Adios to the month of June, the second quarter and first half of the year, and some not-bad stretches for stock investors.
For those respective periods, the S&P 500 is up roughly 6%, 3% and 17%, with one session to go. However, this week may mark the first weekly drop in four. Optimism is also in the air ahead of Saturday’s G-20 meeting where Presidents Donald Trump and Xi Jinping are expected to hit pause on the tariff threats to let trade talks continue.
But as always, things could go pear shaped fast. Take our call of the day, from billionaire hedge-fund manager Paul Singer who warns of the “possibility of a significant market downturn.
“The global financial system is very much toward the risky end of the spectrum in terms of debt. Global debt is at an all time high, derivatives are at an all-time high, it took all of this monetary ease to get to where we are today,” Singer told a panel at the Aspen Ideas Festival on Thursday. He added that neither central bankers, policy makers or academics are in any better shape to predict the next downturn, given that they didn’t foresee the last one.
Singer, the co-founder and chief executive officer of Elliott Management Corp, said a 30% to 40% market correction is possible, though he didn’t give a time frame, according to Bloomberg.
He chided global central banks for too-soft monetary policy, saying they are backed in a corner and that last year’s market slump after a Fed hike was the first sign of a market pullback to come.
According to a 2018 ranking of hedge funds by Institutional Investor, his flagship Elliot Associates hedge fund is ranked No. 10 out of 20. It returned 0.8% last year — a bumpy one for hedge funds — while Ray Dalio’s Bridgewater came out on top with an 8% return.
The markets
Dow YMU19, +0.31% , S&P ESU19, +0.30% and Nasdaq NQU19, +0.20% futures are rising. Gold GCQ19, +0.10% is up and headed for its biggest monthly and quarterly gain since 2016. The dollar DXY, -0.09% and oil US:CLN19 US:CLN19 are down.
Europe stocks SXXP, +0.40% are modestly up, while Asian ADOW, -0.31% had a mostly weaker session.
Bitcoin BTCUSD, +9.73% is recouping some group from Thursday’s slump.
The buzz
Apple shares AAPL, -0.71% are slipping on news British design guru Jony Ive will leave, but some say the iPhone maker could benefit from a change.
JPMorgan Chase JPM, +3.02% JPM, +3.02% Wells Fargo WFC, +2.51% and Citigroup C, +2.56% shares are up after announcing buybacks and dividend hikes and passing the Fed’s stress tests — used to determine if they can withstand a financial crisis. But some had to cut planned shareholder payouts to get the Fed’s OK over those distributions.
Nike NKE, -0.17% shares down after the sports retailer missed earnings forecasts.
Luxury secondhand retailer The RealReal REAL, +0.00% makes its Nasdaq debut later, while VW’s truck unit, Traton 8TRA, +0.00% fell on day 1 of trading in Frankfurt.
U.K.’s Merlin Entertainments MERL, +13.70% owner of Madame Tussaud’s Wax Museum, soaring on $6 billion buyout bid by Lego’s owners, private equity group Blackstone and a Canadian pension fund. On Monday sister publication Barron’s had said the shares looked cheap.
The chart
Bank of Merrill Lynch’s Bull & Bear Indicator returns as chart of the day. The bank’s key contrarian indicator charts whether investors are too bearish or bullish on stock buys, on a scale of zero to 10. It just slipped to 2.2 from 2.3, where it sat for two weeks.
While that’s still considered “neutral” territory, the bank said they’ve never seen investor positioning so negative when equity and credit returns are so strong.
The economy
Personal income and spending data are due early, followed by the Chicago purchasing managers index and updated consumer sentiment data.
The quote
That’s some of the reaction to Democratic presidential candidate Kamala Harris who appeared to dominate at a two-day Miami debate with 10 other hopefuls including front-runner Joe Biden.
Random reads
Trump tells Russian President Vladimir Putin not to meddle in U.S. elections
The so-called G-20 family photo is drawing lots of attention
France may hit its highest-ever recorded temp Friday amid a brutal Europe heat wave.
Underfed, flu-stricken kids. More accounts of a Texas Border Patrol facility
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