Current Trading Views
The following trading ideas from the Global Markets Group reflect shorter-term views, which may differ from the longer-term ‘structural’ positions included in our ‘Top Trades’ list further below.
1. Stay short $/CNY via 1-yr NDFs, opened at 6.7550 on 10 June 2010, and a trailing stop of 6.70 for the $/CNY spot rate, now at 6.4991.
2. Stay long EUR/TRY, opened at 2.1620 on 9 February 2011, with a target of 2.35 and a stop on a close below 2.09, now at 2.2528.
3. Stay long EUR/$, opened at 1.4085 on 18 March 2011, with a target of 1.50 and a stop on a close below 1.35, now at 1.4077.
4. Stay short $/MYR via 1-yr NDFs, opened at 3.066 on 31 March 2011, with a target of 2.90 (spot) and a stop on a close above 3.08 (spot).
5. Stay short $/PHP via 1-yr NDFs, opened at 43.11 on April 7 2011, with a target of 41.50 and a stop on a close above 44.50, now at 43.501.
1. Pay 5-yr Swiss swap rates vs Euroland, opened at -137bp on 4 March 2011, for a target of -100bp and a stop on a close below -152bp, now at -133.5bp.
2. Pay 5-yr Korean swaps, opened at 4.04% on 21 March 2011, for a target of 4.40% and a stop on a close below 3.80%, now at 3.94%.
1. Stay short UK consumer growth (GSTWUKCG), opened at 88.8 on 4 May 2011, for a target of 84 and a stop on a close above 90.5, now at 86.9.
6. Recommended Top Trades for 2011 (opened on 01 December 2010 unless otherwise stated)
1. Stay short $/CNY via 2-yr NDFs, opened at 6.3677, for a target of 5.90, now at 6.3206.
2. Close long large cap US commercial banks (BKX), for a potential profit of 13%.
3. Close long high yield spreads (CDX HY), opened at 533.34, after reaching its target on 4 February 2011 with a potential profit of 5.2%.
4. Stay long Nikkei 225 (NKY), opened at 9988.05, with a target of 12000, now at 9477.17.
5. Close long a basket of Crude, Copper, Cotton/Soybeans and Platinum (‘CCCP’), for a potential profit of 25%.
6. Stay long 5-yr JPY Inflation Swaps, opened at -13bp on 16 February 2011, with a target of 40bp, now at 0bp.
7. Stay long EM equities via EEM, opened at 48.51 on 30 March 2011, with a target of 55, now at 46.09.
8. Go short $/NOK, opened at 5.60 on May 23 2011, with a target of 5.00, now at 5.586.
I’ll be commenting on the markets and the US State visit tonight 1900 UK time on NBC (US audiances only).
Paulson & Co., the hedge fund founded by John Paulson, took a new stake in Hewlett Packard
Co. valued at about $1 billion and bought shares in Lubrizol Corp.
Paulson bought 25 million shares in Hewlett-Packard and acquired 6 million shares in Lubrizol valued at about $804 million. The fund added shares of Transocean Ltd. and kept its stake in SPDR Gold Shares
Steven A. Cohen’s SAC
Capital Advisors LP boosted
stakes in Newmont Mining
Corp., CenturyLink Inc. and
Third Point LLC, run by Daniel Loeb, increased its stakes in energy companies by 18 percent
in the first quarter.
The New York-based fund purchased 11 million shares of Houston-based El Paso Corp.,
valued at $198 million. El Paso, which provides natural gas and related energy products, is the
firm’s biggest U.S.-listed holding.
Third Point also bought 2.5 million shares in San Antonio-based Tesoro Corp., valued at $67.1
million. Tesoro is the largest independent refiner on the U.S. West Coast.
Harbinger Holdings LLC, the hedge fund run by Philip Falcone, bought shares of food company
Bunge Ltd. in the first quarter and sold shares of SPDR Gold Trust.
George Soros sold most of his holdings in the bullion-backed SPDR Gold Trust and iShares
Gold Trust funds in the first quarter and bought shares of mining companies Goldcorp Inc. and
Freeport-McMoRan Copper & Gold Inc.
Eric Mindich’s Eton Park Capital Management LP reduced its stake in the SPDR Gold Trust,
an exchange-traded fund, by 48 percent.
David Einhorn’s Greenlight
Capital Inc. said it bought new
stakes in Best Buy Co., CVS
Caremark Corp. and General
Motors Co., while selling healthcare
and financial stocks.
The New York-based hedge
fund also built new positions in
HCA Holdings Inc., Seagate
Technology Plc and Amdocs
Ltd. A purchase of Yahoo! Inc.
shares was already announced
Moore Capital Management LLC, the $15 billion hedge fund run by Louis Moore Bacon,
bought stakes in energy companies including Marathon Oil Corp., EOG Resources Inc.
and Massey Energy Co.
The hedge fund also boosted its stake in Xcel Energy Inc.,
Trian Fund Management LP, the hedge fund run by billionaire Nelson Peltz, disclosed
that it has acquired a 9.7 percent stake in Domino’s Pizza Inc.
Tudor Investment Corp., the hedge fund founded by Paul
Tudor Jones, added 360 new stocks to its portfolio and sold off
282 holdings in the first quarter. The fund acquired $100 million
worth of Consumer Staples Select Sector SPDR, making the
ETF its largest holding as of March 31 at nearly 11 percent of the
portfolio. Tudor closed positions in the S&P 500 ETF, Citigroup
Inc. and AT&T Inc., to name the largest three by market cap. It
also increased its exposure to China, through the iShares FTSE
China 25 Index Fund, and to broader emerging markets, through
the iShares MSCI Emerging Markets Index.
Tudor increased its holdings of
Google Inc., Microsoft Corp., Dell
Inc. and Activision Blizzard Inc.
to boost the information technology
portion of its portfolio. The growth
of its energy book came in large
part by increasing stakes of Noble
Energy Inc., Exxon Mobil Corp.
and Devon Energy Co. Sell-offs of
Barrick Gold Corp., Noranda Aluminum
Holding Corp. and Airgas
Inc. helped drive the decrease in
materials holdings. The fund also
lowered its exposure to WD-40 Co.,
SuperValu Inc., Avon Products
Inc. and Tyson Foods Inc., which
contributed to the decrease in consumer
Steven A. Cohen, the billionaire founder of hedge fund SAC Capital Advisors LP, said last week’s selloff in commodity markets makes this a good time to buy stock in energy companies.Energy is “an interesting sector,” he said, speaking to a packed room with 1,750 seating capacity. “I think that energy stocks are discounting oil prices much lower than where we are trading today.”Cohen, who handles about 10 percent of the roughly $35 billion the Stamford, Connecticut-based firm trades, including leverage that magnifies SACSACSAC Capital’s $13 billion in assets under management, said he has started doing more macro trading in his portfolio, known as the “Cohen Account.” The macro strategy accounts for about 20 percent of the money he manages, he said.
Jamie Dinan, founder of $17 billion hedge fund York Capital Management LP, said he is bearish on financials. “The amount of capital banks will be required to hold, in addition to changing so many of their money making activities,” including spinning out their proprietary trading desks, will have a negative impact, he said. “ROROE is going down and there is nothing they can do.”
One theory: Sprott according to Bloomberg Brief said the “ultimate event” is that savers will take their money out of banks and
invest in precious metals such as gold, which he says is now the world’s reserve currency.
Sprott, who earlier this month predicted gold may climb to $2,000 an ounce before year’s end, said he started buying the metal in 2000.
“If you’re in Ireland today, you don’t have any money in banks, particularly if you’re
non-Irish,” he said. “If you’re in Greece you’re taking your money out. In Portugal you probably have concerns. If you have a fear of the banking system, you go to things like #gold.”