Week of Sept 4 2015 Weekly Recap & The Week Ahead
Whenever a well-known bearish analyst is interviewed in the financial press, it usually coincides with an important near-term market bottom – Clif Droke
1. Berkshire Returns to Energy Sector with $4.5B Stake in Phillips 66 — according to an SEC filing disclosed late on Friday, Berkshire Hathaway (BRK.A, BRK.B) has taken a $4.5B stake in Phillips 66 (NYSE:PSX), as Warren Buffett takes a renewed interest in the energy industry. Berkshire now holds nearly 58M shares after purchases this week, or more than 10% of the total outstanding. The latest wager comes amid a slump in crude prices, driven by concerns that a supply glut will persist.
2. Hedge Funds Took a Beating in August — billionaires David Einhorn and Daniel Loeb saw heavy declines at their main funds during August’s dramatic market selloff, as many other hedge funds suffered significant losses. Einhorn’s Greenlight Capital (NASDAQ:GLRE) fell 5.3% in August, extending the roughly $12B firm’s loss for the year to 13.8%. Others like Pershing Square Holdings portfolio dropped 9.2%, and is now down 0.1% since January. Last year the fund gained 40%, beating the S&P’s 13.7% gain. Other hedge fund losses for August: Third Point -5.2%; Jana Partners -4.3%; Viking Global -2.1%; Andor Capital -4.5%.
3. China Targets Media In Market Rout — Beijing punished nearly 200 people for allegedly spreading Internet rumors amid its market sell-off. In a broadcast confession, a reporter for a top Chinese financial news publication said he caused stock market “panic and disorder”. The head of the hedge fund’s Chinese unit has been detained by police to help with an investigation into market volatility.
4. Chinese Markets Closed on Sept 3 & Sept 4 due to Military Parade — Chinese markets closed on Sept 3 & Sept 4 due to a giant military parade marking the 70th anniversary of the end of World War II. Presiding over the extravaganza, President Xi Jinping said China would remain committed to “the path of peaceful development” and unexpectedly pledged to slash 300K troops from the country’s 2.3M strong military. The cuts, the largest reduction since 1997, will be mostly complete by the end of 2017.
5. ECB Ready To Add Stimulus — the ECB, seeing weaker growth and inflation, left open the door to expand and extend its monthly $66.7 bil bond-buying program, which is set to end in Sept 2016. ECB President M. Draghi signaled that the central bank is prepared to act. The ECB cut its GDP growth forecast to 1.7% from 1.9% in June and its inflation forecast to 1.1% from 1.5%.
The week ahead — Economic data from Econoday.com:
Tags: Chinese Bear Market