, transport, and health industries all helped buoy GDP from sinking lower. Australian Bureau of Statistics</p> <p> Thailand arrests “main” bombing suspect. Police hunting those responsible for the shrine bombing that killed 20 people in central Bangkok two weeks ago arrested a second foreign suspect on Tuesday, Prime Minister Prayuth Chan-ocha describes the man as the main person in the bombing. South China Morning Post (paywall)</p>
Buy the Great Bambino's apartment
<p>He's the sultan of swat, the king of crash, the colossus of clout, the Great Bambino, and his apartment is for sale.</p> <p>The late Yankee great Babe Ruth's Upper West Side apartment is on the market for $1.6 million, reports DNAinfo. The 1913 built apartment on 88th Street holds two bedrooms and three bathrooms, half of the entire floor that Ruth once owned. Monthly maintenance fees run close to $3,000.</p> <p>Julia Ruth Stevens, Ruth's now 99-year-old daughter, shared memories of the many Yankees that ate dinner and were visited in the home when the Ruths lived there between 1929 and 1940.<br /> “Mom and Dad loved to entertain there," Stevens told the Post. “We had a maid and cook, and Dad would always invite Yankees who had been traded and were in town with other teams. He knew they wanted a home-cooked meal [while on the road].”<br /> Photo: Jim, the Photographer</p>
Einhorn’s Greenlight reports August, down badly
Hedge Funds
<p>David Einhorn's Greenlight Capital revealed that its fund was down 5.5 percent in August, bringing the year to date loss to 14 percent, according to its web site. Looking for the silver lining, the hedge fund, known for its activism and finding value in the stock market with strong recent years past performance, did slightly outperform the S&amp;P 500 stock index at least on a monthly basis, which was down 6.3 percent in August.</p> <p>Greenlight under-performing on a yearly basis<br /> The August losses come as other hedge fund strategies had performed to various levels. Daniel Loeb's Third Pointhedge fund was down -5.1 percent in August, but remains higher on the year by a slim 0.02 percent. Balyasny Asset Management, meanwhile, adjusted its strategy parameters to hedge what they saw as the logical potential for volatility and were said to be near flat in August and up from 3 to 7 percent on the year, according to people familiar with the matter. (Additional report to come.)<br />  According to the most recent HSBC Holdings plc (ADR) (NYSE:HSBC) (LON:HSBA) Hedge Weekly performance ranking, through August the Equity Diversified / USA hedge fund category was up 0.88 percent year to date. The Multi-Strategy / Global category was up 1 percent while the Equity Diversified Long / Short category, which includes John Burbank’s Passport Special Opportunities Fund, was up 7.51 percent. It should be noted that some of the funds in the HSBC report had not reported their August performance. The Newedge CTA index, an benchmark of the largest algorithmic traders which requires firms to report performance on a daily basis, looked to close out August near a 1 percent loss.<br /> Greenlight asks questions, but likely not the questions that matter<br /> The sharp, unhedged losses come as the fund’s founder, David Einhorn, sent out a survey to his nearly 700 investors, according to a report in the New York Times. It is unclear It is unclear what the questions were, but below are a few questions that would have been most interesting for institutional investors to answer:</p> <p> When you invest in a “hedge” fund, do you expect that the fund will consistently “beat the market” on a multi-year basis, or do you expect that the fund will provide noncorrelated returns to a certain degree, help hedge a portfolio against negative stock market events?<br /> If a hedge fund c</p>
1 million TV viewers means $1M to charity
<p>Venture capital billionaire Tim Draper really, really wants people to watch his new reality show.</p> <p>Draper is offering $1 million to charities if his "Startup U" on ABC Family gets 1 million viewers this week, reports Hollywood Reporter. The reality show follows young entrepreneurs attending Draper University in Silicon Valley. The show, which premiered August 11, only attracted 47,000 viewers to its most recent episode. The philanthropy approach is certainly different than other business reality shows like "The Apprentice" and "Shark Tank" have used. Failure could sadly mean Americans are more interested in Donald Trump yelling at people than philanthropy.</p> <p>Draper's seven week, Draper University course teaches the basics of launching a startup, and gives students the opportunity to pitch their business ideas to venture capitalists. More than 150 past students have received more than $15 million total to begin their companies.</p> <p>Draper made his billions investing in companies like Hotmail, Skype, and China's Baidu, reports Venture Beat. For his next move, Draper announced that he is investing "a few million dollars" in California VC firm Wavemaker Partners.<br /> Photo: Disney | ABC Television Group</p>
Russian ETFs best performer in a very rough and tough August; commodities outperform stocks
Capital Markets
<p>This just in from Bespoke Investment:</p> <p>Russian ETFs edged down just 0.88% in August, outperforming other emerging market ETFs by a wide margin. Australia, China, Hong Kong, India, Brazil -- those ETFs all sank more than 10%</p> <p>Surprise, surprise, surprise: Oil ($USO) gained 1.92% in August after roaring back to life the last three days of the month. The S&amp;P 500 ($SPY) sank 6.10%.</p> <p>&nbsp;</p>
Daily Scan: Global markets slide; officer killed in Chicago
Capital Markets
<p>Updated throughout the day</p> <p>September 1</p> <p>Good evening,</p> <p>China continues to roil the markets: U.S. markets closed about 3% lower all around. The Dow lost 2.8%, after falling 2% right at the open. The S&amp;P 500 fell 3% and the Nasdaq dropped 2.9%. Oil slid about 8%, but continues to float just above $45/barrel. Car sales are bit more robust than expected and are likely to maintain their 17 million annualized pace for the fourth month in a row. The manufacturing orders report was a disappointment, still expanding but less than expected at 51.1%.</p> <p>Here's what else you need to know:</p> <p>Police officer fatally shot near Chicago. The Lake County officer was killed Tuesday morning while pursuing three suspects on foot. Police are currently looking for the suspects. CNN</p> <p>Kentucky clerk continues to defy court. Rowan County Clerk Kim Davis is refusing to issue marriage licences to same-sex couples, citing "God's authority" over the U.S. Supreme Court. Two gay and two straight couples filed a federal lawsuit against Davis in July after she refused to issue any marriage licenses. Davis may face fines if held in contempt of court. Reuters</p> <p>Pope Francis wants to forgive abortions. The pope announced Tuesday that all priests can absolve Catholics of the sin of abortion during the upcoming Extraordinary Jubilee Year of Mercy. The holy year, beginning December 8, is meant to focus on spiritual renewal. Only bishops have traditionally held the authority to forgive the gravest sins, including abortion, but in the past they have sometimes shared that power with priests. The pope's announcement doesn't give a pass on abortion for Catholics, but instead offers the opportunity of forgiveness and a change of heart in the Church. TIME</p> <p>Netflix ends relationship with Epix. The streaming service decided not to renew a deal with film distributor Epix, effecting pulling top movies including Hunger Games and Transformers. Netflix says it wants to focus more on exclusive content. Hulu is snapping up the Epix films for its subscribers instead. BBC</p> <p>Calpers, Calstrs want to separate Bank of America's CEO and Chairman roles. The two giant California pensions announced Monday that they would join shareholders in opposing the bylaw change that would allow Brian Moynihan to hold both roles in the company. Calpers and Calstrs, the two largest U.S. public pensions, hold a total of 63.6 million Bank of America shares, less than 1% of the total shares outstanding. Wall Street Journal</p> <p>U.S. to sanction Chinese hackers. The White House is reportedly creating sanctions against Chinese individuals and companies as U.S. tech firms – and the government itself – worry about the growing threat of China’s cyber-espionage. Financial Times </p> <p>UN confirms Palmyra temple destruction. A satellite</p>
Now there’s a “matchmaking service” for banks and fintech start-ups
<p>So banks now have a matchmaking service where they can hook up with financial technology startups. Its called Matchi.</p> <p>The Financial Times reports that Barclays, AIB, and Standard Bank are among a group of lenders partnering with fintech companies through Matchi. </p> <p>Accountancy firm KPMG has also struck an alliance with the online platform which it will introduce to its banking clients. Matchi will then support these clients with technology integration and advise on deals.   </p> <p>By “sponsoring” the platform, banks get privileged access to innovations developed by the startups. For example, the platform recently connected an Israeli fintech firm offering customer authentication with a global bank in India.</p> <p>It is another case of banks looking to embrace fintech start-ups, and the digital services they developing, rather than competing directly with them. In other words, keeping your enemies closer. </p> <p>Hopefully, the banks are getting into fintech for the long run, and not just a meaningless one-night stand they might regret in the morning.<br /> Photo: Jamz196</p>
Secret agents, pirates and cheaters: Bitcoin’s darkside
<p>Bitcoin has always had a reputation problem. While the former currency of choice for drug-dealers and porn-peddlers on the so-called dark-net has gained some mainstream acceptance, its shadier past has come to the fore this week.</p> <p>The most recent scandal is the story of Shaun Bridge, a 33-year-old former US secret agent who has pleaded guilty to stealing of $800,000 using bitcoin. According to Reuters, Bridges was supposed to be part of the investigation that brought down Ross Ulbricht, AKA Dread Pirate Roberts, the founder of dark-net marketplace Silk Road. Instead he exploited the chance for an illicit bitcoin windfall.    </p> <p>But perhaps an even more sordid story out this week was about the affair site, Ashley Madison. According to Business Insider, recently leaked user account information from the site is being used to blackmail hapless adulterers en masse...for bitcoin. Here is the message the blackmailers sent:<br /> Unfortunately your data was leaked in the recent hacking of Ashley Madison and I now have your information. If you would like to prevent me from finding and sharing this information with your significant other send exactly 2.00000054 bitcoins (approx. value $450 USD) to the following address…<br /> Unfortunate indeed. While it may be difficult to feel sympathy for people who play away, it does highlight how criminals can easily exploit the anonymity of bitcoin - something that no doubt puts many potential bitcoin adopters and investors ill at ease.   <br /> Photo: Vincent Diamante via Flickr</p>
DoubleLine Capital unveils new commodity fund
Asset Management
<p>Commodity prices have not been kind to its proponents lately. Glencore is in doldrums, so is Noble, while over in the U.S., Cargill has been forced to shut down one its commodity funds. A group of bond guys in L.A. however, seem to think that now’s the perfect time to launch one of their own.<br /> “DoubleLine Capital, the investment firm overseen by Jeffrey Gundlach, on Monday opened a new mutual fund to give investors exposure to commodities markets and help them diversify.”<br /> That’s right, DoubleLine Capital has just unveiled the DoubleLine Strategic Commodity fund, a fund that Reuters says will seek long-term returns through a variety of long and short positions on “commodity-related investments, including through the use of derivatives and leverage.”</p> <p>The portfolio manager appears to be Jeffrey Sherman, the long-haired wizard behind some of the firm’s derivative-based and multi-asset strategies, who had this to say regarding their new launch:<br /> “A broad mix of commodities historically has shown low correlations to stocks, bonds and cash. So commodities can diversify a portfolio invested in traditional asset classes…In addition, commodities can serve as a hedge against unexpected inflation. Finally, incremental returns potentially can be obtained by exploiting the term structure of prices of individual commodities.”<br /> As previously mentioned, now seems to be an importune time to be launching such a fund – could this be DoubleLine’s way of calling the bottom? These people are far from stupid, and there's no way they’d take the time to manage something that wouldn’t earn its keep.<br /> Photo: me and the sysop</p>
SmarTone’s Kiss of death to cash payments
<p>Hong Kong mobile operator SmarTone has elbowed its way into the payments space with the launch of a new service called “Kiss.”</p> <p>The online-to-offline platform, which took two years to develop, is intended for medium-to-large-sized business, reports the South China Morning Post. </p> <p>Using Kiss, merchants will be able to connect with their customers through the Kiss Wallet platform that links digital marketing and loyalty programs with data analytics and mobile payments. The first batch of retailers have already signed up and the service will be rolled out in December. </p> <p>SmarTone is starting with Hong Kong, but the biggest opportunities lie overseas. By licensing out the technology behind the platform to third party network operators, SmarTone hopes to eventually tap other markets, the plump prize of course being Mainland Chinese networks. </p> <p>New York-based research firm eMarketer predicts mobile e-commerce sales in mainland China will make up 10.9% of all retail sales in the country next year and 55.5% all online retail shopping.</p> <p>That said, Smartone will be entering a crowded space in China where e-commerce players  like Alibaba Group and have already rolled out their own payments platforms.<br /> Photo: Walt Stoneburner</p>