Hallmark Financial (HALL) Q2 Earnings and Revenues Beat

Bloomberg
Hedge Fund Collapse in Sweden Puts Spotlight Back on Quants
(Bloomberg) -- As one of Sweden’s oldest hedge funds shuts its doors, investors are trying to sort through the wreckage to figure out what exactly went wrong.Lars Ericsson, the chairman of soon-to-be defunct Informed Portfolio Management, says it’s clear now that the quantitative strategies his fund used failed to cope with the market moves brought on by the pandemic. But he rejects the idea that quants have had their day. “There is definitely a future for quantitative hedge funds,” he said on Thursday.IPM, a systematic macro fund based in Stockholm, started bleeding client money more than a year ago, with about $4 billion in assets under management flowing out since late 2019.Ericsson says the fund’s medium-term models failed to handle the shock that hit markets in early 2020.“When the pandemic came, it was a total surprise for the models,” he said.IPM then managed to come back from the brink, but bad trades that predated the pandemic came back to haunt the fund. Its relative equity models had been weighing on performance for years, due in part to a strategy relying on value stocks. This year, IPM’s models misjudged the relative gains in interest rates.Ericsson says he still thinks everything would have worked out had IPM had a little longer. As recently as half a year ago, it even hired some people from Goldman Sachs to help build out its business. But client withdrawals were too intense, and the fund had to give up.“We were about to add some short-term factors, which would have been good diversifiers,” he said. “But unfortunately, we won’t get that chance now.”Industry in Decline?IPM joins a growing list of hedge funds shutting down in recent years as investors rethink their allocations to the industry. More hedge funds have closed than started in the last six years, with 770 of them shuttering in 2020, according to data compiled by Hedge Fund Research Inc.Last year was particularly tough for computer-driven quant funds, including behemoths such as Renaissance Technologies, Winton and Two Sigma.IPM’s systematic macro strategy applied fundamental macroeconomic principles to rank asset classes and economies. It then allocated money across asset classes including sovereign debt, equity indexes, commodities and currencies across the world. The model was based on historical statistical data, and relied heavily on computers.Jonas Thulin, who oversees $6 billion as head of asset management at Erik Penser Bank AB in Sweden, says Ericsson is right to defend quant strategies, despite IPM’s demise. However, Thulin, who’s been able to increase assets under management roughly fourfold since 2018 using macro strategies, says quant models become dangerous when applied too narrowly.The Killers“The usual killers of quant strategies are so-called paradigm shifts and shocks,” he said.Thulin says the way around this is a methodology he calls “dynamic macro.” The idea is that asset managers “constantly run parallel universes of historical relationships and explanatory variables and structures.” Part of the idea is also that the model isn’t used to predict the future, “but rather, the market’s perception of the future,” which requires a human sanity check.That approach helped Thulin deliver a 26% return over the past year on his firm’s multi-asset portfolio, compared with the 5-7% annual return it targets. The global stocks portfolio he oversees is up 39% over the period.Ericsson notes that the long-term trend suggests that the share of total assets being managed under quantitative strategies is increasing, “even though there may be a temporary setback now.”But for IPM, “assets under management decreased faster than we had expected and with that asset base it is difficult to maintain the quality we want.”(Adds comment in 8th paragraph, more details of strategy in 11th)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
3h ago
Reuters
World stocks steady, Bitcoin slides on U.S. tax hike prospect
LONDON (Reuters) -Global shares steadied on Friday around 1% below record highs reached earlier this week, though Bitcoin hit its lowest in nearly seven weeks as investors assessed the impact of a possible U.S. capital gains tax hike. President Joe Biden will roll out a plan to raise taxes on the wealthiest Americans, including the largest-ever increase in levies on investment gains, to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers, sources familiar with the proposal said. Biden's administration is seeking an increase in the capital gains tax to near 40% for wealthy individuals, almost double the current rate, the sources said.
7h ago
CoinDesk
Turkish Crypto Exchange Goes Offline, CEO Missing
The report by government-controlled Anadolu Agency comes a week after the country’s central bank announced it was banning the use of crypto for payments.
21h ago
Reuters
Stellantis scraps digital speedometers for Peugeot car in chips shortage
Carmaker Stellantis said on Wednesday it would replace digital speedometers with more old-fashioned analogue ones in one of its Peugeot models, in a fallout from a global shortage of semiconductor chips that is roiling the auto industry. The change will only affect Peugeot 308 cars, among group brands that include Chrysler, Citroen and Jeep since France's PSA Group merged with Italian-American company Fiat-Chrysler this year to form Stellantis. "It's a nifty and agile way of getting around a real hurdle for car production, until the 'chips' crisis ends," a spokesman for Stellantis told Reuters.
2d ago
Bloomberg
Goldman Says Get Ready for Higher Real Yields, Bond Volatility
(Bloomberg) -- Get ready for a fresh volatility-threatening selloff in a corner of the Treasury market that holds big sway over global risk assets.Goldman Sachs Group Inc. is projecting the U.S. economic revival will send longer-dated real yields in the world’s biggest bond market higher by some 40 basis points back toward the pre-Covid business cycle.“The key driver of longer-dated rates volatility from here might be real yields,” said Christian Mueller-Glissmann, the bank’s managing director of portfolio strategy and asset allocation. “They are too low to reflect the fundamental picture. We are entering the incredible strong second quarter where we expect year-on-year global growth to be among the strongest on record.”Before this month’s head-scratching reversal, a bearish repricing across the Treasury curve this year has been taking Wall Street by storm. The thinking goes that the market risks being caught off-guard if rates adjusted for inflation stage a spirited recovery.All that has the potential to undercut expensive stock and credit valuations while intensifying the competition for capital -- even if monetary conditions remain historically accommodative.Read more: Real Yields’ Rise Is Canary in the Coal Mine for Risk AssetsAs the pandemic fallout spurs the Federal Reserve to double down on stimulus, 10-year Treasury Inflation-Protected Securities remain deep in negative territory at around minus 0.79%. These levels -- far below the long-term average -- may well be justified given still-contained core inflation but they look jarring given the U.S. economy is expected to grow by 6.3% this year.After turning positive in February, market expectations for five-year real yields in five years time are currently at 0.31%, around 35 basis points below the decade average, according to data compiled by Bloomberg.“Real yields are still 40 to 50 basis points below the average in the five years before the Covid-19 crisis, when investors were generally quite bearish on long-term growth prospects,” said Mueller-Glissmann. “This repricing does not all have to happen near-term, it might happen over several quarters.”Volatility in the rates market therefore has room to run “and it could drive at least temporary indigestion for other assets,” he added. At the same time, investors are entering a world of economic uncertainty, with the health of the business cycle and the central bank’s reaction function going forward big unknowns. How fast will the labor market roar back? What will the structural impact of the pandemic be on inflation dynamics? On those questions and more, there’s a division in market views on Wall Street, with year-end yield forecasts for 10-year Treasuries ranging between 1% and 2.5%.To hedge portfolios, the Goldman strategist is telling clients to trade options on interest rates that position for higher yields, known as payer swaptions, or by going long Treasury volatility.“The market has built up decent amount growth, inflation, and Fed rate hike expectations,” he said. “If all of those expectations unravel, volatility could be more elevated. Yields at current levels can generate more potential for rate volatility in both directions than when they were near zero.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
19h ago
FX Empire
Oil Price Fundamental Daily Forecast – Global Demand Worries, Surprise Rise in US Crude Stocks Weigh on Prices
Crude oil started the day weaker on concerns surging COVID-19 cases in India will drive down fuel demand in the world’s third-biggest oil importer.
2d ago
Bloomberg
Bitcoin Drops Below $50,000 Amid Tax and Momentum Concerns
(Bloomberg) -- Bitcoin headed for its worst week in more than a year as a proposed capital-gains tax increase for wealthy Americans intensified the volatility whiplashing the world’s largest cryptocurrency.A fresh bout of selling on Friday drove Bitcoin down as much as 7.9% to about $47,525 as it continued to take out key technical levels. Wall Street analysts warn of further losses for the notoriously volatile currency that hit a record high of $64,870 on April 14 ahead of Coinbase Global Inc.’s listing, before succumbing to an unexplained weekend swoon.This week’s 22% rout marks the worst period for Bitcoin since March 2020. Even digital currencies that have managed to eke out gains over the past few days, like Ether and the satirical Dogecoin, tumbled on Friday as the crypto space turned into a sea of red.“Bitcoin has slipped below the 50-day moving average support that it held sacrosanct through this rally,” said Pankaj Balani, CEO of Delta Exchange. “It looks like there is more downside here.”Read more: Wall Street Starts to See Weakness Emerge in Bitcoin ChartsThe latest threat comes from a Bloomberg News report Thursday that the Biden administration is considering raising the tax on capital gains to 39.6% for those earning more than $1 million a year. That was enough to ignite the biggest slide in U.S. stocks in five weeks. U.S. investors in Bitcoin, which has advanced more than 70% this year despite its recent pullback, already face a capital gains tax if they sell the cryptocurrency after holding it for more than a year.But the coin’s been one of the best-performing assets in recent years -- anyone who bought a year ago is sitting on a nearly 550% gain. For investors who bought in April 2019, it’s roughly 800%.“One of the biggest things you have to worry about is that the things with the biggest gains are going to be most susceptible to selling,” said Matt Maley, chief market strategist for Miller Tabak + Co. “It doesn’t mean people will dump wholesale, dump 100% of their positions, but you have some people who have huge money in this and, therefore, a big jump in the capital gains tax, they’ll be leaving a lot of money on the table.”The IRS has stepped up enforcement of tax collection on crypto sales. The agency -- which began asking crypto users to disclose transactions on their 2019 individual tax returns -- asks taxpayers whether they “received, sold, sent, exchanged or otherwise acquired any financial interest in any digital currency.”Still, investors may need to buckle up for more volatility in the near-term.“People have been talking about the capital gains tax and U.S. stock-market selloff being the catalyst of this,” said Todd Morakis, co-founder of digital-finance product and service provider JST Capital. “If it is true we’ve moved too much -- but once Bitcoin gets a head of steam it is tough to stop unless you are at a technical area.(Updates throughout)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1h ago
Reuters
Exclusive: Baidu's auto venture to invest $7.7 billion into smart cars over next five years - CEO
Jidu Auto, the electric vehicle venture between China's tech giant Baidu and Chinese automaker Geely, aims to pour 50 billion yuan ($7.70 billion) into making smart cars over the next five years, Jidu's chief executive told Reuters on Friday. Xia Yiping said Jidu would aim to launch its first electric vehicle (EV) in three years, as is standard for the industry, but would make efforts to speed up that process. Its first model would look like a "robot" and would target young customers, Xia said, adding that Jidu would analyse big market data before deciding on a final model.
3h ago
Reuters
Cathie Wood's ARK Invest piles into UiPath, trims Tesla
UiPath's shares surged 23.2% in their New York Stock Exchange debut, underscoring investors' appetite for high-growth tech stocks. ARK Invest's data showed the firm's exchange traded funds bought a total of about 2.7 million shares, about a third of the day's traded volume. The ARK Next Generation Internet ETF and the ARK Innovation ETF also bought a total of 247,717 shares of crypto exchange Coinbase Global Inc, which went public last week.
23h ago
Reuters
Biden to float historic tax increase on investment gains for the rich
President Joe Biden will roll out a plan to raise taxes on the wealthiest Americans, including the largest-ever increase in levies on investment gains, to fund about $1 trillion in childcare, universal pre-kindergarten education and paid leave for workers, sources familiar with the proposal said. The plan is part of the White House's push for a sweeping overhaul of the U.S. tax system to make rich people and big companies pay more and help foot the bill for Biden's ambitious economic agenda. The proposal calls for increasing the top marginal income tax rate to 39.6% from 37%, the sources said this week.
8h ago
Bloomberg
Crypto Mogul Adds Bitcoin, Ether Fund Listings to His Empire
(Bloomberg) -- Huobi Technology Holdings Ltd. has launched four cryptocurrency-related funds targeting $100 million in total assets by September, the latest attempt to ride a stunning rally in digital assets.Huobi Tech is rolling out four funds including ones that will virtually track Bitcoin and Ether prices, allowing investors to bet on the coins without actually holding any currency. It’s the latest so-called crypto tracker after similar funds have launched around the world. The firm already has secured $50 million in commitments across the four funds.The offerings also include an active fund investing in a basket of virtual assets, and a private equity fund dedicated to investment in the crypto mining sector. In March, Huobi Tech obtained a license from the Securities and Futures Commission of Hong Kong to manage and distribute funds invested solely in crypto -- the first such approval after Arrano Capital.“Virtual assets have become established as a strong category in alternative investment, and more players will compete in this arena,” Huobi Tech finance chief Zhang Li said during a Zoom interview from Beijing. “For professional investors who still have concerns about things like security and tax filing, they will opt to buy our funds rather than holding coins themselves.”The new Hong Kong license and funds highlight 38-year-old Huobi founder Leon Li’s endeavor to ensure his crypto empire, whose main exchange unit has drawn scrutiny over the years from Beijing, complies with regulations as it expands into adjacent arenas.The move also come as mainstream financial companies embrace crypto after Bitcoin’s value took off in October. However, some still warn of a bubble, and volatility and regulatory risk around the globe remain concerns for the asset class.Longer term, Zhang said she expects the firm to provide a full suite of crypto-related services including custody, without specifying details.Read more: The Crypto Mogul Who’s Got the Ear of China’s Central BankFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1d ago
Reuters
US STOCKS-U.S. stocks close down on news of Biden tax proposal
U.S. stocks dived on Thursday on reports President Joe Biden planned to almost double the capital gains tax, news analysts said provided an excuse to take profits in a directionless market ahead of big tech's earnings next week. The three main indexes on Wall Street also fell on reports that Biden planned to raise income taxes on the wealthy, a proposal some said would be hard to pass in Congress. "If it had a chance of passing, we'd be down 2,000 points," said Thomas Hayes, chairman and managing member at hedge fund Great Hill Capital LLC.
13h ago
Reuters
Oil steadies on hopes for demand recovery, India's virus surge caps gains
Oil prices climbed on Friday, buoyed by hopes demand will recover as economic growth picks up and lockdowns ease, but worries about India's surging second wave of COVID-19 cases limited gains. U.S. West Texas Intermediate (WTI) crude futures jumped 45 cents, or 0.7%, to $61.88 a barrel, also after an 8 cent rise on Thursday. "Oil prices rebounded for a second day as a lower-than-expected U.S. jobless claims data buoyed the energy demand outlook in North America," said Margaret Yang, a strategist at Singapore-based DailyFX.
1d ago
Bloomberg
SEC to Examine Fund Disclosure Rules After Archegos Blowup
(Bloomberg) -- U.S. regulators are considering tougher disclosure requirements for investment firms in response to this year’s implosion of Archegos Capital Management and trading gyrations in GameStop Corp.Securities and Exchange Commission officials are exploring how to increase transparency for the types of derivative bets that sank Archegos, the family office of billionaire trader Bill Hwang, according to people familiar with the matter. The regulator also faces pressure from Capitol Hill to shed more light on who’s shorting public companies after the GameStop frenzy.The review is in its early stages and Gary Gensler, who took over as SEC chairman last week, will decide how to proceed, the people said. A spokesman for Gensler declined to comment.The SEC is focusing on public documents known as forms 13F and 13D that reveal big stock holdings of hedge funds, mutual funds and family offices. Investment firms that own shares worth at least $100 million must file a 13F detailing their portfolios every quarter, while funds issue a 13D once their stake in a single corporation exceeds 5% -- alerting other investors that they may be pursuing a hostile takeover or the breakup of the company.Archegos, which doesn’t appear to have ever filed a 13F or a 13D, used swaps rather than common stock to stealthily amass huge positions, including an estimated $10 billion wager on ViacomCBS Inc. Like derivatives, short-sales are also largely excluded from the forms, an issue that became a flashpoint this year when lawmakers questioned how hedge funds made bearish bets that were seemingly bigger than GameStop’s market value without anyone knowing who was behind the trades.Read More: Archegos Exposes SEC Blind Spots, Dithering on Market OversightAmong issues the SEC is evaluating are whether filings should include derivatives and short positions, and if firms should submit 13Fs more frequently than every three months, said the people, who asked not to be identified in discussing internal conversations. An overhaul might help regulators and Wall Street spot risks that are building up in the financial system. The billions of dollars in losses that Archegos triggered for Credit Suisse Group AG and other firms show the consequences of having such blind spots.“Current reporting is both too slow and it’s incomplete,” said Andrew Park, a senior policy analyst at Americans for Financial Reform, a Washington-based group that pushes for stringent financial regulations. “Few people knew about Archegos until after it had blown up.”New details on the Archegos fallout emerged Thursday with Credit Suisse saying it would slash its lending to hedge funds by a third after the blow up cost the bank $5.5 billion. The losses were among the costliest in the firm’s history and have prompted it to tap investors for $2 billion in fresh capital.If the SEC requires more transparency, it would be welcomed by business groups that have long argued that investors should be compelled to disclose bets against companies and derivatives that are directly linked to share prices.But hedge funds and activist investors would likely lobby to fend off changes. Such firms claim that having to reveal short positions would make them targets of corporate smear campaigns and deter trading that can expose badly run companies or even frauds. The industry also says more disclosure isn’t necessary because market participants already know the level of negative wagers made against specific companies even if they can’t see who’s making the trades.One thorny issue the SEC is examining is how much legal flexibility it has to revamp rules, some of the people said. Current disclosure requirements are based on equity stakes that give investors the right to vote shares in corporate elections, not complex financial instruments like derivatives or options.Democrats on the House Financial Services Committee are also evaluating whether regulations should be tightened, including by making family offices like Archegos file confidential forms to the SEC that are meant to help identify threats to market stability, a congressional aide said. Even when family offices file 13Fs, they often avoid reporting their investments publicly because the SEC permits them to submit parts of the documents covertly.Read More: How New Wealth, Few Rules Fueled Family Office BoomThere isn’t yet a push to pass legislation because lawmakers would like to give Gensler time to get up to speed in his new job, according to the aide. In addition, some congressional members believe the SEC has all the authority it needs to make changes.Any move to increase transparency would be a reversal from what was proposed during the Trump administration when the SEC sought to exempt firms from filing 13Fs unless they held stock worth at least $3.5 billion. The plan was scuttled late last year amid heavy criticism from public companies.(Updates with details on Credit Suisse losses in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
21h ago
FX Empire
E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – 13700.50 Potential Trigger Point for Steep Decline
The direction of the June E-mini NASDAQ-100 Index into the close is likely to be determined by trader reaction to 13786.00.
12h ago
FX Empire
European Equities: Prelim Private Sector PMIs for April and Corporate Earnings in Focus
It’s a busy day ahead, with economic data from the Eurozone and the U.S and corporate earnings to provide. Biden tax plans weighed on the DAX futures early on…
8h ago
Reuters
Daimler raises profit outlook, sees potential Q2 sales hit from chip shortage
LONDON (Reuters) -Mercedes-Benz car maker Daimler AG on Friday raised its profit outlook for 2021, but said the global semiconductor chip shortage may continue to impact sales in the second quarter. Daimler said it assumed there would be some recovery in chip availability in the second half of this year but there was limited visibility at present. Chief Financial Officer Harald Wilhelm said underlying car demand was strong, but the chip shortage had prevented sales from reaching full potential.
4h ago
Bloomberg
Top Forecaster Sees Aussie Rising to 85 U.S. Cents by Next Year
(Bloomberg) -- The Australian dollar may climb to 85 U.S. cents within a year as commodity prices hold firm and the greenback retreats, according to the currency’s top forecaster.The Aussie is on track to recapture the 80 cents handle in the coming months, with the dollar expected to weaken as U.S. exceptionalism fades, said Ray Attrill at National Australia Bank Ltd., the most accurate Aussie forecaster in the first quarter in Bloomberg rankings.“This is a view heavily contingent on commodity prices remaining firm, risk sentiment holding up, and a related softening in the dollar,” Attrill said.The bets on the Aussie reflect confidence that the global economy is on the mend as commodities ranging from oil to iron ore push higher on signs of a recovery in demand. But not everyone shares that optimism, with asset managers extending short positions on the currency into a fourth week as at mid-April.The Aussie traded around 77 cents on Thursday and last reached the 85 mark in December 2014.The main risk to NAB’s call is if the renewed spike in virus cases “extends to a new infection wave in Europe, which runs ahead of rising vaccination rates and necessitates fresh large-scale economic lockdowns,” Attrill said.“Unless or until this risk eventuates, we continue to view any dips in AUD/USD back to the early April lows beneath 0.76 as buying opportunities,” he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1d ago
Reuters
Taiwan's chip industry set for years of growth: minister
TAIPEI (Reuters) -Taiwan's key semiconductor industry has years of growth ahead of it with no worries about oversupply despite a massive capital investment programme and only a few competitors in the next decade or so, a senior government minister said on Friday. Kung Ming-hsin, the head of Taiwan's economic planning agency, the National Development Council, told Reuters the business opportunities presented by the global transformation to a digital economy were "very, very enormous". Kung also sits on the board of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) as a representative of the largest shareholder, the government's National Development Fund, which holds around 6% of the stock of the world's most valuable semiconductor company.
3h ago
Bloomberg
Mapletree Explores $1 Billion Student Housing REIT IPO
(Bloomberg) -- Mapletree Investments Pte, a property developer and manager, is exploring listing a student housing real estate investment trust in Singapore that could raise about $1 billion, according to people familiar with the matter.The company, which is owned by Singapore’s state investment fund Temasek Holdings Pte, is in preliminary discussions with prospective advisers on the offering plan, said the people. An initial public offering could take place as soon as next year, one of the people said, who asked not to be identified as the information is private.Any deal would add to the $5.6 billion of property trust IPOs in Singapore over the last five years, data compiled by Bloomberg show. At $1 billion, it would be the country’s biggest REIT listing since 2013 when Mapletree North Asia Commercial Trust raised $1.4 billion, the data show.Deliberations are ongoing and details of the offering including size and timeline could still change, the people said.“We are constantly reviewing options and will announce accordingly if we have firm plans,” a Mapletree spokesperson said in response to Bloomberg News query.Mapletree owns four Singapore-listed REITs and six private equity real estate funds, according to its latest annual report. It had S$60.5 billion ($46 billion) assets under management as of the end of March last year. Its portfolio spans from residential and industrial assets to data centers, retail space and lodging in 13 markets across Asia, Europe and the U.S.In 2019, Mapletree acquired two purpose-built student accommodation assets near Coventry University in the U.K. and completed its first student lodging development in the country. These moves took the company’s total purpose-built student accommodation assets to 50 with over 22,000 beds located across 33 cities in the U.K., the U.S and Canada, its annual report shows. Including projects under development, the total student accommodation assets under management amount to approximately S$3.6 billion.Mapletree is looking at listing two REITs that could be backed by overseas assets in student accommodation and logistics, with a “sweet spot” for each IPO of about S$2 billion, its Group Chief Executive Officer Hiew Yoon Khong said in an interview in 2019.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
1d ago

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