• Banks Had Unfair Advantage From Commodity Units (Bloomberg)
• Report Notes Deals Between Goldman, Deutsche and Others Drove Up Aluminum Prices (WSJ)
• Goldman, Morgan Stanley Commodity Heyday Gone as Units Faulted (BBG) - because when you can no longer manipulate, you move on...
• Lenders Shift to Help Struggling Student Borrowers (WSJ)
• Immigrants face major hurdles in signing up to new Obama plan (Reuters)
• Distressed Debt in China? Ain’t Seen Nothing Yet, Buyers Say (BBG)
• Banking culture breeds dishonesty, scientific study finds (Reuters)
• Amazon Robots Get Ready for Christmas (WSJ)
• Crimean savers ask: Where's our money? (Reuters) - What's a saver?
• Police arrest protesters as St. Louis awaits grand jury decision (Reuters)
• Teen Retailer Faces Challenge Filling Expansive Floor Space With Right Merchandise (WSJ)
• Three students shot in Florida university library, gunman killed (BBG)
• Takata, auto executives to face Senate over deadly air bag scandal (Reuters)
• Deadly western New York snowstorm to get second wind  (Reuters)

Overnight Media Digest

WSJ

* United States President Barack Obama will lay out sweeping changes to the immigration system in a speech, offering new protections to millions of people in the country illegally and sparking a bitter fight with Republicans. (http://on.wsj.com/1F3JGC2)

* Amazon.com Inc has outfitted several United States warehouses with squat, wheeled robots that move stocked shelves to workers and are expected to speed delivery, saving employees as much as 20 miles a day of walking. (http://on.wsj.com/1qYIYO6)

* Federal Reserve officials meeting last month said they felt the U.S. recovery was on strong enough footing to withstand gathering external threats to growth and stuck to their plan to gradually unwind nearly six years of easy-money policies. (http://on.wsj.com/1vqtGbw)

* A United States Senate report on commodity-market activities at big Wall Street banks accuses the firms of being so powerful they were able to influence prices, gain trading advantages and put the broader financial system at risk by entering volatile businesses such as uranium trading and coal production. (http://on.wsj.com/1uTMNsW)

* A look at the partnership of Valeant Pharmaceuticals International Inc CEO Michael Pearson and activist investor William Ackman in their failed $53 billion bid to acquire Allergan Inc shows that the two men didn't always see eye to eye. (http://on.wsj.com/1uTOC99)

* Investors are shedding holdings of Korean won, Singapore dollars and other Asian currencies, in a bet the yen's fall against the dollar will reverberate through the region's foreign-exchange markets. (http://on.wsj.com/1yUYcI2)

* Forever 21 is grappling with a special problem stemming from its aggressive expansion: gigantic stores that it has had trouble filling productively, sources said. It doesn't report sales or profits, but people who have seen the figures say sales excluding newly opened or closed stores hit a negative patch within the last 18 months. (http://on.wsj.com/1Ak64aj)

* The Coca-Cola Co is increasingly pushing smaller packages as more Americans fret about calories from sugary drinks. Coca-Cola said that sales of its namesake cola's smaller, premium-priced packages, including 7.5 ounce "mini cans" and 8 ounce glass bottles, have risen 9 percent this year through October in dollar terms in the United States. (http://on.wsj.com/1qvN05O)

* Archer Daniels Midland Co sued Syngenta AG over losses the grain trader and processor said it suffered after Syngenta sold genetically engineered corn in the United States that had yet to win approval in China. (http://on.wsj.com/1F5P6MJ)

* Yahoo Inc struck a five-year deal with Mozilla Corp to become the default search engine on its Firefox browser in the United States, ending the nonprofit's long-standing relationship with Google Inc (http://on.wsj.com/11EvAsv)

* Thousands of people struggling to pay back student debt are in line to get a break as two big lenders, Wells Fargo & Co and Discover Financial Services roll out programs to ease loan terms. (http://on.wsj.com/1qXWWzL)

FT

The amount the National Health Services spends on each patient would fall between 98 pounds ($153.5856) and 191 pounds - a real term drop in spending of at least 5.5 billion pounds - by 2020 under funding pledges of the main political parties, according to an analysis.

Energy and mining companies are failing to consider the "existential threat" from climate change and must change the way they operate, former BP PLC head Lord Browne warned.

Pub companies face a decline in investor confidence and months of uncertainty after a decision by MPs to unwind the centuries-old beer tie system hammered on their share prices.

Vodafone Group PLC may be forced to bid for TV rights to keep up with its competitors as they move to offer bundled television and broadband services, putting pressure on the telecoms company to buy exclusive content, Chief Executive Vittorio Colao warned.

NYT

* A two-year Senate-led investigation is throwing back the curtain on the outsize and sometimes hidden sway that Wall Street banks have gained over the markets for essential commodities like oil, aluminum and coal. A Senate subcommittee found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by their own traders.. (http://nyti.ms/1BOTLo3)

* During the financial crisis in 2008, the government made a supremely generous move that most likely saved Goldman Sachs from collapse. Six years later, Goldman is still reaping benefits from the special provisions that came with that act of mercy, according to the findings of a Senate report that was released on Wednesday. (http://nyti.ms/1uzPTAV)

* The new airbag propellant was supposed to be the next big thing for Takata in 1998. An engineer for the company, Paresh Khandhadia, declared it "the new technological edge" in an interview with a trade magazine then. Based on a compound called tetrazole, it was seen as a reliable and effective compound for inflating airbags. Yet despite the fanfare, by 2001 Takata had switched to an alternative formula, ammonium nitrate, and started sending the airbags to automakers, including Honda. That compound, according to experts, is highly sensitive to temperature changes and moisture, and it breaks down over time. And when it breaks down, it can combust violently, experts say. (http://nyti.ms/1xR1DAt)

* A group of community bankers raised many of the same concerns as Senators Elizabeth Warren and Richard Durbin about the naming of Antonio Weiss to a top Treasury job. One being Weiss's work on Burger King's acquisition of the Canadian coffee chain Tim Hortons Inc. (http://nyti.ms/1vrqV9R)

* After Netflix Inc delayed a stand-up special, NBC announced it was dropping plans to develop a new sitcom starring comedian Bill Cosby, the latest fallout from rape accusations. (http://nyti.ms/1uLPT2n)

Canada

THE GLOBE AND MAIL

** Calgary-based pipeline and power giant TransCanada Corp said on Wednesday that it would spend as much as $46 billion through to 2020 to connect surging supplies of shale gas and oil sands crude in Western Canada to growth markets. (http://bit.ly/1ysGiN9)

** Australia's free trade deal with China may not be good news for Canada as its companies struggle to find a foothold in the world's second largest economy. The Australian deal is now prompting calls in Canada for the Stephen Harper government to kick-start its own free trade talks with China, which stands to find cheaper alternatives to its south than from across the Pacific once the agreement is finalized. (http://bit.ly/1ysH50s)

** Bell Media Inc has cut 80 full-time positions in its latest round of layoffs, citing an "industry-wide challenging advertising market." (http://bit.ly/1vsav14)

NATIONAL POST

** Premier Kathleen Wynne's decision to reopen contracts for public school teachers last year cost Ontario taxpayers $468 million, Ontario Auditor General Bonnie Lysyk reported on Wednesday. (http://bit.ly/1xEdaW4)

** Former Conservative party campaign worker Michael Sona has been sentenced to nine months for his role in a scheme to misdirect voters to the wrong polling location in Guelph in the 2011 federal election. Judge Gary Hearn also imposed an additional 12 months of probation on Sona after his jail term is served. (http://bit.ly/1zFR2Zo)

** Toronto-based Brookfield Asset Management is abandoning its plan to buy the former Revel Casino Hotel in Atlantic City, dealing another blow to a city reeling from a string of casino closures and the disappearance of thousands of jobs. (http://bit.ly/1xRDhGz)

China

CHINA SECURITIES JOURNAL

- Companies that have listed on the over-the-counter (OTC) exchange and have met compliance requirements can be transferred to China's Nasdaq-style board known as ChiNext, said Liu Jianjun, deputy director at the supervision department of private equity in China Securities Regulatory Commission (CSRC).

- Zhuang Xinyi, vice chairman of CSRC, said at a forum meeting on Wednesday that the commission was pushing forward with reforms on the initial public offering (IPO) process which is currently based on an approval-based registration system.

SECURITIES TIMES

- Hong Kong residents' demand for offshore renminbi, also known as yuan, has risen to a two-week high due to the launch of the Shanghai-Hong Kong stock connect scheme. The rise in demand has also boosted the exchange rate for offshore yuan, the paper said.

SHANGHAI SECURITIES NEWS

- The government will push ahead with financial reforms even as the economy faces growing pressure, according to officials from the National Development and Reform Commission.

SHANGHAI DAILY

- The water in half of China's top 10 river systems is polluted and about 60 percent of the nation's underground water is of poor quality, according to China's Environmental Situation Report. About 9 percent of the water in these river systems was rated as class V, indicating severe pollution.

CHINA DAILY

- China is ready to work with other countries to deepen international cooperation, respect sovereignty on the internet and uphold cyber security, President Xi Jinping said in a congratulatory message to the first World Internet Conference.

Britain

The Times

Wait times are halved for latest NHS drugs Waiting times for cutting-edge drugs will be cut in half under government plans to rip up a "broken" system that has denied many NHS patients life-extending treatments. (thetim.es/1vqUjh1) Bankers fail scientists' honesty test Rogue traders, the Libor scandal and astronomical bonuses for the chiefs of failing banks have all hinted that banking's moral compass had gone awry. Now scientists say they have confirmed what many suspected - the industry really is more dishonest than most. (thetim.es/1Akm1gE)

The Guardian

Royal Mail says Amazon delivery service will hit its UK parcels business

Royal Mail Plc has warned that growing competition from Amazon.com Inc will hurt its UK parcels business, as it reported a 21 percent decline in first-half profits. (bit.ly/11BxKsT)

Jail the best deterrent for rogue traders, BoE deputy governor says

Nemat Shafik, one of the Bank of England's deputy governors, said the best deterrent to rogue traders in financial markets is the threat of jail. (bit.ly/11vsfLt)

The Telegraph

11 bln stg energy smart meter roll-out suffers further delay

The government's 11-billion-pound ($17-billion) plan to install "smart" energy meters in every home is being delayed by up to a year, after the company in charge of the communications system for the devices warned it would not be ready in time. (bit.ly/1thnyLS)

Thousands join Lloyds investor lawsuit over HBOS takeover

About 8,000 investors have put their name to a lawsuit claiming Lloyds Banking Group Plc misled shareholders ahead of the bank's acquisition of HBOS Plc six years ago. (bit.ly/11DLx2l)

Sky News

UK company planning to land probe on moon

British company Lunar Missions Ltd is planning to send a probe to the moon and bury a time capsule of memory discs under the surface. (bit.ly/1p1Cm5H)

Bank watchdog hands out fine to RBS The regulatory arm of the Bank of England will hand out its first fine on Thursday when it censures Royal Bank of Scotland for an IT meltdown in 2012. (bit.ly/11ukjdt)

The Independent

Londoners set to spend £1bn in run-up to Christmas

Christmas spending in London's West End is expected to break through the 1 billion pound barrier for the first time this year as confidence in the recovery gathers momentum. (ind.pn/1zEgJJG) M&S to scale back 'duplicated and overcrowded' clothing lines

Marks and Spencer Group Plc has said there will be 20 percent fewer lines than two years ago in a sign the company is beginning to regain confidence in its abilities. (ind.pn/1vqSLmx)

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Consumer Price Index for October at 8:30--consensus down 0.1%
Jobless claims for week of November 15 at 8:30--consensus 284K
Markit manufacturing PMI for November at 9:45--consensus 56.3
Leading indicators for October at 10:00--consensus up 0.5%
Existing home sales for October at 10:00--consensus down 0.4% to 5.15M rate

ANALYST RESEARCH

Upgrades

Columbia Banking (COLB) upgraded to Buy from Neutral at Sterne Agee
EOG Resources (EOG) upgraded to Overweight from Neutral at Atlantic Equities
Franklin Street (FSP) upgraded to Outperform from Neutral at RW Baird
JetBlue (JBLU) upgraded to Neutral from Underperform at Credit Suisse
Primerica (PRI) upgraded to Buy from Neutral at SunTrust
Stage Stores (SSI) upgraded to Market Perform from Underperform at Telsey Advisory
Statoil (STO) upgraded to Overweight from Neutral at HSBC
The Medicines Co. (MDCO) upgraded to Outperform from Neutral at Credit Suisse
TrueCar (TRUE) upgraded to Outperform from Sector Perform at RBC Capital
Yum! Brands (YUM) upgraded to Buy from Neutral at Janney Capital

Downgrades

Alexandria Real Estate (ARE) downgraded to Neutral from Outperform at RW Baird
Allscripts (MDRX) downgraded to Sector Perform from Outperform at RBC Capital
athenahealth (ATHN) downgraded to Underperform from Sector Perform at RBC Capital
Boston Properties (BXP) downgraded to Neutral from Outperform at RW Baird
Cliffs Natural (CLF) downgraded to Hold from Buy at Deutsche Bank
Computer Programs (CPSI) downgraded to Sector Perform from Outperform at RBC Capital
Constellium (CSTM) downgraded to Neutral from Buy at Citigroup
Cubist (CBST) downgraded to Neutral from Outperform at Credit Suisse
Denbury Resources (DNR) downgraded to Equal Weight from Overweight at Barclays
E-House (EJ) downgraded to Perform from Outperform at Oppenheimer
First Interstate (FIBK) downgraded to Neutral from Buy at Sterne Agee
Macerich (MAC) downgraded to Market Perform from Outperform at BMO Capital
Oplink Communications (OPLK) downgraded to Neutral from Buy at B. Riley
Owens-Illinois (OI) downgraded to Market Perform from Outperform at BMO Capital
Quality Systems (QSII) downgraded to Sector Perform from Outperform at RBC Capital
Santander Consumer (SC) downgraded to Underweight at Morgan Stanley
Sapient (SAPE) downgraded to Hold from Buy at Stifel
Zoetis (ZTS) downgraded to Market Perform from Outperform at William Blair

Initiations

American Express (AXP) initiated with a Market Perform at Bernstein
Apache (APA) initiated with an Outperform at Imperial Capital
BBCN Bancorp (BBCN) initiated with a Neutral at Sterne Agee
BCE (BCE) initiated with a Buy at Citigroup
Capital One (COF) initiated with an Outperform at Bernstein
Discover (DFS) initiated with a Market Perform at Bernstein
First Republic Bank (FRC) initiated with an Underperform at Sterne Agee
Hanmi Financial (HAFC) initiated with a Buy at Sterne Agee
International Paper (IP) initiated with a Market Perform at Wells Fargo
MeadWestvaco (MWV) initiated with a Market Perform at Wells Fargo
NAPCO Security (NSSC) initiated with a Neutral at B. Riley
Opus Bank (OPB) initiated with a Buy at Sterne Agee
Rogers Communications (RCI) initiated with a Neutral at Citigroup
Strategic Hotels (BEE) initiated with an Outperform at RBC Capital
Synchrony Financial (SYF) initiated with an Outperform at Bernstein
TELUS (TU) initiated with a Buy at Citigroup

COMPANY NEWS

Yahoo (YHOO) and Mozilla announced a strategic five-year partnership that makes Yahoo the default search experience for Firefox in the United States on mobile and desktop (GOOG)
Keurig Green Mountain (GMCR) said CFO Frances G. Rathke to leave in FY15
JANA Partners said it is continuing discussions with Hertz (HTZ) for board, management changes
Billboard 200 chart to include on-demand streaming in rankings (NLSN, MSFT, GOOG, AAPL, P)
RBS (RBS), NatWest, Ulster Bank fined GBP42M by FCA
CGG SA (CGG) confirmed offer from Technip (TKPPY), considered that conditions to pursue not met
Amazon.com (AMZN) to start Black Friday deals on Friday, Nov. 21
KLA-Tencor (KLAC) declared special dividend of $16.50 per share

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Kirkland's (KIRK), JinkoSolar (JKS), GasLog (GLOG), Copa Holdings (CPA), America's Car-Mart (CRMT), L Brands (LB), Fidelity & Guaranty Life (FGL), Datawatch (DWCH), Williams-Sonoma (WSM), Salesforce.com (CRM), Real Goods Solar (RGSE), Keurig Green Mountain (GMCR)

Companies that missed consensus earnings expectations include:
Donaldson (DCI), Atento  (ATTO)

Companies that matched consensus earnings expectations include:
Jumei (JMEI)

NEWSPAPERS/WEBSITES

Caesar's (CZR) to turn operating unit into REIT, Bloomberg reports
AB InBev (BUD) cutting jobs, consolidating sales division in U.S., WSJ reports
Senate panel says banks could influence commodity prices, NY Times says (GS, JPM)
Citigroup (C) risk executive Miller found dead in New York, Bloomberg reports
Goldman (GS) terminates two employees for sharing confidential information, WSJ reports
Target (TGT) looks 'poised for more gains,’ Barron's says

SYNDICATE

Autohome (ATHM) 8.5M share Secondary priced at $42.50
Continental Building (CBPX) 7M share Secondary priced at $14.75
Covenant Transportation (CVTI) 2.64M share Secondary priced at $22.00
Essent Group (ESNT) 12M share Secondary priced at $22.25
GoPro (GPRO) 10.36M share Secondary priced at $75.00
Habit Restaurants (HABT) 5M share IPO priced at $18.00
Immune Pharmaceuticals (IMNP) files automatic common stock, warrants shelf
Independence Realty Trust (IRT) files to sell 6M shares of common stock
Kindred Healthcare (KND) 5M share Secondary priced at $19.75
La Quinta (LQ) 20M share Secondary priced at $20.00
Lexicon (LXRX) files to sell $50M of common stock
Neothetics (NEOT) 4.65M share IPO priced at $14.00
ONEOK Partners (OKS) enters $650M equity distribution agreement
Walker & Dunlop (WD) files to sell 2M shares of common stock for holders

• Fed May Not Hit Neutral Until 10th Anniversary of Lehman Collapse (BBG)... make that never
• Global stocks and bonds roar Fed approval, dollar fights back (Reuters)
• EU to tell Greece time, patience running out (Reuters)
• U.S. likely to delay planned closure of two Afghanistan bases (Reuters)
• Norway Signals Reduction After Unexpectedly Holding Rate (BBG)
• Oil Falls to $55 as Kuwait Comments Refocus on Oversupply (Reuters)
• Tsipras Heads to Summit as Merkel Tries to Defuse Greek Crisis (BBG)
• Yahoo Pulls the Plug on China Operations (WSJ)
• Democratic support for Hillary Clinton softens: Reuters/Ipsos poll (Reuters)
• Apple Sachs? Other way around: Never Mind Apple, It’s the Goldman Sachs Era in Dow Industrials (BBG)
• Investors Raise Alarm Over Liquidity Shortage (WSJ)... just two years after Zero Hedge
• Falling Crime Rates Make Dangerous Neighborhoods Safe for Bidding Wars (BBG)
• U.S. rebukes Israel's victorious Netanyahu on Mideast policy (Reuters)
• Microsoft tackles China piracy with free upgrade to Windows 10 (Reuters)
• Two more U.S. healthcare workers repatriated for Ebola monitoring (Reuters)

Overnight Press Digest

WSJ

* The U.S. economy will be better positioned for the next recession if interest rates are higher when the downturn starts - yet the best way to achieve that may be to keep rates lower now. (http://on.wsj.com/1AHYfaD)

* The Federal Reserve opened a door to raising short-term rates by midyear but offered several reasons it is still in no great rush to act. It said it would move when it is reasonably confident low inflation is on track to return to its 2 percent target. (http://on.wsj.com/1BY3PcR)

* Despite changing consumer tastes, Coca-Cola CEO Muhtar Kent is pushing a strategy to sell more cola. The 62-year-old CEO says he has a number of plans such as increased marketing spending and an overhaul of the company's U.S. distribution network that will help Coke return to high-single-digit earnings growth in 2016. (http://on.wsj.com/1H3SP0R)

* Gunmen stormed a museum in Tunisia's capital on Wednesday, leaving 20 people dead, including 18 foreign tourists, after failing to launch an assault on the national assembly as lawmakers debated an antiterrorism bill. (http://on.wsj.com/1FGxNDB)

* Jana Partners sold a 20 percent stake in its firm to a Neuberger Berman business, the latest sign that the broader investing world is embracing activism. (http://on.wsj.com/1DBKeRU)

* New details about the controversial sale of a house to Mexican Finance Minister Luis Videgaray show the seller didn't make a profit, undermining Videgaray's suggestion that the deal was done out of commercial interest. (http://on.wsj.com/1MPJbxk)

* New tax transparency requirements between multinational corporations and European governments may be broadened further this year to encompass public disclosure of the companies' tax arrangements in Europe. The requirement for public disclosures would go further than a draft bill approved by the European Commission on Wednesday. (http://on.wsj.com/1bgeNk9)

* General Motors Co is closing its plant in Russia and stopping sale of many of its products in that market, a strategic shift aimed at meeting European profit targets and devoting capital to ventures that carry less risk. (http://on.wsj.com/1Ex7tKo)

FT

Holcim board on Wednesday met with French rival Lafarge seeking to save their 40 billion euro ($43.31 billion) merger deal. Heated discussions between the two companies continued over who would lead the combined company, people familiar with the matter said.

Germany has banned a nationwide service of Uber's online ride-hailing service UberPop on Wednesday declaring the use of unlicensed cab drivers and said Uber will face fines up to 250,000 euros each time it operates the service in the country.

General Motors will pull the plug on European Opel brand ride from Russia and shut its St Petersburg plant, in a move to cut losses in the crisis-hit country. Declining oil prices and pressure from western sanctions have weighed on sales in Russia and prompted a 38 percent fall in local registrations last month.

NYT

* General Motors on Wednesday announced plans to largely withdraw from the Russian market by the end of the year, becoming the most prominent company to date to express a lack of confidence in the deeply troubled economy. (http://nyti.ms/1MPKlZB)

* Sony Corp introduced its PlayStation Vue web-based streaming TV service on Wednesday. The service offers a bundle of channels along with a personalized, searchable approach to watching live and on-demand television. (http://nyti.ms/19zI2ho)

* The Federal Reserve on Wednesday moved to the verge of raising interest rates for the first time since the economy fell into recession more than seven years ago, even as officials suggested that the Fed might not pull the trigger until well into the second half of the year. (http://nyti.ms/1I0Pqxr)

* U.S. President Barack Obama on Wednesday denounced the Republicans' latest budget as stingy and shortsighted, taking them to task for proposing to cut domestic programs that he said would yield more jobs and economic benefits for working people who are struggling financially. (http://nyti.ms/1B35Gby)

Hong Kong

SOUTH CHINA MORNING POST

-- Shoppers and tourists flocked to Chanel stores in Hong Kong as the luxury brand slashed prices of classic bags by almost 20 percent. Chanel began cutting prices in Hong Kong on Wednesday after announcing it would realign prices from April 8 on three of its most well-known handbags. (http://bit.ly/1Lwq7bX)

-- Customs officers arrested 5,000 people - almost two-thirds of whom were mainlanders - in the past year for taking more than the allowed amount of baby formula across the border, new figures showed. Statistics presented to the Legislative Council also showed that most offenders were fined with only 157 people being jailed for between one and 140 days. (http://bit.ly/1EwV9d7)

-- A Hong Kong tribunal started a preliminary hearing on Wednesday involving the head of U.S. short-seller Citron Research over allegations that it published a "false and misleading" report about China's fourth-biggest developer, Evergrande Real Estate Group, in 2012. (http://bit.ly/18JuMWo)

THE STANDARD

-- Cathay Pacific bosses have welcomed the approval of the three-runway system in Hong Kong, but say the users-pay plan may need some tweaking. Chairman John Slosar said he believes the planned HK$180 fee for departing passengers would be too much of a burden. (http://bit.ly/193Gj2B)

-- The Hong Kong and China Gas Company has proposed one new bonus share for every 10 existing shares, a tradition over the past five years. Its core profit last year rose 10 percent to HK$7 billion amid buoyant growth in China's gas business. (http://bit.ly/1F61O0E)

HONG KONG ECONOMIC TIMES

-- Bank of East Asia raised HK$6.59 billion ($849.62 million) by selling 223 million new shares at HK$29.5576 each to Sumitomo Mitsui Banking Corp, making the Japanese group the single-largest shareholder of the Hong Kong-listed bank with a 17.5 percent stake.

Canada

THE GLOBE AND MAIL

** U.S. discounter Target Corp will reap some benefits from its troubled foray into Canada that has left angry creditors with hundreds of millions of dollars of debts. The retailer, whose Canadian division filed for bankruptcy protection on Jan. 15, will collect a $1.6 billion tax break in the United States as a result of its move to retreat from this country, according to a new filing. (http://bit.ly/1CwmwVN)

** The University of Toronto has reached a tentative agreement with its 6,000 teaching assistants, that if approved, comes just in time for the rush of essays and exams at the end of term. Terms of the University of Toronto agreement will not be released until union members have seen and voted on its details. (http://bit.ly/1MMDRMU)

** Tribute to Liberty, the charity behind the campaign to erect a monument to the victims of communism has declared zero political activity in its five-year history, even though it originally told the Canada Revenue Agency some of its work would be political. (http://bit.ly/1FE2w4n)

NATIONAL POST

** A tough week in the Canadian oil patch continued on Wednesday, as ConocoPhillips Co became the latest in a string of oil companies to lay off staff. The Houston-based energy major trimmed its Canadian headcount by 7 percent or about 200 employees. (http://bit.ly/1Gtd2d9)

** Prime Minister Stephen Harper struck back on Wednesday at critics of his firearms policy, saying it's "patently ridiculous" to suggest his recent remarks on gun ownership will lead to vigilantism. Harper had stressed that Canada's "moderate" system of gun regulation is far removed from the much more open approach to gun ownership in the United States.(http://bit.ly/1BQvTxA)

** Prime Minister Stephen Harper says his government next week will table a proposal for an "extension and expansion" of the mission in Iraq against the Islamic State, and didn't rule out going into neighbouring Syria. (http://bit.ly/1B0hVpq)

Britain

The Times

RENTOKIL SPRINGS ITS TRAPS FOR GLOBAL GROWTH

Britain's best-known rat catcher, Rentokil Initial Plc , is about to expand its empire with two acquisitions, including one that will mark its entry into Central America. Rentokil will confirm that it has bought Sagrip in Latin America and Eradico Services in Detroit, Michigan.(http://thetim.es/1B1R0JP)

ZARA GOES FOR SIZE AS FAST FASHIONS BOOM

Spain's Zara fashion chain will close some smaller outlets in favour of large stores in prime locations as part of a strategy against online outlets.(http://thetim.es/1bgkzlE)

The Guardian

SWISS AUTHORITIES FREEZE BANK ASSETS AS PART OF PETROBRAS INVESTIGATION

Authorities in Switzerland have frozen assets worth $400 million as part of an investigation into alleged links between Swiss accounts and a sprawling corruption scandal in Brazil embroiling senior politicians and the state-owned oil company, Petrobras.(http://bit.ly/1B2cTZk)

OSBORNE TARGETS MULTINATIONALS AND TAX EVADERS IN BUDGET CRACKDOWN

Government measures to tackle tax evasion and avoidance will raise 3.1 billion pounds ($4.63 billion) for the public purse over the next five years, George Osborne said. (http://bit.ly/1bglrXI)

The Telegraph

ECB BESIEGED BY PROTESTS AS DRAGHI CELEBRATES $1.4BN TOWER

Frankfurt, the euro area's financial capital and home of the common currency, is bracing for demonstrations and sit-ins at locations throughout the city by anti-austerity groups and organizations sympathizing with the plight of Greece.(http://bit.ly/1wZ9VJD)

Sky News

FED SIGNALS MOVE TO INCREASE INTEREST RATE

The Federal Reserve has opened the door for an interest rate increase as early as June, although a later hike appears more likely after it downgraded the expected pace of growth and inflation. (http://bit.ly/1bglzXc)

EX-HSBC CEO: 'CAPITALISM REMAINS IN THE DOCK'

Capitalism and the financial system that underpins it remain "in the dock" in the wake of the banking crisis, yet there remain no credible alternatives to them, the former head of HSBC Holdings Plc, Lord Green, has said.(http://bit.ly/1bglSkA)

The Independent

BITCOIN: GOVERNMENT TO REGULATE CRYPTOCURRENCY TO AVOID MONEY LAUNDERING, SAYS TREASURY

The government is to regulate bitcoin exchanges to stop their use as money laundering hubs, the Treasury said.(http://ind.pn/1bgmjvd)

• As reported here first a month ago: The $9 Trillion Short That May Send the Dollar Even Higher (BBG)
• As an instant target for foes, Clinton may struggle to get message heard (Reuters)
• Emerging Stocks Rally 11th Day as Aussie Weakens on China (BBG)
• Puerto Rico, Investors Enlist Ex-IMF Officials (WSJ)
• Dollar’s Rise Reshuffles Global Economy (BBG)
• Indonesia eyes regular navy exercises with U.S. in South China Sea (Reuters)
• Banca Monte dei Paschi Breaches Exposure Limits to Nomura (WSJ)
• European Bond Buyers Find Negative Doesn’t Necessarily Mean Bad (BBG)
• Saudi Arabia’s Plan to Extend the Age of Oil (BBG)
• Activist Puts Pressure on Qualcomm (WSJ) - translation: hedge fund demands company take on more debt
• U.S. Widens Role in Saudi-led Campaign Against Houthi Rebels in Yemen (WSJ)
• Experts blast U.S. for blocking supercomputer tech exports to China (Xinhua)
• GE's Move Alters The Bond Market (DJN)
• Retailers Are Under Fire for Work Schedules (WSJ)
• Hard-Charging Uber Mixes In Softer Approach (WSJ)

Overnight Media Digest

WSJ

* The Puerto Rico government and the hedge funds that own its bonds are turning to former International Monetary Fund officials to help resolve a growing debt crisis that may require a restructuring more akin to Greece than a troubled city like Detroit. Puerto Rico has retained Anne Krueger, the IMF's former first deputy managing director, as a consultant, said people familiar with the matter.(http://on.wsj.com/1I5K7fL)

* New York's attorney general is scrutinizing 13 big retailers over their staffing practices and whether they require workers to show up or stay home with little notice. The office of New York Attorney General Eric Schneiderman sent letters warning Target Corp, Gap Inc and 11 others that it believes the chains are using on-call scheduling and that such practices may violate a New York law. (http://on.wsj.com/1yj6o9V)

* Qualcomm Inc is under pressure from activist investor Jana Partners LLC to consider a breakup and other options to boost the giant chip maker's sagging stock price. Jana is asking Qualcomm to consider spinning off its chip unit from its patent-licensing business, which accounts for most of the company's profit. (http://on.wsj.com/1EsowPH)

* Sprint Corp is going to start hand-delivering new cellphones. The offer initially will only be available to current customers in the Kansas City area, near the company's headquarters, followed by rollouts later this month in Miami and Chicago. (http://on.wsj.com/1Hjev8d)

* Uber Technologies Inc is fighting a multi front war in the capital of India, one of the company's most important and fastest-growing overseas markets. The U.S. company is defying a ban by Delhi state authorities and competing furiously with local rivals for market share in the world's second-most populous country. (http://on.wsj.com/1amdUFw)

FT

Stakeholders in some of the biggest U.S. companies are set to receive a record $1 trillion in buybacks and dividends in 2015 as blue chip companies' concerns over the global economic outlook has diverted cash away from fresh investment.

The continuing power struggle at German carmaker Volkswagen escalated as a split emerged between the two controlling families Porsche and Piech, as its chief executive Martin Winterkorn refused to surrender his position.

Heineken and Diageo are bracing for their sales to go flat in Indonesia as the government imposes a ban on sales of drinks with less than 5 per cent alcohol volume - mainly beer - in convenience and other small stores from Thursday.

Oil and gas major Royal Dutch Shell is expected to maintain its status as the UK-listed company with the top dividend yield as it gives final touches to its 47 bln pound acquisition of BG Group, according to financial data co. Markit.

NYT

* As prosecutors put the finishing touches on the 2008 indictment of Blackwater security contractors for a deadly shooting in Iraq, the FBI agents leading the investigation became convinced that political appointees in the Justice Department were intentionally undermining the case, internal emails show. (http://nyti.ms/1ynSd3z)

* Margrethe Vestager, the European commissioner overseeing antitrust issues, on Wednesday will make her first trip to Washington to participate in two antitrust conferences. Vestager could take the one step her immediate predecessor, Joaquin Almunia, tried to avoid by filing a set of formal charges, called a statement of objections, which could raise pressure on Google Inc to settle in order to avoid a finding of wrongdoing and a potentially huge fine.(http://nyti.ms/1IF7Red)

* A Texas-born man suspected of being an operative for Al Qaeda stood before a federal judge in Brooklyn this month. The denouement in the hunt for the man, Mohanad Mahmoud Al Farekh, came after a years long debate inside the government about whether to kill an American citizen overseas without trial. (http://nyti.ms/1DAH6EJ)

* Safety deficiencies at a treatment center staffed by Partners in Health, a charity that pledged to fight Ebola in Sierra Leone and Liberia, led to the closure of the center after two clinicians were diagnosed with Ebola. (http://nyti.ms/1DAHjYq)

* A University of California study finds that taxpayers are providing not only support to the poor but also a huge subsidy for employers of low-wage workers, from giants like McDonald's Corp and Wal Mart Stores Inc to mom-and-pop businesses. (http://nyti.ms/1DWr61U)

Canada

THE GLOBE AND MAIL

** Finding itself in the public eye like never before, the National Energy Board is looking to persuade Canadians that the energy regulator is up to the job of protecting their safety and the environment. Board chairman Peter Watson is in the middle of a cross-country tour to meet with municipal officials, First Nations leaders and first responders, and is promising to open the pipeline safety issues to new levels of public scrutiny. (http://bit.ly/1yjE2fF)

** Canada's second spectrum auction of the year is set to begin on Tuesday, with Telus Corp expected to be the major winner of new licenses among the country's three national wireless carriers. (http://bit.ly/1GD1iYN)

** The Conservative government is expanding its code of conduct for the credit and debit card industry to cover the growing gray area of paying for items with a smartphone. (http://bit.ly/1GZV43W)

NATIONAL POST

** The Canadian Armed Forces say one of their ships helped seize more than 600 kilograms of cocaine off El Salvador. The Forces say HMCS Whitehorse helped the U.S. Coast Guard intercept a vessel, where they found 15 bales of cocaine floating in the water nearby. (http://bit.ly/1I686vw)

** A Toronto immigration consultant has been charged with 88 counts for allegedly forging employment letters to obtain visas for religious workers, the Canada Border Services Agency said on Friday. (http://bit.ly/1ciUZgy)

China

CHINA SECURITIES JOURNAL

- A poll of several Chinese financial institutions told the newspaper the country's GDP could average around 7 percent in the first quarter of the year.

- Trust firms which plan to list on China's stock markets must have made a profit for the last three consecutive years, according to the country's securities regulator. The combined net profit over the three-year period must be no less than 1 billion yuan ($161 million).

CHINA BUSINESS NEWS

- China's disciplinary watchdog said it was investigating the chairman of China Mobile Ltd's business in northern Shanxi province.

CHINA DAILY

- China has suspended top environmental officials in China's northwestern Gansu province after a local firm was found to have dumped 83,000 tons of waste into the region's Tengger desert.

SHANGHAI DAILY

- Shanghai authorities will extend a scheme to rein in booming prices of properties near to popular schools, education officials said on Sunday. Families will need to live longer in the property before they can get their kids into local schools.

Britain

The Times

TRAVELODGE'S OWNERS TO CHECK OUT FOR 1 BILLION POUNDS

Travelodge is lined up for a sale that could value the budget hotel chain at more than 1 billion pounds ($1.46 billion) only three years after its rescue from the brink of collapse. Its owners - Goldman Sachs, Avenue Capital and GoldenTree Asset Management - are understood to be preparing to appoint advisers to weigh up strategic options, including a flotation, on the back of soaring profits and a surge of interest in the hotel sector.(http://thetim.es/1OqmbaK)

MARK CARNEY 'NOT ABUSING NON-DOM STATUS'

The Bank of England has defended the non-dom status of Mark Carney, insisting that the governor has not structured his affairs to get around tax.(http://thetim.es/1OqnV3U)

The Guardian

BRITISH HOLIDAYMAKERS LOSE MILLIONS IN INTERNET SCAMS, SAYS REPORT

Fraudsters conned British holidaymakers out of 2.2 million pounds ($3.22 million) last year through a series of Internet-based scams, a report shows today.(http://bit.ly/1Oqoc70)

UK FIRMS' HIRING INTENTIONS 'SKY HIGH' BUT CONCERNS PERSIST OVER PRODUCTIVITY

Employers' hiring intentions are at a "sky high" level and stronger than in the pre-recession boom, but concerns remain about the UK's failure to grow productivity, according to a new report by accountants and business advisers BDO.(http://bit.ly/1OqooDf)

The Telegraph

ED MILIBAND'S DIRECT APPEAL TO SCEPTICAL VOTERS: 'TRUST ME ON THE ECONOMY'

Ed Miliband will today ask sceptical voters to trust him on the economy by putting a pledge to cut the deficit year on year on the first page of Labour's general election manifesto.(http://bit.ly/1Oqpajs)

Sky News

BUYOUT FIRM FLOWERS EYES BID FOR GENWORTH ARM

Genworth Financial, a troubled U.S. insurance company, is in talks with one of the financial services industry's most prolific investors, JC Flowers, about the sale of a business that includes a range of products sold to UK customers.(http://bit.ly/1z8E4lv)

CONSERVATIVES PROMISE TO CUT INHERITANCE TAX

The Conservatives have said they will take family homes out of inheritance tax by introducing a new allowance which effectively increases the threshold for tax to 1 million pounds.(http://bit.ly/1OqoE5f)

The Independent

OPEN-MINDED SHOPPERS WILLING TO TRY NEW PRODUCTS LEADING TO A BOOM IN ETHICAL SPENDING, SAYS REPORT

Shoppers who are happy to be the first to try out new products are driving a boom in ethical spending, from electric cars to DIY energy generation, according to Ethical Consumer magazine's annual report.(http://ind.pn/1OqoQRT)

GENERAL ELECTION 2015: 7.5 BLN POUNDS GAME CHANGER AS LABOUR PLEDGES TO CRACK DOWN ON TAX AVOIDANCE

A Labour government will raise 7.5 billion pounds a year by introducing a crackdown on tax avoidance, Ed Miliband says, as he pledges his premiership will herald an era-defining end to the "old assumptions" of allowing the rich to escape paying taxes.(http://ind.pn/1OqoZov)

Submitted by Dominique Dassault of GlobalSlant

Something Is Very Wrong Here

"Activist Investors", the relatively new classification for corporate agitators, want you to believe that their intellectual tactics/ strategies improve both corporate governance and shareholder returns. That may be true but they also seem to be involved in another, less savory, tactic, that is, inflating their company “ownership” claims with extremely large derivatives positions as outlined in SEC disclosure filings.

Is it legal? It seems like it but it certainly does not “smell” right. This exclusive breed of both newer and established “Activists”, unfortunately, perpetuate the idea that Wall St. is still populated with a “Den of Thieves” softly endorsed by another one of the federal government’s “asleep at the wheel” regulators…SEC chief Mary Jo White.

**************************************************************************

Two recently disclosed positions by “Activist” powerhouses JANA Partners and Carl Icahn will serve to illustrate this phenomenon. Of course, they are not the only firms/personas engaged in controversial positioning techniques.

Any discussion of dicey, “Activist” trading tactics must also include Pershing Square’s Bill Ackman…he who built a very large stake in the “old” Allergan/AGN knowing, full well, that Valeant/VRX would be bidding to acquire the company. Somehow, in the SEC’s complicated and twisted legal morass, that was considered “kosher”.

However this particular “post” will focus on JANA Partners’ place-holding in ConAgra Foods/CAG and Icahn’s footprint in Freeport McMoRan/FCX.

**************************************************************************

First off a little background on JANA/Icahn and their disclosure responsibilities to the SEC.

As of June 30, 2015 [13F Filings] JANA Partners, managed by Barry Rosenstein, managed a portfolio valued at $16.8B with Icahn’s equaling $31.2B. Further, the investment track records, for both, are very good especially since the market trough in 2009 but even prior to that.

In addition to managing capital both JANA/Icahn must also tend to an array of mandated administrative tasks including public filing disclosures with the SEC. The quarterly Form 13F, in particular, is of keen interest to many industry observers.

Amongst other data this filing specifically reveals the fund’s portfolio composition [as of calendar quarter end]. For all to see… newly acquired positions/liquidated prior positions/existing positions trimmed or added to…punctuated by their dollar value. A true window into the portfolio…but it may be time lagged, to a maximum, by 6 Weeks/45 days.

Moreover if any investor [including “Activist’s”] acquires 5% of the common equity outstanding [directly or indirectly], of a publicly traded company, it is required [at a minimum] to file an SEC Schedule 13D within ten days of crossing the 5% threshold.

It is also important to note that a firm can request an exemption from disclosure if a position is currently being acquired as it could interrupt their accumulation pattern and price tolerance[s].

This “Schedule”, once filed with the SEC, immediately becomes publicly accessible. JANA’s 13D was disclosed on June 18, 2015 [5% threshold met on June 8] while Icahn revealed his 13D on August 27, 2015 [5% threshold met on August 17]. Both filings occurred after the close of regular trading hours and adhered to the SEC’s dubious “beneficial ownership” definitions.

**************************************************************************

SEC’s DEFINITION OF BENEFICIAL OWNERSHIP:

The SEC, supposedly in the business of enforcing disclosure, seems to be running afoul of its own mandate. They’ve technically refined Webster’s “Ownership” as “Beneficial Ownership”…certainly loosening/stretching the intuitive definition as follows:

Beneficial Ownership =

Direct/Stock Ownership [D/SO]
+
In-Direct/Derivative Ownership [I/DO]

Despite being combined in the SEC’s “Beneficial Ownership” definition these two “ownership” sub-categories are quite different. Specifically, the typical rights accorded to D/SO i.e. voting and dividends are NOT accorded to I/DO.

Derivatives simply offer a trader/investor the RIGHT to future ownership/liquidation with a “hard” set of conditions/choices [buy/sell, strike price & exercise/maturity dates]. Until/If that RIGHT is exercised the trader/investor actually does NOT own/is NOT “short” the underlying asset.

So the 13D’s [filed by Icahn’s and JANA’s legal clans] classifying “Ownership” stakes as 88M/31M shares of FCX/CAG [suggesting approximate capital commitments of $1.1B & $1B] respectively is, in reality, such a great distance from the truth that it is almost comical [see below].

**************************************************************************

“OWNERSHIP” POSITIONS:

Icahn/FCX [at time of filing]

88M Shares Beneficially Owned
8.46% of FCX Common Shares Outstanding

52.011M = 5% Ownership Threshold [13D]

3.254M Shares = Directly Owned = Stock

80.402M Shares = In-Directly Owned = Forward Contracts
12M Shares = In-Directly Short = Put Options [implied long position]

4.344M Shares = *Unknown [Direct vs. Indirect?]*

JANA/CAG [at time of filing]

30.863M Shares Beneficially Owned
7.20% of CAG Common Shares Outstanding

21.352M = 5% Ownership Threshold [13D]

6.732M Shares = Directly Owned = Stock

19.032M Shares = Indirectly Owned = Call Options

5.099M Shares = *Unknown [Direct vs. In-Direct?]*
___________________________________________________________

*13D filings require disclosure of executed positions within the prior 60 days. Any “positioning” prior = no obligation to disclose.

For JANA, since the 13F [dated 3.31.15], did not reveal any prior position in CAG [unless they were exempted…as discussed above] it is likely the “Unknown” share quantities of 5.099M shares were “acquired” between April 1 and April 19.

Icahn’s “Unknown” share quantities are a little more complicated to track. There was no FCX position listed in the 13F dated 6.30.15 [unless they were exempted…as discussed above]. And despite the claim, in the 13D, of 80.402M shares owned through “Forward Contracts” [a very lightly regulated/regarded derivative] it was only possible to track 57.183M of those shares. Anyway I suppose if he says he owns the derivatives…then he probably does.

Similar to the forward contracts it was only possible to track 3.254M of those shares “Directly Owned”…though the document indicates a position of 7.596M shares. Again …I suppose if he says he owns the shares…then he probably does.*
_____________________________________________________

Consider please, the most important point of this mathematical detail…that Icahn’s initial [direct ownership position] was, possibly, just 3.254M shares [vs. the 88M ownership stake characterized in the 13D filing].

No matter…even if the “Unknown” classification of shares [from above] were entirely included as “Directly Owned” [as the filing “softly” indicates]…it still would equal just 21.38% of the 88M shares claimed as ownership.

As for JANA…their direct ownership position was, possibly, just 6.732M shares [vs. the claimed 30.863M shares characterized in the 13D filing].

And as with Icahn…even if the “Unknown” classification of shares [from above] were entirely included as “Directly Owned”…it would equate to just 38.33% of the 30.863M shares claimed as ownership.

Another more direct way to assess this = without the large derivatives positions…the “Market Moving” 5% ownership threshold, in either case, would not have been met. Plainly not even close. [more on this point later].

**************************************************************************

A pundit may indicate…“You may not like the SEC’s beneficial ownership definitions but those ARE the current rules. Your “beef” is with the SEC…not Icahn/JANA. They’ve really done nothing wrong”. And I’d essentially agree…while also noting that the current SEC “ownership” definition is exceptionally misleading and distorts the “spirit” of true ownership.

But there is much more to this than just the arcane/legal examination of securities ownership/disclosure mandates albeit important to understand.

**************************************************************************

Cornerstone Question #1 =

IF THE “ACTIVISTS” TRULY WISH TO ULTIMATELY/”DIRECTLY” OWN THE STOCK [AND INFLUENCE STRATEGIC COURSE AT A TARGETED COMPANY] THEN WHY THE LOPSIDED “FRONT END” POSITIONING IN DERIVATIVES?

1. The most obvious answer is that they are simply “trading” the 13D disclosures with the most price sensitive securities on the planet. So…a quick flip? It is possible but unlikely.

Both JANA & Icahn have substantial records of legitimately pursuing economic/qualitative reforms at their target companies.

2. Perhaps, then, that the stock is just not liquid enough? In the cases of both CAG & FCX that is just a ridiculous thought. And, typically, if the stock is not too liquid then neither are the derivatives underlying the security.

Anyway, during JANA’s accumulation phase, CAG equity traded about 2M shares/$68M volume/value per/day and CAG is no small company = Enterprise Value = $26.2B comprised of approximately $18.9B [427M shares outstanding] of equity and $7.3B of Net Debt.

And, it appears, JANA was acquiring a position since the beginning of April…not filing with the SEC until June 18th [almost three entire months]. Positioning the common equity, during this extended time period, should not have been too challenging.

FCX was even easier to position than CAG [despite the more brief accumulation window from mid-July to mid-August]…as its liquidity was overwhelming [averaging about 30M shares/$330M traded volume/value per/day].

Actually the stock was in a virtual free-fall [down almost 40% during that time period] and, likely, could have easily been bought in the open market without much detection many “times over”.

And, for the record, its Enterprise Value = $31.5B comprised of approximately $12.5B [1.128B shares outstanding] of equity and $18.97B of Net Debt.

3. Another consideration is that derivatives positions, initially, require substantially less capital than core equities positions but ultimately not…when/if exercised.

4. And then…if the expiration/maturity months are staggered it allows for a more gradual capital commitment. I suppose so.

Some of the above may be true but, even aggregated, are not a tremendously powerful argument for such a dislocated position in derivatives vis-a-vis the common equity.

And if the derivatives positions, for whatever reasons, are so attractive then why even buy any stock? [a point that Icahn seems to appreciate a whole lot more than JANA although, it seems, Rosenstein shares the general sentiment]

Now…to examine the specific positioning techniques.

**************************************************************************

DERIVATIVE POSITIONING TACTICS:

Icahn:
The positioning in FCX [July 17 – August 21] is just a dizzying array of purchased “forward contracts” and the extremely questionable strategy of selling puts [as the true intent is to directly position long]. As noted above some stock [minimal quantities] was “directly” purchased.

Amazingly, or not, a portion of the derivatives were purchased on margin. From the filing…Part of the purchase price of such Shares was obtained through margin borrowing.

You have to love it. Derivatives Purchased On Margin. Hey…Why Not? And this is America’s future Treasury Secretary [as in Trump]?

Specifically, Icahn’s forward contracts and short put position offer great detail.

First of all, the “forward contracts” were purchased on just about every day he was transacting. Secondly, the three different contract strike prices [mostly far “out of the money”] are articulated. Thirdly, the share counts [underlying the forward contracts] are noted. Finally, it is stated that the contracts are length-ily dated to mature/expire in March 2017.

Plus, the filing indicates a closely dated maturity/expiration for the shorted put position of mid-September 2015.

JANA:

Rosenstein’s call option positions in CAG offer a less complex picture than Icahn [although no specific purchase dates were cited]. It appears the call options were predominantly “in the money” and closely dated to maturity [all within seven weeks after the 13D was disclosed…most much sooner.]

However JANA, unlike Icahn, elected not to utilize margin when building their options [and equity] positions. “Such Shares are held by the investment funds managed by JANA in cash accounts and none of the funds used to purchase the Shares reported herein as beneficially owned by JANA were provided through borrowings of any nature.”

It also ought to be noted that JANA did not sell any put options. So “cleaner” than Icahn but still a very large derivatives position ahead of a significant disclosure.

**************************************************************************

Cornerstone Question #2 =

A LARGE DERIVATIVES POSITION AHEAD OF A “MATERIAL” DISCLOSURE?

YES…but the “material” event, ironically, is not a company pronouncement about a transformative strategic initiative. The event, in these cases, is that the well regarded JANA/Icahn have simply announced 13D sized “ownership” stakes in two separate companies…with plans/attempts to increase shareholder value.

And that they utilize the SEC’s compulsory disclosure procedures to host/act as a conduit for their specious, market moving announcements…This is just SO CUNNING & YET…SO BRILLIANT.

**************************************************************************

Cornerstone Question #3 =

IF NOT “THE DERIVATIVES FLIP” THEN WHAT IS THE SPECIFIC STRATEGY?

It is not as obvious as it seems but, still, relatively straight forward.

In a surprising twist it appears these quasi “Masters of the Universe” are, rather than bold and daring, just tremendously risk averse….so risk averse that, despite huge capital bases to draw from, they won’t fully commit to “directly” buying a stock they’ve targeted…until, what I’ve termed, the “Angle” comes about.

The “Angle”…the “Real Angle”, it seems, is to get the stock quickly moving in the direction of/exceed their derivative “strikes”. Of course…Right? Like any rational derivatives player they’ll certainly exercise their “right” to acquire the stock…but only when the market price exceeds their strike price[s]…deferring the uptake of any substantial capital “at risk” until there’s essentially “NO RISK”…as in an EXISTING PROFIT. And their spurious 13D disclosures are just the catalyst to help achieve that objective.

**************************************************************************
And so the news “hits” the wires…the inevitable price surges occur: 10.43% for CAG on June 19, 2015 and 3.04% [28.66% the day prior as the information seemed to have leaked] for FCX on August 28, 2015.

Naturally the especially price sensitive derivatives contracts are immediately turbo charged…even though they’ll likely be exercised…as many are now massively “in the money”. The “out of the money” contracts automatically re-price much higher too…as that elusive “out of the money” feature suddenly seems almost attainable.
**************************************************************************

In the case of JANA this dramatic price crossover feature [market price > strike price], not surprisingly, coincided with the 13D disclosure.

In the case of Icahn, although the 13D disclosure incrementally improved the values of his positions, the majority of the derivatives, were still “out of the money”…but, it seems, only due to their poorly selected [for now] strike price[s]. Still, certainly a good start [with some profitable “marks”]…but more work to be done.

So collectively…somewhat shrewd…but also tremendously slippery. Who wouldn’t want to either: exercise a massively “in the money” derivatives contract or own almost any derivative on a day[s] when the underlying security increases in value by 10.43%/28.46% +.

**************************************************************************

They really do have it “covered”. Don’t they? In the VERY UNLIKELY/IMPROBABLE scenario of an immediate price move down, on a 13D disclosure date, their capital at risk is finite. In the LIKELY/USUAL scenario of a sharp price move higher their capital is favorably exposed in a BIG WAY.

Almost sounds like an asymmetrical capital hedge. But despite the apt classification these positions are not intended to be hedged. They are intended to generate out-sized, positive returns because, as indicated in their 13D filings [including CAG/FCX], the targeted company’s share price is deemed “undervalued”…but, apparently, not “undervalued” enough to buy a lot of stock…just “undervalued” enough to buy a boatload of derivatives.

Because, with a deceptively large ownership position, the true formula they both seemed to adhere to [in these two cases] goes as follows:

1. Build a “Stock-Light”/”Derivative Heavy” Position In A Target Company.
2. File a Schedule 13D, Threatening To Serve As A Company Change Agent, To Move The Stock Price Up.
3. Only Commit “Majority” Capital When Your Derivatives Positions Are “In The Money”.

**************************************************************************

And so, in the midst of all this, just where is SEC Chief Ma-Jo? I’m sure she’s probably “nodding off”, right now, at one of those endless afternoon policy meetings but I suggest she “wake up”… “pound” a Red Bull…and start paying attention.

JANA/Icahn seem to be straddling the razor’s edge of a very dangerous “accumulation” game built on both their own creativity and the ignorance[s] of the SEC. Sure…the “soft dollar-ed” compensated lawyers have it “covered”, but occasionally, they are fallible.

Even though she still can’t determine how to “nail” those High Frequency Traders scalping for nano-pennies on just about every conceivable stock transaction [hint: start looking at Citadel] perhaps she could examine the aggressive trading/positioning disclosures practiced by some “Activist” hedge funds? It may not “smell” right to her either or, perhaps, it is more than just a foul smell?

In August, hedge funds blamed risk-parity funds for their dramatic underperformance.

In September, the underperformance continued however this time, with risk-parity funds supposedly buying stocks, one can't blame them. To be sure, some such as Ackman whose 20 million shares of Valeant are hurting badly, will blame the Martin Shkrelis of the world for the biggest biotech tumble in years, but others may have to bite the bullet and admit it is their own lack of ability to come up with alpha in a centrally-planned "market" that is the reason.

That, and idea "clustering", of course, because over the past few years the best performers have been the "hedge fund" hotels - stocks that have dozens if not hundreds of hedge funds invested and piggybacking on each other. The problem is that in the past two months it was the hedge fund hotels that have led to the biggest losses. Even the mainstream media finally discovered this little "short cut" to creating if not alpha, then levered beta.

A few days ago, Reuters reported that "new data shows that some of the industry's biggest firms' top 10 stock picks bear striking resemblances to each other."

You don't say....

The same four holdings appear on the top 10 lists of John Paulson's Paulson & Co and Nehal Chopra's Ratan Capital, according to a report Symmetric IO released on Monday.

 

The data also showed Coatue Management had five of the same top 10 picks as Whale Rock Capital Management, and four listings in the top 10 list of Stephen Mandel's Lone Pine were also on Chase Coleman's Tiger Global chart.

 

Symmetric, which tracks more than 1,000 hedge funds, calculated its findings based on their second-quarter U.S. stock holdings, which they reported to the Securities and Exchange Commission on Aug. 14.

The report was confused: "There is no obvious reason why these funds are in the same stock names, but identifying the fact that they are is very helpful to hedge fund investors," said Symmetric Managing Director Sam Abbas. "Investors try to search out the best hedge funds, and suddenly they find that these firms are invested in the same top names."

Actually, there is precisely zero confusion why hedge funds cluster in the same names: it's called idea dinners, in which one "analyst" comes up with a "brilliant" idea (such as Glencore, where nobody apparently even read the company's annual report) and then 10-20 others follow right in. Incidentally, it is precisely this type of "activist" hedge fund idea dinners that the SEC is currently probing following our report from August of last year "Is The SEC Asking These Hedge Funds Why They All Rushed Into Allergan Last Quarter?"

And now that the SEC is looking into hedge fund hotels, so are hedge fund investors who are suffering dramatic losses.

Here is Reuters with a follow up on some of the most prominent funds that supposedly "hedge" doing anything but that.

Billionaire stock pickers David Einhorn, Daniel Loeb and Barry Rosenstein on Wednesday told their wealthy investors they lost money in September as market turmoil inflicted more pain on some of America's most prominent hedge funds.

 

The three men were among the first to tabulate their monthly performance numbers and their losses suggest that even bigger declines will be reported by other hedge funds in the days ahead, after global markets tumbled this month amid persistent fears that China's economy is slowing.

 

Einhorn's Greenlight Capital fund fell 3.6 percent in September, leaving the $11 billion firm off 17 percent for the year to date, two people familiar with the figures said on Wednesday.

 

Loeb's $17.5 billion Third Point fell 4.8 percent in September. It is down 3.7 percent for the year while his more aggressively positioned Third Point Ultra fund lost 6.7 percent, putting it off 7.5 percent for the year, a person familiar with the numbers said.

 

Rosenstein's $11 billion Jana Partners lost 3.8 percent in September and is now off 6.6 percent, a person familiar with the numbers said.

 

Einhorn is now on track to post his first down year since the financial crisis in 2008 - a big blow for a manager who had been delivering average annual returns of about 20 percent.

The causes for the pain? Why the "hotel" names of course, those companies in which everyone had been invested because "they worked" on the way up. They are no longer working.

At Greenlight, Einhorn is delivering some of the industry's worst numbers, thanks largely to soured bets on renewable energy company SunEdison and Consol Energy, and a losing gamble on Micron Technology.

 

Rosenstein's biggest bets on Qualcomm, Walgreens Boots Alliance and Hertz all saw losses, and he was also hurt by a 24 percent sell-off in pharmaceutical company Valeant.

 

At Third Point, declines in Amgen and Allergan weighed on performance.

All those names are very familiar to anyone who has watched the most popular names among the hedge fund community (with AAPL of course in the top position for years):

But more than even idea and thesis clustering, the biggest culprit for the performance collapse is the Fed itself, which for years had been the market's Chief Risk Officer, giving alpha-deficient hedge funds the ability to more than make up for their inability to come up alpha by levering beta and hoping nobody noticed (even though we have been showing precisely this for years most recently in "What "Smart" Money? Hedge Funds Underperform Market For Seventh Straight Year")

Well, now that the Fed is starting to lose control of the markets, people - and especially hedge fund LPs - are noticing, and they are not happy.

It remains unclear if following significant losses for such marquee names as Greenlight, Third Point and Jana, not to mention Pershing Square, LPs will unleash the redemption requests. Because in a market as illiquid as this one, that alone may be sufficient to put up the dreaded "hedge fund" gates for the first time in 7 years, resulting in the infamous tide going out and revealing a whole lot of naked billionaires.

For those eager to cut to the chase and curious if overnight we have had another standard USDJPY ramp levitating US equity futures on low volume, the answer is yes. And since the USDJPY carry was patient enough, it managed to trigger the 2100 ES stops and as of this moment the futures were comfortably on the politically-correct side of 2100.

The levitation is across the board:

• S&P 500 futures up 0.3% to 2102
• Stoxx 600 up 0.1% to 381
• MSCI Asia Pacific down 0.2% to 135
• US 10-yr yield up less than 1bp to 2.23%
• Dollar Index up 0.09% to 98.04
• WTI Crude futures up less than 0.1% to $46.35
• Brent Futures up 0.3% to $48.73
• Gold spot up less than 0.1% to $1,108
• Silver spot down 0.4% to $15.03

With the summary out of the way, let's look at the key overnight event in an otherwise sleepy tape which for the second day in a row came out of China, where starting with yesterday's purposefully "leaked" old news by the PBOC that led to a limit-up surge in brokers, today we saw a continuation of this with euphoric sentiment and the SHCOMP soared in early trading, jumping over 20% from its August lows and entering a fresh bull market. This is the 3rd time since the crash in June that Chinese stocks have staged a substantial.

To be sure, the rally is not based on fundamentals, with China's GDP continuing to slide, its commodity sector under gruelling stress, and as moments ago China's Mofcom reported:

• CHINA MOFCOM: MAJOR COMMODITY PRICES TO STAY LOW INTO NEXT YR
• CHINA MOFCOM: EXPECTS SHARP DROP IN IMPORTS THIS YEAR
• CHINA MOFCOM: DIFFICULT TO SEE FAST EXPORT GROWTH IN Q4

So what is going on? The following three charts from Bloomberg explain it.

First, short sellers are now officially gone (and unofficially arrested). Per BBG, "Short sellers have largely been shut out of China’s market after curbs by both the government and brokers made it more difficult to bet on falling share prices."

Then, just like with Bitcoin, there has been a recent surge in volume: "Trading has picked up in Shanghai as shares rallied, an indication that ordinary investors are starting to take over from the government-run funds that propped up prices during the depths of the rout."

Most importantly, margin debt is once again coming back: "Investors are slowly rebuilding positions using borrowed money. Margin financing surged to more than 2.2 trillion yuan at the height of the stock boom, before falling by more than half in the bust. It’s now back above 1 trillion yuan, adding fuel to the rally but also raising the odds of bigger price swings."

End result: Chinese markets closed higher with the Shanghai Comp. (+2.2%) in bull-market territory. Even with this latest surge, it remains around 30% lower than their June highs, which were the highest levels seen in the index for 7 years.

Elsewhere in Asia equity markets traded mixed following the weak close on Wall St.
where commodity weakness and prospects for a December rate hike weighed
on sentiment. This saw pressure in the ASX 200 (-0.9%) with financials
among the underperformers, after earnings from CBA. Nikkei 225 (+1.0%)
was lifted as JPY remains weak, following strong results from Japan
Tobacco and Fast Retailing's Uniqlo.

Asian wrap:

• MSCI Asia Pacific down 0.2% to 135
• Nikkei 225 up 1% to 19116
• Hang Seng down less than 0.1% to 23051
• Shanghai Composite up 1.8% to 3523
• S&P/ASX 200 down 0.9% to 5193

Key Asian news from BBG:

• Australia Halts RMBS Auctions After Volumes Less Than Expected: No bids were accepted by govt at last RMBS auction
• Draghi Beating Kuroda in Easing Drives Europeans to Japan Debt: Foreign buying of JGBs reaches record for Jan.- Sept. period
• JPMorgan India Fund Woes Spurs Tighter Redemption Regulations: Sebi demands greater disclosures from credit rating agencies
• China Regulator Probes Accusations Alibaba Pressured Merchants: Agency accepts request to examine Singles’ Day tactics: JD

* * *

On to Europe where stocks are likewise solidly in the green after the latest disappointing news out of Germany where German industrial orders dropped "unexpectedly" in September due mainly to weaker foreign demand, in a sign that Europe's biggest economy may loose steam at the end of this year.

According to Reuters, contracts for 'Made in Germany' goods were down by 1.7% on the month, the economy ministry said on Thursday. It is the first time since the summer of 2011 that orders have dropped for three consecutive months and compares with a Reuters consensus forecast for a rise of 1.0 percent.

If that wasn't enough to push the Stoxx50 higher, we also got a miss in EU Retail Sales, which declined -0.1% in October, down from 0.0% in September and below the 0.2% increase expected.

Ironically, at the same time, the EU released its latest forecast for 2015 which saw an increase for 2015. The WSJ reports that "low oil prices and easy money will boost European growth this year more than previously expected, the European Union said Thursday, but it cautioned that a slowdown in emerging economies and increased global uncertainty could damp the economy’s positive momentum."

Economists at the commission forecast that gross domestic product in the 19-nation eurozone would grow 1.6% this year, up from their previous estimate in May of 1.5%. They predicted growth of 1.9% in the 28-nation EU, up from 1.8% in May. However, the commission slightly trimmed its forecasts for next year, seeing eurozone growth at 1.8%, down from the 1.9% it forecast in May and EU growth at 2%, down from the previously forecast 2.1%.

It is not clear why this is not bad news for markets since an increase in growth expectations makes more Q€ less likely, although the answer is simple: nobody believes the forecast.

As a result of this negative current data coupled with clueless optimistic forecasts, stocks in Europe are broadly up, with the Euro Stoxx: 0.5%, with defensive sectors outperforming ahead of key risk events later today in the form of the BoE's Super Thursday and US NFP tomorrow, while Bunds trade marginally lower in line with today's supply, which equates to around 109k Bund futures and the Short-Sterling curve trades a touch steeper as market participants position for the upcoming BoE events. In terms of stock specific news, Adecco (-8.8%) and Credit Agricole (-6.0%) are among the worst performers after reporting their earnings pre market.

Europe Wrap:

• Stoxx 600 up 0.1% to 381
• FTSE 100 down 0.4% to 6385
• DAX up 0.6% to 10905
• German 10Yr yield down 1bp to 0.59%
• Italian 10Yr yield down less than 1bp to 1.67%
• Spanish 10Yr yield up less than 1bp to 1.76%
• S&P GSCI Index down 0.2% to 359.5

Key European news from BBG:

• German Factory Orders Unexpectedly Decline for Third Month: Indicator unexpectedly extended a series of declines in September amid a slump in demand for investment goods in the euro area.
• SocGen Net Rises on Consumer Bank Before Branch Closures: Co. reported 28% increase in 3Q profit on improved consumer- banking results that outweighed a slump in trading revenue.
• Adidas Raises 2015 Forecasts, Plans to Cut Jobs at Golf Unit: Co. raised FY forecasts, said it’s cutting jobs at its languishing golf-gear division as it tries to appease investors pushing for faster change.
  

In FX markets, EUR saw initial softness after the unexpected fall in German factory orders (M/M -1.70% vs. Exp. 1.00%), however EUR/GBP has since recovered and trades little changed , with EUR/USD also initially moved higher on touted profit taking following the recent slide, while EUR/USD 1-month vol which captures Dec ECB policy meeting remains elevated and trades at 12.4 (vs.9.6 on Monday) and despite the negative outlook for the pair, touted corporate buying and option hedging flow saw the pair recover off overnight lows. Elsewhere, USD/JPY earlier saw strength after tripping stops on the break of yesterday's high, however further upside by USD/JPY has been capped by touted double-no-touch (DNT) expiry at 122.00 (118.00 and 122.00 structure).

RBA Governor Stevens said that accommodative policy would be appropriate for some time and if policy were to change, it would be easing rather than tightening . Stevens also commented that he doesn't see a significant effect of the bank mortgage increases which so far is equal to around a half of a 25bps rate reduction.

In commodities, oil trades relatively flat in what has been a choppy session for commodities after yesterday saw DoE crude oil inventories (W/W 2847K vs. Exp. 2500K, Prey. 3376K) showed a greater than expected build causing WTI and Brent prices to fall. NatGas has trended lower with the EIA natural gas storage change later today expected to show a build (Exp. 53bcf, Prey. 63 bcf). The metals complex has seen gold trade relatively flat to remain near their lowest levels in a month following comments from Fed Chair Yellen that a December Fed hike remains a live possibility.

On today's calendar, the main focus in the European session today will be the UK’s BoE meeting which will see the latest inflation report released, the meeting minutes and also comments from the BoE’s Carney shortly after. Datawise, Euro area retail sales and German factory orders are the main releases of note this morning.

In the US we get Q3 nonfarm productivity and unit labour costs due along with the latest initial jobless claims. It’s a big day for Fedspeak also with Dudley and Fischer set to speak at 1.30pm GMT (along with the IMF’s Lagarde), followed by Lockhart at 6.30pm GMT. Former Fed Chair Bernanke is also scheduled to give the keynote speech at an IMF conference at 9pm GMT tonight. In terms of earnings, we’ve got 24 S&P 500 companies set to report their latest quarterly numbers including Kraft Heinz and Walt Disney. In the Stoxx 600 we’ve got 32 companies scheduled to report including Astra Zeneca and Deutsche Telekom.

Top News:

• Fed’s Most Powerful Trio Keep Dec. Rate Rise on the Table: Speaking in New York hours after Yellen’s House testimony, Dudley said he agreed with the chair, but “let’s see what the data shows.”
• Whole Foods Plunges as Flagging Sales Renew Growth Concerns: Same-store sales fell 0.2% in 4Q, representing worst performance in more than 5 years.
• Facebook Sales Top Estimates, Fueled by Mobile Advertising: Social network now has 1.01b daily visitors; monthly users jumped 14% percent to 1.55b.
• Autodesk CEO Blasts Activist Investors After Sachem Head’s Move: Comments about focus only on short-term results come after activist reveals 5.7% stake.
• Credit Agricole Plunges on Lower Trading, Consumer Bank Sales: Shares down most since Aug. after lender reported decline in profit at its investment bank, also decline in consumer-banking revenue at the French LCL branch network.
• Jet.com Said to Near Funds Valuing Amazon Rival at $1.5b: Co. close to raising $500m-$550m in funding round led by Fidelity Investments, according to person familiar.
• Jana Partners Exits Valeant, Takes Microsoft, Baxter Stakes: Jana established position in Valeant in 4Q 2014 and owned 1.3m shares at end of June.
• Tech, Banking, Farming Among U.S. Winners in Pacific Trade Deal: U.S. Releases text of Trans-Pacific Partnership accord
• Bomb-Plot Suspicion Becomes Top Theory in Crash of Egypt Jet: Preliminary evidence suggested Islamic State involvement, investigators examining prospect that someone was bribed to get bomb on board.
• Musk’s SpaceX Finds Crowd for $3.5 Billion NASA Contract: Co. in four-way derby with Boeing, Orbital ATK, Sierra Nevada, each of which relies to some extent on rockets with Russian engines.
• China Stocks Enter Bull Market as State Stimulus Reverses Rout: Shanghai Composite climbed 1.8% to 3,522.82 at close, taking its advance from its Aug. 26 low to >20%. China Signals Reserve Ratios May Be Used to Discipline Banks: Officials want to control competition after freeing up rates.

Bulletin Headline Summary from Bloomberg and RanSquawk

• Stocks in Europe have been fairly mixed with defensive sectors outperforming ahead of key risk events later today, while Shanghai Composite has now gained over 20% from August lows
• EUR saw initial softness after the unexpected fall in German factory orders (M/M -1.70% vs. Exp. 1.00%), however EUR has since recovered and trades little changed against both GBP and USD
• Today's highlights include BoE's 'Super Thursday, US challenger job cuts, weekly jobs data and EIA Natgas storage change, as well as comments from ECB's Draghi, Fed's Harker, Dudley, Evans, Tarullo and Lockhart
• Treasuries little changed, 2Y yields highest since 2011 as markets prepare for October payrolls report tomorrow; Yellen yesterday said a rate hike next month was a “live possibility.”
• Also yesterday: NY Fed’s William Dudley both said the Fed could boost interest rates as soon as next month, while Vice Chairman Stanley Fischer voiced confidence that inflation isn’t too far below the central bank’s goal
• The European Commission cut its euro-area growth and inflation outlook for next year, citing more challenging global conditions and fading impetus from lower oil prices and a weaker euro
• Germany’s expanding refugee population should lift the nation’s economy by boosting spending in the short term and expanding the labor market in the years ahead, the EC said
• EC President Jean-Claude Juncker, whose appointment Great Britain’s David Cameron sought to block, has handed the U.K. PM ammunition to use against his opponents as the British government prepares to submit its wish-list of EU reforms as early as next week
• China’s stocks rose, with the benchmark index entering a bull market, after an unprecedented state rescue effort halted a $5t crash and ordinary investors returned to the market
• $5.6b IG priced yesterday, $1.2b HY priced yesterday. BofAML Corporate Master Index OAS narrows 1bp to +163, YTD range 180/129. High Yield Master II OAS narrows 4bp to +573, YTD range 683/438
• Sovereign 10Y bond yields mostly lower. Asian stocks mostly lower, European stocks gain; U.S. equity-index futures rise. Crude oil and gold little changed, copper falls

Key US Events

• 7:30am: Challenger Job Cuts y/y, Oct. (prior 93.2%)
• 8:30am: Initial Jobless Claims, Oct. 31, est. 262k (prior 260k)
  • Continuing Claims, Oct. 24, est. 2.140m (prior 2.144m)
• 8:30am: Non-farm Productivity, 3Q P, est. -0.3% (prior 3.3%)
  • Unit Labor Costs, 3Q P, est. 2.5% (prior -1.4%)
• 9:45am: Bloomberg Consumer Comfort, Nov. 1 (prior 42.8)

Speakers:

• 7:00am: Bank of England bank rate, est. 0.50% (prior 0.50%)
• 7:45am: BOE’s Carney holds news conference
• 8:30am: Fed’s Harker speaks in Philadelphia
• 8:30am: Fed’s Dudley and Fischer and IMF’s Lagarde speak in New York
• 12:45pm: Fed’s Tarullo speaks in Chicago
• 1:30pm: Fed’s Lockhart speaks in Bern, Switzerland
• 7:30pm: Reserve Bank of Australia issues monetary policy statement
• 11:00pm: Bank of Japan’s Kuroda speaks in Tokyo

DB's Jim Reid completes the overnight wrap

Central bankers continue to shake and stir markets at the moment. Yesterday it was Yellen's turn again after her hawkish remarks sent 2-year US yields to their highest since April 2011, the Dollar up +0.82%, commodities lower (WTI -3.30%) and the probability of a rate hike next month to 58% from 50% the day before. It’s clear that the committee want to give themselves every chance of being able to hike in December which means they have to try to get the probability of such an event higher. Obviously if this has a detrimental impact on global assets the probabilities will drop again and the Fed are less likely to go. So the dance starts again.

Some strong-ish data reinforced those themes yesterday. The ADP employment change report for October came in pretty much as expected at 182k (vs. 180k) firming expectations for a similar number at Friday’s payrolls. The ISM non-manufacturing print for last month rose 2.2pts to a solid 59.1 (vs. 56.5 expected), with the employment subcomponent in particular (59.2 vs. 58.3) up again and back near its July post-recession high. Interestingly the spread between the employment components in the two ISM’s (manufacturing and non-manufacturing) is now at the second largest on record. Meanwhile the final October services PMI was revised up 0.4pts to 54.8 leaving it just shy of the September reading, while the composite nudged up half a point to 55 which matches September. Finally the September trade deficit reading of $40.8bn more or less matched expectations, reaching a seven-month low on lower fuel imports. Yesterday’s data saw the Atlanta Fed revise their Q4 GDP forecast once again, upgrading it back up to 2.3% from 1.9% on Tuesday.

Back to Yellen quickly and her comments yesterday in front of Congress. Of significance, the Fed Chair said that ‘at the moment what we see is a domestic economy that is pretty strong and growing at a solid pace, offset by some weakening spilling over to us from the global economy’. She went on to say that ‘what the committee has been expecting is that the economy will continue to grow at a pace that is sufficient to generate further improvements in the labour market and to return inflation to our 2% target over the medium term’. Reinforcing the hawkish tone from the FOMC, this led Yellen to suggest that ‘if the incoming information supports that expectation then our statement indicates that December would be a live possibility’.

Those comments were then backed up at the end of the US session by NY Fed President Dudley who said that he fully agrees with the view of Yellen that December is a live possibility, but also wanted to ‘see what the data shows’ and that he would ‘probably want to see a little bit more in terms of wage inflation’. Earlier in the day Fed Governor Brainard had said that the domestic outlook is encouraging, while on inflation noted that survey measures of expectations have been reassuring for the most part but that some market-based measures have dipped lower.

Yellen’s comments saw risk assets end their strong start to the week yesterday. The S&P 500 retreated -0.35% as energy stocks were hit hard (Oil also under pressure following the latest US inventory numbers) while the Dow was -0.28%. US credit indices widened with CDX IG out a couple of basis points by the end of the session although it didn’t stop nearly $6bn of new issues pricing.

Despite that weaker showing for risk assets last night, the news this morning is of a strong session for Chinese equities with the Shanghai Comp (+2.81%) technically entering a bull market having now risen over 20% from the August 26th lows. The CSI 300 is up over 3% despite there appearing to be little in the way of new news out. Markets in Japan have seen reasonable gains also with the Nikkei and Topix +1.01% and +0.95% respectively, while the Hang Seng is +0.10%. Elsewhere in Asia, markets are generally following the US lead with bourses in Taiwan, Korea, Australia and Indonesia all moderately lower as we go to print. US equity futures are more or less unchanged while credit indices in Asia are generally a basis point wider.

It was a bit more of a mixed session in Europe yesterday. The Stoxx 600 closed +0.51% along with modest gains for the CAC (+0.25%) and IBEX (+0.08%) although it was a much weaker day for German equities as the DAX tumbled -0.97% having being dragged down by a 10% fall for VW following the latest fallout in the scandal regarding the internal probe and CO2 emissions in petrol vehicles which we touched upon yesterday.

There was better news in yesterday’s October PMI numbers out of Europe however. The final Euro area services reading was revised down a modest 0.1pts to 54.1, which saw the composite PMI at 53.9 (flash 54.0, September 53.6) remaining resilient. Germany saw a slight negative surprise in its final composite reading (-0.3pts to 54.2) although was still up relative to September. Moderate gains were seen for France (+0.3pts to 52.6), Italy (+0.5pts to 53.9) and Spain (+0.4pts to 55.0). Our colleagues in Europe noted that the solid October survey data point to resilient Euro area growth and that the PMI’s are in line with +0.4% qoq Euro area growth. They also point out that if we see no change for the rest of 2015, then this represents a slight upside to their +0.3% qoq Q4 call, which is down to their more cautious view on Germany.

Meanwhile, there was some chatter out of the ECB yesterday too with Governing Council member Smets saying that inflation is too low following an interview with German press Handelsblatt. Smets said that ‘even if this low inflation is related mainly to falling oil prices, there is a danger that it will have a negative impact on inflation expectations and they could lose their anchoring’. Echoing Draghi’s comments, Smets went on to say that ‘as central bankers, it is our job to be concerned’ and that ‘we will re-evaluate the situation at our next council meeting’.

Yesterday saw 25 S&P 500 report their latest quarterly numbers, the highlight being a better than expected Q3 report from Facebook (beating revenue and earnings expectations) which sent shares up into the close. Time Warner was also out with their latest Q3 report which, while coming in ahead of expectations, saw management downgrade 2016 guidance which resulted in the share price collapsing nearly 7%. All told 18 (72%) companies beat earnings expectations yesterday and 15 (60%) notched a beat at the sales line. The latter was much better than the overall trend so far and helped to lift revenue beats now to 45% from 44% this time yesterday, while earnings beats have held steady at 73%. Meanwhile in Europe we’ve seen 257 Stoxx 600 companies report and the trend continues to remain weak with just 49% beating earnings expectations and 46% beating sales expectations.

Moving onto the day ahead, the main focus in the European session today will be the UK’s BoE meeting which will see the latest inflation report released, the meeting minutes and also comments from the BoE’s Carney shortly after. Datawise, Euro area retail sales and German factory orders are the main releases of note this morning. Across the pond this afternoon we’ve got the Q3 nonfarm productivity and unit labour costs due along with the latest initial jobless claims. It’s a big day for Fedspeak also with Dudley and Fischer set to speak at 1.30pm GMT (along with the IMF’s Lagarde), followed by Lockhart at 6.30pm GMT. Former Fed Chair Bernanke is also scheduled to give the keynote speech at an IMF conference at 9pm GMT tonight. In terms of earnings, we’ve got 24 S&P 500 companies set to report their latest quarterly numbers including Kraft Heinz and Walt Disney. In the Stoxx 600 we’ve got 32 companies scheduled to report including Astra Zeneca and Deutsche Telekom.

While the drama that takes place every three months on the 15th of each February, May, August, and November when hedge funds release their long equity holdings disclosures in quarterly 13F filings for the quarter that ended 45 days earlier, is vastly overblown (simply because current holding periods for most speculators are far shorter), 13-F statements do provide a useful glimpse into the state of mind of some of the smartest people in the room.

And, as Bloomberg summarizes, the just concluded 13-F bonanza, "some of the world’s top hedge fund managers scaled back their U.S. stock investments last quarter as markets tumbled."

This follows our report from last week that Ray Dalio's Bridgewater has unloaded some 31% of its US equity holdings in Q3, mostly those facing Latin American exposure.

Back to Bloomberg:

The value of Stan Druckenmiller’s disclosed U.S. equity holdings dropped 41 percent to $868 million, according to a filing from the billionaire’s family office. The listed holdings at Louis Bacon’s Moore Capital Management fell 39 percent to $1.65 billion, while at David Tepper’s Appaloosa Management, they dropped 30 percent to $2.82 billion.

One thing to note: Druckenmiller kept, and even levered up his investment in gold, converting his equity exposure in GLD into call options of the same underlying.

Some of the most closely watched money managers are retreating from U.S. stocks after the market has more than tripled from its 2008 low. Druckenmiller, who produced average annual returns of 30 percent from 1986 through 2010 at his Duquesne Capital Management, told an investor conference earlier this month that his outlook on equities could turn negative. Tepper, Appaloosa’s billionaire founder, said in September that he’s not as optimistic on the stock market as he could be because expectations for corporate earnings were high.

 

Druckenmiller’s Duquesne Family Office sold out of 18 equity positions in the third quarter, led by a $324 million stake in an exchange-traded fund that tracks gold prices, and reported seven new positions. Moore divested 187 investments, such as Chinese search engine Baidu Inc., while adding 81 new stakes. Appaloosa got out of seven stocks, including Alibaba Group Holding Ltd., and reported five new holdings.

“I’m not as bullish as I could be because I have problems with earnings growth, problems with multiples,”

 

Tepper told CNBC in the September interview, referring to price-to-earnings ratios. “I can’t really call myself a bull.”

The question is whether Tepper bought in the fourth quarter.

Other sellers included Zach Schreiber, who had worked for Druckenmiller before running PointState Capital, sold out of 69 equity positions in the third quarter including energy companies TransCanada Corp. and Whiting Petroleum Corp., and added 18 new stakes, according to a filing. The value of PointState’s U.S. stock holdings fell by more than half to $3.2 billion.

Below, courtesy of Bloomberg, is the full summary of what the most prominent hedge fund names did in Q3:

ADAGE CAPITAL

•    Reports new stakes in CFG, LMT, DISH, MPC
•    Boosts PCP, CAM, TYC
•    Cuts UTX, AAPL, SLB
•    No longer shows MMM, ENB, MW, EXC

APPALOOSA MANAGEMENT

•    Reports new stakes in LUV, EXP, WMIH, ALL, IR
•    Boosts DAL, NXPI, URI, TEX, CBI
•    Cuts GM, AAPL, PCLN, GT, HCA
•    No longer shows BABA, MAS, MHK, BAC, RF

BAUPOST GROUP

•    Reports new stakes in AA, PYPL, FOX, OLN
•    Boosts AR, LNG, VRTV, SN, BITI
•    Cuts MU, OCN, AOI, ALDW

BERKSHIRE HATHAWAY

•    Reports new stakes in T
•    Boosts PSX, CHTR, SU, GM
•    Cuts GS, WMT, DE, CBI, WBC

BLUE HARBOUR

•    Reports new stakes in BW, SWI, FOSL
•    Boosts XLNX, AVT, AGCO, ISBC
•    Cuts AKAM, TRCO, CLH, CHS
•    No longer shows HAWK, CACI

BLUEMOUNTAIN

•    Reports new stakes in NUVA, EURN, TERP, LEA
•    Boosts AVGO, BIIB, BEAV, AXP
•    Cuts AGN, TWC, TSO, HOT
•    No longer shows FLT, NRF, AKS

BRIDGEWATER ASSOCIATES

•    Reports new stakes in RL, T, FDX, HST, ORCL
•    Boosts SYMC, PEP, EMN, EXC, KSS
•    Cuts AAPL, SU, FL, CNQ
•    No longer shows CMG, ENB, VAR, SYY, CMCSA

COATUE MANAGEMENT

•    Reports new stakes in Z, ADSK, VDSI, W, CLF
•    Boosts NFLX, EXPE, ADBE, AGN
•    Cuts AAPL, BRCM, TWC, VIPS, LNKD, FB
•    No longer shows TMUS, BABA, GE, ATHM, CRM, EBAY

CORSAIR

•    Reports new stakes in ARMK, NSM, ENH
•    Boosts OLN, VWR, IMS
•    Cuts RJET, IACI, GSM, HUN
•    No longer shows DGI, BLL, WMB

CORVEX MANAGEMENT

•    Reports new stakes in APC, ODP, EBAY, TWC, PFE
•    Boosts AET, AGN, VER, HUM
•    Cuts ENDP, FNF, BUD, AXLL, TAP
•    No longer shows ICE, LNG, CIT, CBS, VIAB

DUQUESNE FAMILY OFFICE

•    Reports new stakes in AMZN, UA, EXPE, CCL
•    Boosts FB, CTRP, JD, WDAY
•    Cuts DOW, WFC, ILMN
•    No longer shows LYB, HAL, FCX

ELLIOTT MANAGEMENT

•    Reports new stakes in AGN, PLCM, PRGO, VMW, SQM
•    Boosts CTXS, CMCSA, ODP, MITL, CDK
•    Cuts JNPR, APC, FOX, TWC, WLL
•    No longer shows RYAAY, VCLT, LQD, DISCA

EMINENCE CAPITAL

•    Reports new stakes in YHOO, YUM, TTWO, ATVI, TMO
•    Boosts GMCR, SJM, ADSK, BIDU
•    Cuts FOSL, AIG, GPI, CCL, ZNGA
•    No longer shows JPM, PVH, PCP, BID, FLS

ETON PARK CAPITAL

•    Reports new stakes in SHW, CI
•    Boosts RGO, ADBE, BRCM, MSFT, SBAC
•    Cuts GOOG, AER, ODP, BEAV
•    No longer shows ZBH, MYL, HUM, MSI, SYK

FAIRHOLME CAPITAL

•    Reports new stakes in CNQ, C, SRG, IBM, DNOW
•    Boosts SRSC, NOV
•    Cuts AIG, BAC

GATES FOUNDATION

•    Boosts BRK/B
•    Cuts BP

GLENVIEW CAPITAL MGMT

•    Reports new stakes in WRK, A, SIRI, CHTR, CP
•    Boosts CI, MCK, HTZ, HLS, TEVA
•    Cuts ABBV, WOOF, C, ENDP, SUNE
•    No longer shows MCD, DHR, PSX, SBGI, IMS

GREENLIGHT CAPITAL

•    Reports new stakes in CNXC, GRMN, GLBL
•    Boosts AAPL, KORS, DDS, UIL
•    Cuts SUNE, MU, VOYA, AMAT, SEMI
•    No longer shows CFG, LRCX, SPR, HTZ, M

HAYMAN CAPITAL MGMT

•    Reports new stakes in IPXL, CF, GWPH, DBVT, DNAI
•    Boosts BMRN, NMIH, VRTX, ENDP
•    Cuts MYL
•    No longer shows PRGO, OAS, WLL, NFX, SM

HIGHFIELDS CAPITAL MGMT

•    Reports new stakes in AMT, BEAV, ABBV, PYPL, TRIP
•    Boosts DD, MCD, MSFT, TEVA, CBS
•    Cuts MHFI, ICE, APC, APD, IBM
•    No longer shows MON, BHI, CVE, LDOS, ABX

ICAHN ASSOCIATES

•    Reports new stakes in PYPL, FCX, AIG
•    Boosts LNG
•    Cuts HOLX
•    No longer shows EBAY

ICONIQ CAPITAL

•    Reports new stakes in AMLP, RIG, CSJ, AKAO
•    Boosts DVY, IWB, EFA, IDV, PXD
•    Cuts IAU, IWM, PFF, VWO, VEA
•    No longer shows W, CYBR

JANA PARTNERS

•    Reports new stakes in BAX, MSFT, MAT, ZTS, ARMK
•    Boosts CAG, AGN, BKD
•    Cuts RAX, QCOM, TWX, STRZA, LGF
•    No longer shows VRX, JCI, PCP, AER, URI, HDS

LAKEWOOD CAPITAL

•    Reports new stakes in BIDU, WRK, WMIH
•    Boosts FDX, MA, AGN, UNP, CMCSA
•    Cuts TSO, CDW, I, IM, WMT
•    No longer shows MU, GM, NCR, KSU

LANSDOWNE PARTNERS

•    Reports new stakes in XLE, AAPL, HDB, SEMI, BAC
•    Boosts LB, AMZN, NKE, CMCSA, V
•    Cuts JPM, WFC, NEE, LEAF, CRM
•    No longer shows NFLX, VXX, ETN, UTX, AES

LONE PINE CAPITAL

•    Reports new stakes in AMZN, STZ, DLTR, MBLY, ATVI
•    Boosts EA, SCHW, CHTR, HDB, HZNP
•    Cuts ILMN, RLGY, ADBE, SBAC, MA
•    No longer shows LOW, HCA, MHFI, ADSK, SUNE

MARCATO CAPITAL

•    Reports new stakes in URI, MDCA
•    Boosts BK
•    Cuts MIC, LEA
•    No longer shows PKG

MAVERICK CAPITAL

•    Reports new stakes in PFE, ARRS, PF
•    Boosts LBYTK, CIT, GOOD, ST, BUD, ARMK
•    Cuts PCLN, AGN, AVGO, RDN, ADBE
•    No longer shows BIDU, CHTR

MILLENNIUM MANAGEMENT

•    Reports new stakes in BP, BUD, CPT, BRCD, APA
•    Boosts DOW, CMCSA, SLB, ES, GOOG
•    Cuts ALXN, SRE, BIIB, VRX, BK, MNK
•    No longer shows PEP, DHR, VTR, ADSK

MOORE CAPITAL

•    Reports new stakes in JPM, FXI, ARMK, LOW
•    Boosts STZ, COP, CVS, MDLZ
•    Cuts AMP, BAC, FB, AMZN
•    No longer shows ENDP, BIDU, JD, AMT, VC

OMEGA ADVISORS

•    Reports new stakes in PFE, VRX, WBA, GLBL, CI
•    Boosts GOOGL, FB, DAL, RLGY, ASH
•    Cuts SUNE, SHPG, C, KAR, LYB
•    No longer shows MCK, FOXA, GM, QEP, GLPI

PASSPORT CAPITAL

•    Reports new stakes GOOD, SRE, BKD, NYLD
•    Boosts DLTR, FB, DAL, AU, CF
•    Cuts LBTYK, NRG, MRD, VIPS
•    No longer shows RAD, AGN, SPLK, WMB

PAULSON & CO.

•    Reports new stakes in PRGO, CIT, PCP, CAM, ALTR
•    Boosts TEVA, POST, HOT, LIVN, SGYP
•    Cuts VRX, SHPG, WLL, CSC, OAS
•    No longer shows HMHC, BRCM, S, GULTU

PERRY CORP.

•    Reports new stakes in AER, ETE
•    Boosts PRGO, ZTS, TWX, AIG, CBS
•    Cuts WMB, THRX, DPM
•    No longer shows LNG, ODP

POINT72 ASSET

•    Reports new stakes in LLY, KHC, AXL, ZSPH
•    Boosts LULU, MSFT, SBUX
•    Cuts EOG, DG, OKE, APC
•    No longer shows TWX, PWR, ABBV, QEP

POINTSTATE CAPITAL

•    Reports new stakes in TCO, BXLT, MSFT, WMT, ENDP
•    Boosts GOOGL, LUV, VRTX, MW, SBAC
•    Cuts LYB, ABBV, LNG, TEVA, MCD
•    No longer shows TRP, DOW, PPG, C, WLL

RELATIONAL INVESTORS

•    Reports new stakes in FLOW
•    Boosts SPY, MDY
•    Cuts HOLX, PMCS, MDLZ, SPXC
•    No longer shows ESL, MHRC

SACHEM HEAD

•    Reports new stakes in FIS, CHTR, KSU, TWC
•    Boosts AGN, PTC, APD, FOXA, ZTS
•    Cuts CDK

SANDELL ASSET

•    Reports new stakes in QCOM, AVOL, SLH, ALLY, CVC
•    Boosts ALTR, SUNE, YHOO
•    Cuts BKD, SIAL, PRE, BOBE, BRCM
•    No longer shows CIT, MTOR, CSC, LQ, VER

SOROS FUND MGMT

•    Reports new stakes in PYPL, CIT, SLB, KHC, AMZN
•    Boosts AGN, EBAY, LGF, EGN, LUV
•    Cuts LYB, YPF, TWC, DOW, MON
•    No longer shows HLF, LEN, DHI, UAL, NICE

STARBOARD VALUE

•    Reports new stakes in WRK, MDAS, MEG, GIS
•    Boosts YHOO, CW, ACM, AGN
•    Cuts TSRA, ISSI
•    No longer shows SPLS, BABA, BWXT, EPC, BDBD

THIRD POINT

•    Reports new stakes in KHC, TWC, AVGO, DHR
•    Boosts YUM, TAP, EBAY, SEE
•    Cuts XON, MHK, BUD, IACI, NXPI
•    No longer shows SUNE, PSX, ALLY, DVN, AIG

TIGER GLOBAL MGMT

•    Reports new stakes in BUD, TWC, EROS, ANET
•    Boosts AMZN, FLT, VIPS
•    Cuts JD, MA, KATE, VDSI, TDG
•    No longer shows PCLN, WUBA, TRIP

TRIAN FUND

•    Reports new stakes in CC
•    Boosts GE, PNR, MDLZ, DD
•    Cuts IR, WEN

TUDOR INVESTMENT

•    Reports new stakes in PCP, MRKT, CYT, IYR, PCLN
•    Boosts SYA, CAM, TRU, NCR, PCTY
•    Cuts DRI, AXP, DHR, TEVA, BCR
•    No longer shows HYG, LQD, MNK, CP, BSX

VALUEACT:

•    Reports new stakes in TW
•    Boosts AXP, FOX
•    Cuts HAL

VIKING GLOBAL

•    Reports new stakes in BRCM, LH, TEVA, NFLX, HLT
•    Boosts AMZN, ANTM, MCK, AVGO, ALL
•    Cuts ILMN, MHK, MNK, BABA, MA
•    No longer shows MET, CI, FOXA, BIDU, BIIB

• Fed Poised to Mark the End of an Era (Hilsenrath)
• Fed opens meeting to put an end to crisis era policy (Reuters)
• Fed's Historic Liftoff and Everything After: Decision Day Guide (BBG)
• Emerging Markets Gird for Fed Rate Increase (WSJ)
• What 7 Years at Zero Rates Have Looked Like (BBG)
• 5 Things to Watch at the Fed Meeting (WSJ)
• Tokyo Trader to Work at 4 a.m. Ahead of Fed as Bond Tumult Rises (BBG)
• Donald Trump Survives Another Debate as Republican Rivals Take Aim at Party Front-Runner (BBG)
• Russia says serious differences remain with U.S. over Syria crisis (Reuters)
• Valeant Pharmaceuticals Slashes Revenue, Earnings Guidance (WSJ)
• Third Avenue Bled Managers, Billions of Assets Before Fund Shut (BBG)
• Iran's October missile test violated U.N. ban (Reuters)
• China Has Something to Tell OPEC: Oil Prices Have Fallen Too Far (BBG)
• Swiss Bank Hid Assets for Jews in Wartime, Then for Tax Evaders (BBG)
• U.S. to charge Venezuela's National Guard chief with drug trafficking (Reuters)

Overnight Media Digest

WSJ

- Congressional leaders reached a major spending and tax deal Tuesday, House Speaker Paul Ryan told Republicans, according to lawmakers and aides. The apparent agreement, which hasn't been announced by Democrats, was reached after weeks of negotiations over both the $1.15 trillion spending bill for fiscal year 2016 and legislation that would revive and extend dozens of lapsed and expiring tax breaks. (http://on.wsj.com/1TP3I9A)

- Federal prosecutors in Brooklyn are preparing to charge high-ranking Venezuelan officials with trafficking cocaine to the U.S., a person familiar with the case said Tuesday. (http://on.wsj.com/1NoIduP)

- European Union officials reached agreement Tuesday on a pan-European digital-privacy law, creating a strict new legal framework that will have ripple effects globally on how companies can use individuals' personal information. (http://on.wsj.com/1RQgVR4)

- Qualcomm Inc ruled out splitting itself up despite pressure for change from an activist investor and scrutiny of the semiconductor company's business by antitrust authorities. (http://on.wsj.com/1MeQ760)

- Commodities trader Noble Group Ltd is in advanced talks with Chinese state-backed grain trader Cofco to sell its remaining stake in its agricultural unit, according to a person familiar with the matter. (http://on.wsj.com/1QoonE0)

FT

Halliburton Co and Baker Hughes Inc said the U.S. Deaprtment of Justice was not satisfied with the concessions they offered to win approval for their proposed merger and would have to delay for the second time their $26 billion union.

Qualcomm Inc has decided not to split into separate chipmaking and technology licensing businesses, saying that its current structure is the best way to run the business. The decision marks a conclusion to a six-month strategic review instigated by hedge fund Jana Partners.

The chief executive of Rolls-Royce Holdings has decided to scrap the aerospace and land and sea divisions as part of a major overhaul. The revamp would also lead to the departure of Tony Wood, a longtime Rolls Royce veteran and head of its aerospace division.

Tesla Motors is building a mile-(km)-long factory near the Nevada desert, which will build batteries for its electric cars. However, the carmaker has not announced the supplier for lithium, the material used in batteries, leaving unclear the source of the lightweight natural material that it needs to begin production by 2017.

NYT

- House Speaker Paul Ryan told the Republican Party's rank and file on Tuesday night that a deal had been reached on a $1.1 trillion spending measure, but Democrats said negotiations on the bill had not been finished. (http://nyti.ms/1MgfyUL)

- Valeant Pharmaceuticals International and Walgreens Boot Alliance have agreed to distribute Valeant's drugs through Walgreens stores in a new way, and in some cases, for lower prices, the companies announced on Tuesday. (http://nyti.ms/1YfvSBo)

- European officials approved long-awaited data protection regulations on Tuesday, the latest effort in the region to give people a greater say over how their digital information is collected and managed. The changes, expected to go into effect by early 2017, would put into law across the 28-member European Union some policies now enforced after court rulings or in specific countries only. (http://nyti.ms/1Ovtzj1)

- On Tuesday, Sirius XM announced that it had renewed its contract with Howard Stern, extending his show for five years and ending speculation on Wall Street about whether Stern would abandon satellite radio for some other new media frontier. (http://nyti.ms/1JaZwLQ)

- Global Payments Inc said on Tuesday that it planned to buy Heartland Payment Systems, a fellow payment processor focused on small to midsize businesses, for about $4.3 billion in cash and stock. (http://nyti.ms/1Zb9B4z)

Canada

THE GLOBE AND MAIL

** Suncor Energy Inc urged Canadian Oil Sands Ltd shareholders to accept a C$4.3 billion hostile takeover as crude prices slump, saying there is little evidence that a rival bid is in the works. (http://bit.ly/1I8ri0v)

** Bank of Canada Governor Stephen Poloz insisted that the Canadian economic recovery remains on the track outlined by the central bank, despite the latest in a series of disappointing growth indicators. (http://bit.ly/1ITP3JM)

NATIONAL POST

** Canadian billionaire investor Seymour Schulich, who initially called Suncor's C$4.5 billion offer for Canadian Oil Sands "ridiculous," said he and potentially others in his group of six major investors would be willing to support the deal if Suncor gave them an option to buy more Suncor shares should oil prices rise in the future. (http://bit.ly/1QrQ4eT)

** Faced with scrutiny over its practice of raising drug prices, on Tuesday, Valeant Pharmaceuticals International Inc said it was entering a 20-year agreement with Walgreens Boots Alliance Inc, to reduce wholesale prices by 10 percent for all dermatological and ophthalmological products and sell certain branded drugs at generic prices with an average discount of more than 50 percent. (http://bit.ly/1QrQ9ip)

** The Bank of Canada is piling on more concerns over the country's housing market, warning that rising household debt and regional price imbalances could lead to an "adverse shock" to the sector. (http://bit.ly/1ZbA7ed)

Britain

The Times

The average cost of a home in England has hit the significant 300,000 stg mark for the first time ever. New figures from the Office for National Statistics (ONS), whose data is based on prices paid, showed that house prices jumped 7.4 per cent in the year to October to reach a new high of 300,000 stg. (http://thetim.es/1T0m8nS)

Britain edged out of deflation and back into positive territory for the first time in four months in November, but of the Bank of England will be under no pressure to raise interest rates as prices are forecast to remain low for some time. The official consumer prices index climbed from -0.1 per cent in October to 0.1 per cent in November, according to the Office for National Statistics (ONS). (http://thetim.es/1O41oXU)

The Guardian

Asda's share of the grocery market has hit a nine-year low as the pace of supermarket discounting stepped up ahead of Christmas. (http://bit.ly/1lNye9m)

Britain's Labour and Liberal Democrat peers have narrowly failed to overturn government proposals to push through banking regulations they claim will make it easier for senior bankers to escape prosecution following a financial crash. (http://bit.ly/1QnjYBa)

The Telegraph

The new chairman of troubled Network Rail has insisted his plan to offload 1.8 billion stg of depots, arches and station shops is not a "fire sale" by the state-owned company. (http://bit.ly/1QreaWS)

Domino's Pizza Group PLC Pizza has formed a joint venture with its namesake in Australia to buy the largest pizza delivery business in Germany, Joey's Pizza, for up to 79 million euros, in a bid to turn around its fortunes in the European country. (http://bit.ly/1m5oGGv)

Sky News

Starbucks Corp paid less corporation tax in the UK this year - in a period when its profits rose to a record level. (http://bit.ly/1O427Zk)

Shareholders in Aston Martin have expressed reservations about a putative tie-up with the Force India team. Aston Martin's board meeting last week concluded with directors leaning towards a decision not to re-enter F1 for the first time since 1960. (http://bit.ly/1QmQtPM)

The Independent

Brent crude oil was cents away from crisis levels overnight after slipping below $37 a barrel. (http://ind.pn/1TMExVm)

Yesterday was the last day for hedge funds to submit their Q4 13-F filings, and the biggest reactions this morning can be found in the stock of Kinder Morgan which rises 9% pre-mkt after Berkshire reported a new stake. Autodesk also gained 2% post-mkt yday after Lone Pine took a new position. Several funds boosted or reported new stakes in JD.com while Jana Partners reported a new stake in Valeant. Both Icahn and Einhorn trimmed their AAPL holdings.

Below is a summary courtesy of Bloomberg of 4Q equity holdings from Dec. 31 13-F filings by the most prominent hedge funds, with some of the new, added, cut and exited positions for each; some stakes may have previously been reported in separate filings.

ADAGE CAPITAL

• Reports new stakes in SYF, IR, MMM, KLAC, FE
• Boosts DOW, MSFT, HON, CVX, DAL
• Cuts GE, PEP, UTX, MPWR, AXP
• No longer shows D, RCII, ABY, RLGY, UGI

APPALOOSA MANAGEMENT

• Reports new stakes ETP, KMI, ABY, PFE
• Boosts GOOG, ALL, LUV, DAL, WHR
• Cuts NXPI, GT, EXP, AAPL, EMN
• No longer shows JBLU, TEX, USG, KBR, AXLL

BAUPOST GROUP

• Reports new stakes in EMC
• Boosts AR, PYPL, RUN, KLXI, BITI
• Cuts FTR, KOS, NG
• No longer shows AA, PXD, EBAY, AER, LOCK

BERKSHIRE HATHAWAY

• Reports new stakes in KMI
• Boosts WFC, DE, AXTA
• Cuts T, WBC
• No longer shows CBI

BLUEMOUNTAIN

• Reports new stakes in SLH, WTW, CLACU, CDE, TROX
• Boosts NWSA, TERP, MGLN
• Cuts VRX, TWC, TSO, EURN, CLNY
• No longer shows BIIB, PXD, AXP, AYA

BRIDGEWATER ASSOCIATES

• Reports new stakes in HFC, AKAM, INTU, BRK/B, ADBE
• Boosts VMW, M, MAR, BCE, ADI
• Cuts SYMC, KO, RL, EMN, CTL
• No longer shows GOOGL, MON, AMAT, WFM, FDX

COATUE MANAGEMENT

• Reports new stakes in VRX, GPRO, FIT, ETE, WMB
• Boosts GOOG, MSFT, ATVI, JD, NFLX, EQIX, W
• Cuts AVGO, EXPE, AKAM, AGN, HAIN, DDD, SSYS
• No longer shows KHC, WBA, Z, ADSK, VIPS

CORVEX MANAGEMENT

• Reports new stakes in GOOG, BAC, COMM, CMA, P
• Boosts PFE, SIG, YUM
• Cuts BEAV, AGN, TWX, PAH, FNF
• No longer shows AET, TAP, APC, BUD, PRGO

DUQUESNE FAMILY OFFICE

• Reports new stakes in RTN, NOC, GOOGL, PSTG, SYF
• Boosts AMZN
• Cuts FB, HDB, MSFT, CTRP
• No longer shows WFC, WDAY, JD, ILMN, UA

ELLIOTT MANAGEMENT

• Reports new stakes in CAB, CNP, XLE, RRTS
• Boosts AGN, EMC, CTXS, VMW, PLCM
• Cuts PRGO, FCB, CCL, FBIO
• No longer shows CMCSA, FOX, APC, JNPR, SQM

EMINENCE CAPITAL

• Reports new stakes in HOT, LQ, CAA, CCE, BERY
• Boosts ADSK, GMCR, YHOO, YUM
• Cuts PRT, GNC, FOSL, G, LNKD
• No longer shows KORS, AIG, CTRP, CSOD, MCD

ETON PARK CAPITAL

• Reports new stakes in EMC, AGN, TWC, GMCR, ADSK
• Boosts CRTO
• Cuts PRGO, ODP, ADBE, AER, CI
• No longer shows WMB, BEAV, GOOG, SNN

FAIRHOLME CAPITAL

• Boosts LE, DNOW, MRC, SRG
• Cuts BAC, CNQ, LUK, IBM, AIG
• No longer shows C, NOV

GATES FOUNDATION

•    Cuts BRK/B
•    No longer shows BP

GLENVIEW CAPITAL MGMT

•    Reports new stakes in CSC, TWC
•    Boosts HCA, CI, HUM, FMC, MON
•    Cuts CDNS, PVH, CYH, TMO, WRK
•    No longer shows ENDP, AGN, TER, DG, A

GREENLIGHT CAPITAL

•    Reports new stakes in M, AGR, MYL, AGN, DSW
•    Boosts TWX, KORS, IAC, AER, FOXA
•    Cuts AAPL, CBI, ON, ACM, SEMI
•    No longer shows MU, BK, SC, AMAT, KS

HIGHFIELDS CAPITAL MGMT

•    Reports new stakes in YHOO, AGN, KSU, BK, DIA
•    Boosts DD, MCD, ABBV, HOT, TRIP
•    Cuts BEN, CBS, IRM, MHFI
•    No longer shows APD, IBM, LLY, PG, QCOM

ICAHN ASSOCIATES

•    Boosts HTZ, LNG, FCX
•    Cuts AAPL, TGNA, GCI

ICONIQ CAPITAL

•    Reports new stakes in VXUS, QQQ, CVX
•    Boosts GLD, IWB, JD, VTI, XLE
•    Cuts IAU, PARR, VNQ, LLNW, TSLA
•    No longer shows XES, XOP, GDX, BP, RDS/A

JANA PARTNERS

•    Reports new stakes in PFE, AIG, VRX, CSRA
•    Boosts MSFT
•    Cuts QCOM, BAX, AGN, CSC, TWX
•    No longer shows HTZ, BKD, MAT, ZTS
•    NOTE: Jan. 27, Jana Is Short Royal Mail, Dixons Carphone, InterContinental

LAKEWOOD CAPITAL

•    Reports new stakes in QRVO, AMLP
•    Boosts AGN, CFG, WRK, HCA, TWC
•    Cuts CDW, JBLU, IM, SPR
•    No longer shows BABA, BLL, AAL
•    NOTE: Feb. 8, Bozza’s Lakewood Capital Shorting Adeptus, Dycom, Dean: ValueWalk

LANSDOWNE PARTNERS

•    Reports new stakes in RACE, CLVS, LIVN, SYF, MTCH
•    Boosts GOOGL, AAPL, V, AMZN, JPM
•    Cuts GS, WFC, DIS, NKE, FIT
•    No longer shows XLE, KW, IAC, SEMI

LONE PINE CAPITAL

•    Reports new stakes in NOC, ADSK, LULU, GOOGL, GOOG
•    Boosts DLTR, AMZN, MSFT, V, STZ
•    Cuts VRX, CHTR, JD, PCLN, MA
•    No longer shows AGN, DVA, SCHW, SBAC, MBLY

MARCATO CAPITAL

•    Reports new stakes in M, TPHS, HZN, BLDR
•    Boosts CBPX, VRTS
•    Cuts GT, BID, MDCA
•    No longer shows NCR, MIC, LEA, SGMS, JMG

MAVERICK CAPITAL

•    Reports new stakes in NWL, CHTR, UNH, HDS, KHC
•    Boosts ARRS, PFE, ADBE, WCN, YELP, PACB, KSU, SABR
•    Cuts AER, GOOG, BUD, PCLN, ARMK
•    No longer shows VRX, MTG, TMH, TWX, SYMC

MELVIN CAPITAL

•    Reports new stakes in DLTR, SIG, NKE, BABA, LVS
•    Boosts JD, DPZ, FB, ADBE, CTRP
•    Cuts AMZN, KR, LULU, EXPE, SWK
•    No longer shows EL, CASY, VFC, YUM, TJX

MILLENNIUM MANAGEMENT

•    Reports new stakes in SYF, ITC, AGR, PEP, GMCR
•    Boosts MRK, KEY, AAPL, NEE, PNW
•    Cuts DOW, CMCSA, AMZN, SLB, AEE
•    No longer shows ILMN, WFC, RDC, APA, SKX

MOORE CAPITAL

•    Reports new stakes in CTRP, XOP, MSFT, RH, ICE
•    Boosts BAC, C, BABA, AMZN, FB
•    Cuts JPM, MGM, NRF, NSAM, TCO
•    No longer shows FXI, EAGLU, PACEU, GRSHU, BLVDU

OMEGA ADVISORS

•    Reports new stakes in FDC, EEM, MSFT, SYF, AET
•    Boosts AIG, NAVI, WBA, ASPS, LORL
•    Cuts PFE, TWX, TRGP, MSI, GPOR
•    No longer shows PCLN, VRX, SUNE, CI, LYB
•    NOTE: Nov. 16, Omega Sold Entire Valeant Stake, Reuters Says

PASSPORT CAPITAL

•    Reports new stakes in GE, SYT, MCD, LLY, RTN
•    Boosts MSFT, NKE, BMY, SBUX
•    Cuts DLTR, SRE, DAL, PFE
•    No longer shows SCTY, VIPS, NRG, RICE

PAULSON & CO.

•    Reports new stakes in LRCX, AKRX, PFE, BIIB, ABBV
•    Boosts MYL, TEVA, MNK, LIVN, VRX
•    Cuts GLD, TWC, HOT, AGN, TMUS
•    No longer shows HCA, CAM, MGM, WWAV

PERRY CORP.

•    Reports new stakes in HCA, SE, CPGX
•    Boosts TWX, AER, UAM
•    Cuts AIG, WMB, CYH, ETE, BLL
•    No longer shows ZTS, PRGO, CBS, INVA, DPM

POINT72 ASSET

•    Reports new stakes in AAP, GLW, CSRA, AMAT, PBF
•    Boosts NKE, SIG, MCD, DLTR, WHR
•    Cuts AMZN, LULU, MSFT, SBUX, PXD
•    No longer shows CMCSA, TMUS, JWN, FTR, XLU

POINTSTATE CAPITAL

•    Reports new stakes in AGN, HUM, HYG, JD, DOW
•    Boosts TEVA, TWC, CLVS, LNG, CFG
•    Cuts GOOGL, AYA, PXD, LYB, MDCO
•    No longer shows TCO, VRTX, TLRD, WBA, AET

SACHEM HEAD

•    Reports new stakes in ADSK, MYL
•    Boosts AGN, AKRX, TWC, FIS
•    Cuts CDK, PTC, ZTS
•    No longer shows APD, FOXA

SANDELL ASSET

•    Reports new stakes in ARG, YOKU, FCE/A, ABG, CIT
•    Boosts CVC, TVPT
•    Cuts BOBE, VSLR, SLH, VIAV, ALLY
•    No longer shows BKD, QCOM, WIN, DK, SUNE

SOROS FUND MGMT

•    Reports new stakes in SYF, HYG, CPGX, MPC, GOOGL
•    Boosts LVLT, EQT, LYB, MCD, DAL
•    Cuts YPF, AGN, FB, CIT, TWC
•    No longer shows VIPS, NEE, SLB, NRG, LUV

STARBOARD VALUE

•    Reports new stakes in NYRT, CI, LNCE
•    Boosts BAX, MEG, M
•    Cuts ODP, WRK, CW, ACM
•    No longer shows GIS, LXU, TSRA, AGN, MSGN

TEMASEK

•    Reports new stakes in SYF, JD, TOUR, MON, REGN
•    Boosts GILD, BMRN
•    Cuts Q, BABA
•    No longer shows HXL

TIGER GLOBAL

•    Reports new stakes in AAPL, PCLN, QSR, SQ
•    Boosts VIPS, JD, CHTR, TWC, SPLK
•    Cuts ATHM, ETSY, VDSI, BABA, MA
•    No longer shows KATE, EROS, IBM, HDP

THIRD POINT

•    Reports new stakes in CB, MS, AXTA
•    Boosts DOW, SJM, TWC
•    Cuts YUM, KHC, EBAY, CWEI, STZ
•    No longer shows TMUS, NXPI, IAC, XON

TRIAN FUND

•    Boosts MDLZ, PNR
•    Cuts DD, GE
•    No longer shows IR, CC

TUDOR INVESTMENT

•    Reports new stakes in CSRA, HPY, LH, KING, EEM
•    Boosts ULTI, ADP, CSC, EFX, IYR
•    Cuts NCR, WDAY, FB, SPLK, PCLN
•    No longer shows MRKT, SINA, GE, PG, ADS

VALUEACT

•    Cuts HAL
•    No longer shows AXP

VIKING GLOBAL
•    Reports new stakes in PCLN, CMG, ENDP, PFE, BIIB
•    Boosts TEVA, NFLX, PXD, QUNR, AVGO
•    Cuts WBA, MA, LYB, KSU, AET
•    No longer shows SEE, MHK, HLT, HOT, ILMN

WILLIAM STIRITZ

•    Cuts HLF

Moments ago, the 2016 edition of the Sohn Investment Conference started, a feeding frenzy for traders and hedge fund managers such as Gundlach, Einhorn and Chanos who descend on this popular annual "round table" to pitch their best and worst ideas. As always, the moment a company's name is mentioned in a bullish or bearish context, its stock is sure to surge or slump, as the headline-hungry algos immediate pounce in the current reactionary market environment. But is following the advice of these hedge fund gurus such a good idea? 

According to a Bloomberg analysis, out of all speakers in last year's, 2015 Sohn Conference, only two had winning bets: this suggests - at least on the surface - that the winning trade is doing the opposite of what is recommended; however that is never the case and instead more clustering and "hedge fund hoteling" ensues, leading to violent blowups a la Valeant and Allergan, also leading to questions why hedge funds are "suddenly" a dying breed.

So for those interests, here is a brief summary of how last year's picks did, courtesy of Bloomberg.

David Einhorn of Greenlight Capital:

Einhorn's Sohn picks are fairing quite well, even if some of his other trades like going long SunEdison, Inc. are getting slammed. At the conference he took a shot at the fracking industry, hitting their high cash burn even as oil prices continued to decline. His main target was Pioneer Natural Resources Co., which is trading about 2 percent lower since he made his bearish call. “A business that burns cash and doesn’t grow isn’t worth anything,” he said at the time. Unfortunately for Einhorn, while Pioneer has fallen, he should have made one of his other bearish bets his main call. The others are down between 6 and 70 percent. Einhorn was also bearish on Concho Resources Inc. (down 9 percent), EOG Resources, Inc. (down 18 percent), Continental Resources Inc. (down 29 percent), and Whiting Petroleum Corp. (down 70 percent).

Barry Rosenstein of Jana Partners:

Rosenstein's picks haven't turned out quite the way he might have hoped. The activist investor told last year's attendees that Qualcomm Inc. was extremely undervalued. Shares have since lost another 27 percent of their value. He also reiterated his bullish stance on Walgreens Boots Alliance Inc., which has fared slightly better but is still down about six percent since his call.

Keith Meister of Corvex:

It's hard to tell if Meister should be in the winner or loser category. His pitch was a bullish call on Yum! Brands Inc, because he believed the firm should spin off its China business. While the company did indeed go ahead with the sale, shares are still lower since he made the call.

Leon Cooperman:

Leon Cooperman’s made a number of picks, with a few of them performing quite well like Alphabet Inc. (up 29 percent), The Dow Chemical Company (up 2 percent), and The Priceline Group Inc. (up 6 percent). Others have struggled with one name down 90 percent. The losing picks include AerCap Holdings NV (down 18 percent), Citigroup Inc. (down 15 percent), General Motors Co. (down 10 percent), a natural gas play in Gulf Coast Ultra Deep Royalty Trust (down 90 percent).

Larry Robbins, of Glenview:

Robbins has made a number of winning calls in years past, with a bearish bet on General Motors Co. before it went bankrupt and going long hospital stocks prior to Obamacare. Last year wasn't one of his best as he suggested buying AbbVie Inc. and Brookdale Senior Living Inc., which are down 6 and 50 percent respectively.

Mala Gaonkar, co-portfolio manager at Lone Pine Capital LLC:

Gaonkar's pick was doing quite well until it reported earnings last week. Microsoft Corp. ended up tumbling about seven percent after reporting quarterly results and took her winnings down to four percent.

Jeffrey Gundlach of DoubleLine Capital:

Gundlach had a slightly less conventional idea: buy Puerto Rican bonds. Attendees weren't too surprised by his pick given that Bloomberg reported his fund's stake in junk-rated Puerto Rican debt just a couple of weeks before his speech. His pick hasn't done as bad as you might expect given the turmoil that has continued to plague the region since his call. The S&P Municipal Bond Puerto Rico Index is down about five percent.

Bill Ackman of Pershing Square Capital Management LP:

One of Ackman's picks is performing quite well, but the other has been grabbing headlines for all of the wrong reasons. Jarden Corp. is up 15 percent since last May, but his bullish bet on Valeant Pharmaceuticals International Inc. has been demolished. The stock is now down 84 percent.

Source

While far less attention is being paid to hedge fund 13F filings, which show a stale representation of equity long stakes among the hedge fund community as of 45 days prior, than in years gone by as a result of increasingly poor performance by the 2 and 20 crowd, they still remain closely watched source of investment ideas but mostly to find out what the new cluster ideas and hedge fund hotel stocks are at any given moment so they can be faded.

Courtesy of a Bloombert compilation, here are some highlights from the latest round of 13F filings.

Valeant.

 What used to be one of the industry’s most popular holdings has fallen out of favor with just about every major hedge fund holder save Pershing Square Capital Management’s William Ackman. Brahman Capital, which had invested in Valeant for at least 2010, exited the 8.12 million shares it held at the end of 2015 during the first quarter. The New York firm was joined by a who’s who of hedge fund giants: Andreas Halvorsen’s Viking Global Investors, Stephen Mandel’s Lone Pine Capital, Philippe Laffont’s Coatue Management and Barry Rosenstein’s Jana Partners all sold off the former high-flier, which has plunged about 90 percent from its peak last August.

Allergan

The merger-arb blow up of the year has claimed its set of scalps, however the company's failed acquisition by Pfizer took place after the end of Q1, which is why all those who loaded up in the first quarter are now nursing big losses on their failed M&A bets. Among them are Lone Pine and Seth Klarman’s Baupost Group who bought into Allergan Plc during the first quarter, establishing stakes shortly before Pfizer Inc. decided in April to terminate a $160 billion deal to combine with the Dublin-domiciled company as the U.S. cracks down on corporate inversions. Pentwater Capital Management, Arrowgrass Capital Partners and Eton Park Capital Management also took new stakes or increased their Allergan holdings. The stock has fallen 28 percent this year.

Cutting back equity exposure

As noted earlier, the value of Soros Fund Management’s publicly disclosed holdings dropped by 25% to $4.5 billion as of the end of the first quarter. He was not alone in rapidly derisking his portfolio. At Glenview Capital Management, the hedge fund run by Larry Robbins, investments in U.S.-listed stocks declined by 22 percent. At Louis Bacon’s Moore Capital Management, the value of the holdings fell by about 29 percent.

Gold

Gold is gaining popularity among prominent investors. Soros established a $264 million position in Barrick Gold Corp., acquiring a 1.7 percent stake in the world’s biggest bullion producer that was the fund’s biggest equity position. Soros also disclosed owning bullish options on 1.05 million shares in the SPDR Gold Trust, an exchange-traded fund tracking the price of bullion. Other major investors also sought safety in the yellow metal. Eton Park purchased 3.6 million shares in the same gold ETF, a $422 million position. Bessemer Group bought 546,000 shares valued at $64.3 million.

As has become the norm, John Paulson once again went the other way and cut his holdings in the gold ETF. Paulson & Co. owned 4.8 million shares of ETF at the end of the first quarter, compared with 5.8 million as of Dec. 31. Instead he bought over $50 million worth of Office Depot stock which suffered a spectacular collapse after its merger with Staples was also terminated shortly after.

* * *

Here are the rest of the notable highlights among the marquee hedge fund names.

ADAGE CAPITAL

• New stakes in GCP, CHTR, FOXA, ROK, X
• Boosts RTN, DD, GE, DAL, VZ, AGN
• Cuts SYF, PFE, CFG, BA, TYC, BAC
• No longer shows MHK, VC, SUNEQ, SFG, SO, EBAY

APPALOOSA MANAGEMENT

• New stakes in FB, SYF, MHK, BAC, FOXA, VRX, GLBL
• Boosts ETP, WPZ, CYH, AMLP, NXPI, DAL, GOOG, AGN, PFE, TERP
• Cuts GM, KMI, HCA, GT, URI
• No longer shows PCLN, AAPL, HPE, CBI, EMN

BAUPOST GROUP

• Reports new stakes in AGN, VMW, SRAQU, LQ, GNW
• Boosts EMC, AR, FOXA, OLN, LNG, FOX
• Cuts PYPL, PBF, BXE, NG
• No longer shows FTR, OCN, KOS, MU, SN

BERKSHIRE HATHAWAY

• New stake in AAPL
• Boosts PSX, IBM, CHTR, LBTYA, DE, V, BK
• Cuts PG, MA, WBC, WMT
• No longer shows T

BLUE HARBOUR

• New stakes in FFIV, LM
• Boosts AVT, AGCO, VRNT, XLNX, RAX
• Cuts INXN, CHS, BIN, BW
• No longer shows AKAM, GWR

BLUEMOUNTAIN

• New stakes in MBLY, AIG, IBKR, XLY, TV, ENDP
• Boosts IMS, POST, AVGO, JCI, BBY, TSO, HLF
• Cuts PFE, NUVA, IAC, EURN, GNRT, TARO, VRNT
• No longer shows TEVA, BRCM, SLH, BAC, VRX, WTW, MET

BRIDGEWATER ASSOCIATES

• New stakes in EWZ, DIS, MCD, POT, DISH, MDLZ, GOOG
• Boosts VWO, EEM, INTC, ESRX, RL
• Cuts AAPL, PEP, SPY, EXC, ORCL, M
• No longer shows BCE, VIAB, FOSL, TU, KO, JNJ

COATUE MANAGEMENT

• New stakes in PYPL, SPLK, FFIV, CMG, HTZ, SQ
• Boosts EA, AVGO, AKAM, LCI, LBTYA, GOOGL
• Cuts GOOG, NFLX, MSFT, HAIN, EXPE, CHTR, AMZN, GPRO, FB
• No longer shows AAPL, AGN, TWX, CBS, VRX, LNKD, IBM

CORVEX MANAGEMENT

• New stakes in NOMD, TMH, VRX, GLPI
• Boosts PFE, PAH, SIG, COMM, P, BLL, FNF
• Cuts GOOGL, VER, AGN
• No longer shows BAC, AN, CMA, CFG, KMI, TWX

DUQUESNE FAMILY OFFICE

• New stakes in KO, PM, SO, DUK, PPL, PEP, CAT, VZ
• Boosts GOOGL, PSTG
• Cuts AMZN, MSFT, FB, HDB
• No longer shows RTN, CTRP, NOC, SYF, CMG

ELLIOTT MANAGEMENT

• New stakes in QLIK, PFE, PAH, EGN, NE, HLF
• Boosts HES, CNP, SYMC, CAB, AA, BXLT, AGN
• Cuts IPG, ODP, PRGO, RYAAY, FCB, TWC
• No longer shows XLE, VMW, HPE, XOP, STE, NBL, SHPG

EMINENCE CAPITAL

• New stakes in LEN, HUM, ZBRA, RL, ANTM
• Boosts CAA, AN, CCE, SPGI, LNKD
• Cuts TRIP, SJM, ZNGA, ADSK, FOSL
• No longer shows YUM, GOOG, HOT, ATVI, YELP, GNC

ETON PARK CAPITAL

• New stakes in BXLT, GLD, ITC, MHK, CDK, HOT
• Boosts TWC, AGN, EMC, CRTO, CI
• Cuts MSFT, ADBE, SHW, SBAC, ODP, JAH
• No longer shows ADSK, PRGO, AER, HUM, RAD

FAIRHOLME CAPITAL

• Boosts BAC, SRSC
• Cuts SHLD, LUK, SHLDW, JOE, LE
• No longer shows MRC, CNQ, BRK/A, BRK/B, AIG, IBM

GATES FOUNDATION

• Boosts TV, ECL, AN
• Cuts BRK/B

GLENVIEW CAPITAL MANAGEMENT

• New stakes in FIS, AAP, GPN
• Boosts HCA, TWC, GOOGL, HLS, LBTYK, ABBV
• Cuts MON, TMO, HUM, MCK, CI, DOW
• No longer shows PCLN, CYH, PVH, AMAT, UHS, AIG

GREENLIGHT CAPITAL

• New stakes in HTS, PVH, CYH, GSAT, LAMR
• Boosts AAPL, YHOO, M, AGNC, YELP, AER, FOXA
• Cuts IAC, AGR, TTWO, IM, TWX, KORS
• No longer shows CBI, OI, GRMN, ON, SGMS, MTCH

HIGHFIELDS CAPITAL MANAGEMENT

• New stakes in MAR, PEP, PFE, DIS, BXLT, CL, TWX, GS
• Boosts WBA, GOOG, WMB, GOOGL, ABBV, IAC, AER
• Cuts MCD, DD, ICE, APC, HOT, CBS, EBAY, YUM
• No longer shows MSFT, SPGI, PRGO, YHOO, SRE, PYPL, AGN

ICAHN ASSOCIATES

• New stakes in MFS
• Boosts XRX, AIG
• Cuts NUAN, PYPL
• No longer shows AAPL, HOLX, TGNA, MENT, PBY, GCI

ICONIQ CAPITAL

• New stakes in UNH, APO, BX, OAK, KKR, CG, SUNEQ
• Boosts GLD, IAU, VTI, IWB, SPY, FB
• Cuts PARR, BABA, VEA, VWO, ACWI, CVX
• No longer shows AMLP, PXD, TSLA, RIG, TOT

JANA PARTNERS

• New stakes in GOOG, SRCL, HDS, TDG, BAC
• Boosts PFE, SPY
• Cuts CAG, LGF, AGN, LVNTA, WBA, MSFT, TWC
• No longer shows QCOM, AIG, LBTYK, BAX, STRZA, TWX, VRX, WMB

KERRISDALE ADVISERS

• New stakes in BRO, EBAY, MENT, PYPL, SNPS
• Boosts CTSH, LXFT, YELP, ETSY, PRXL
• Cuts TARO, MCK, PCLN, MRKT, BGCP, TFM
• No longer shows KFY, BID, EPAM, WSM, RHI

LAKEWOOD CAPITAL

• New stakes in GS, COF
• Boosts CDK, HCA, BIDU, CMCSA, ORCL, MA
• Cuts WRK, ACAS, IM, GTS, TSE, FDX, TWC
• No longer shows TSO, UNP, NPO, SPR, JBLU, GME, NFLX

LANSDOWNE PARTNERS

• New stakes in FB, JCI, UNH, RAI, AGR, GLPI, KO
• Boosts WFC, GOOGL, AMZN, JPM, UTX, UPS, NKE, LNKD
• Cuts ACN, AAPL, LB, DIS, V, DAL, CMCSA, FIT, MTCH
• No longer shows GS, TMUS, C, SYF, ETFC, BAC, MS, SCTY

LONE PINE CAPITAL

• New stakes in AGN, BXLT, PYPL, MNST, YUM
• Boosts FB, GOOG, NOC, GOOGL, EQIX, ADBE, BUD, NKE
• Cuts ILMN, V, EA, AMZN, JD, MA, MSFT
• No longer shows WMB, VRX, WBA, ATVI, ADSK

LONG POND CAPITAL

• New stakes in HLT, CBG, CAA, LQ, CFG
• Boosts KEY, CLNY, TCO, H, SRC
• Cuts FCE/A, SRG, BPOP, FPO, SFR
• No longer shows HOT, LHO, ARPI, SBAC, AL, BYD

MARCATO CAPITAL

• New stakes in RLGY, SFR, LIND
• Boosts M, LBRDK, LBRDA, BLDR, VRTS
• Cuts GT, BID
• No longer shows LPLA, CAR, MDCA, TOWR, BLD

MAVERICK CAPITAL

• New stakes in LRCX, NOC, CMCSA, PCRX, USB, NVDA, VIAB
• Boosts PCLN, FB, AGN, ADBE, AVGO, BUD
• Cuts LBTYK, PF, CIT, PFE, ST, GOOG, ARMK
• No longer shows ARRS, SC, FLT, CHTR, ORI, AER, SNY

MELVIN CAPITAL

• New stakes in NFLX, HD, COST, KHC, MNST, WYNN
• Boosts EXPE, AMZN, LOW, V, MHK, FB, NKE
• Cuts LVS, JD, GIL, BABA, ORLY, HBI
• No longer shows MCD, RCL, ADS, GOOGL, BC, PCLN, LULU, SBUX

MILLENNIUM MANAGEMENT

• New stakes in COP, MRO, CMS, ZBH, PG, RCL, DPZ
• Boosts APC, PEP, T, FIS, PCG, ADBE, YHOO
• Cuts OXY, PPL, NEE, LOW, HFC, TEVA, NBL, FB
• No longer shows WMT, AMZN, OII, GG, PSX

MOORE CAPITAL

• New stakes in EEM, FIS, XHB, FXI, BG, ATVI, HD
• Boosts GOOGL, AAPL, AME, MGM, DLTR, AIG
• Cuts FB, AMZN, CTRP, EQIX, RH, BABA
• No longer shows BAC, C, XOP, JPM, MCD, MSFT, MS, GS

OMEGA ADVISORS

• New stakes in UNH, PYPL, GILD, ETP, BLL, AAPL, EA
• Boosts MSFT, TRGP, SYF, TRCO, WBA
• Cuts GOOGL, AGN, AIG, DISH, AER, FB
• No longer shows C, JPM, EEM, PFE, GLBL, AMZN, HLT

PASSPORT CAPITAL

• New stakes in TSM, TAP, MRK, QVCA, PCLN, CHTR
• Boosts CMCSA, JNJ, YHOO, PFE, LMT, HDP, BABA
• Cuts NKE, GOOG, SBUX, MSFT, HD, KO, MCD
• No longer shows SYT, DAL, UNP, NFLX, LBTYK, LLY

PAULSON & CO

• New stakes in BEAV, ATVI, ACAS, ODP, ALXN, EXPE, BXLT, FB
• Boosts AKRX, ENDP, RDN, PFE, BIIB, ETSY, CVC
• Cuts TWC, HOT, AGN, TMUS, AIG, PRGO
• No longer shows OUT, PMC, ABBV, GMED, LH, PCLN

PERRY CORP.

• Boosts AER
• Cuts TWX, AIG, HCA, SE
• No longer shows WMB, CPGX, CYH, ETE, ETP

PERSHING SQUARE

• New stakes in NOMD
• Boosts QSR
• Cuts APD, MDLZ

POINT72 ASSET MANAGEMENT

• New stakes in NFLX, COP, MNST, YHOO, KORS
• Boosts LOW, FB, APC, NWL, VRX, TWX, AMZN
• Cuts NKE, AAP, SIG, GOOGL, COH, MCD, RL, MDVN, EA
• No longer shows AMAT, TYC, CELG, LULU, TJX, WTW

POINTSTATE CAPITAL

• New stakes in CELG, MDVN, EEM, HAL, COG
• Boosts CHTR, LYB, ABBV, AGN, MSFT
• Cuts TEVA, TWC, NOC
• No longer shows LUV, BAC, CFG, GD, JAZZ

SANDELL ASSET

• New stakes in HOT, BXLT, CAG, AFFX, FCS, CPGX
• Boosts YHOO, CAM, MEG, YOKU, CVC, CIT
• Cuts VIAV, TVPT, ARG, XLF, ALLY, BOBE
• No longer shows ETH, PMCS, FCE/A, ABG, SFG, VSLR

SOROS FUND MANAGEMENT

• New stakes in ABX, BXLT, CCI, AVGO, SLB, AET
• Boosts EQIX, GLPI, EMC, HOT, SPY
• Cuts SYF, CY, AGRO, AGN, LYB, PYPL, DISH, AMZN
• No longer shows LVLT, DOW, ENDP, DAL, MCD, BUD

STARBOARD VALUE

• New stakes in MRVL, DEPO, NXST
• Boosts YHOO, M, BAX, CW, WRK
• Cuts DRI, FCPT, QTM
• No longer shows MDAS, MEG, WPP, RLD, ODP, CI

TEMASEK

• New stakes in FIS, BGNE
• Boosts ILMN, REGN, JD, GILD
• Cuts MON

TIGER GLOBAL

• New stake in Z
• Boosts CHTR, EHIC, ETSY, XO
• Cuts AMZN, JD, AAPL, PCLN, DATA, QSR, FLT, MA, SQ
• No longer shows VIPS, TDG, RH, BUD, ATHM, TWC

THIRD POINT

• New stakes in GOOGL, BXLT, LOW, EMC, VMW, FOXA, WMB
• Boosts YUM, DHR, CB, BUD, STZ, KHC
• Cuts AMGN, AGN, SJM, ROP, DOW, MHK, TWC
• No longer shows LBTYK, EBAY, MS, AXTA, CWEI

TRIAN FUND

• Boosts SYY, PNR, DD, BK, MDLZ
• Cuts GE
• No longer shows PEP

TUDOR INVESTMENT

• New stakes in PEP, ITC, CL, MEG, CSCO
• Boosts FIS, MRK, SPY, WMT, ZBH
• Cuts FB, CSRA, EFX, CSC, TEVA, LLY, K, SJM
• No longer shows ULTI, IYR, EWJ, ADP, BABA, V

VALUEACT

• New stake in ADS
• Boosts WLTW, CBG
• Cuts ADBE, AGU, MSI, MSCI
• No longer shows HAL

VIKING GLOBAL

• New stakes in FB, LLY, JD, NWL, DVA, MET, TMUS
• Boosts COG, ECA, AVGO, GPOR, AMZN, AET, MA
• Cuts PXD, LYB, AGN, WBA, HUM, LNG, ANTM, CCI, PFE
• No longer shows VRX, MCK, PCLN, QUNR, BK, CMG, NKE, HAL

Source: BBG

With high-yield bond funds suffering the largest redemptions in their history, this week saw gold fund flows soar to their highest in 2016 as buyers took advantage of the lower prices following the same path as George Soros, Stan Druckenmiller, Jana Partners, and Canada's financial giant CI Financial.

Junk bonds saw the single-biggest daily redemptions in history this last week...

Today is the deadline for hedge funds to submit their Q2 13-F filings. Among the more notable changes was the previously reported 55% increase in Warren Buffett's Apple shares, offset by the cut in his Wal-Mart stake; Elliott's addition to stakes in security firms Qualys, Fortinet, CyberArk; ValueAct's new stakes in Morgan Stanley, Seagate; Tiger's exit of Netflix; Jana addition of Time Inc, and Soros' cut of his gold miner positions.

Below is a summary courtesy of Bloomberg of 2Q equity holdings from Jun 30 13-F filings by the most prominent hedge funds, with some of the new, added, cut and exited positions for each; some stakes may have previously been reported in separate filings.

• ADAGE CAPITAL
• New stakes in SLB, LNKD, LMT, LLL, SO
• Boosts AMZN, MON, MLM, WR, JNJ
• Cuts SYF, IR, AAPL, RTN, DAL
• No longer shows TGT, SABR, XYL, CW, ROK

APPALOOSA MANAGEMENT

• New stakes in WDC, USFD
• Boosts AGN, MHK, ALL, SYF, FOXA
• Cuts HCA, AMLP, ETP, LUV, KMI
• No longer shows DAL, FB, BAC, PFE, RRC

BALYASNY ASSET MANAGEMENT

• New stakes in UNP, OLN, TJX, WFT, LMT
• Boosts BABA, AAP, GOOGL, V, MRK
• Cuts CSX, MPC, NSC, STLD, FB
• No longer shows PCLN, NUE, KBR, SON, DHR

BAUPOST GROUP

• New stakes in C, LVNTA, CAR, BATRK, SRAQ
• Boosts EMC, TBPH, PRTK, AGN
• Cuts AR, PYPL, INVA, NG
• No longer shows SRAQU, LQ, BXE, GNW

BERKSHIRE HATHAWAY

• New stakes in LSXMK, LSXMA, LMCK, LMCA
• Boosts AAPL, LILA, LBTYA, LILAK, PSX
• Cuts WMT, SU, VRSN, DE, CHTR

BLUE HARBOUR

• New stakes in INOV
• Boosts XLNX, MDRX, GSM, AGCO
• Cuts BW, ISBC
• No longer shows WCN, VRNT, IWM, SPY, CHS

BLUEMOUNTAIN

• New stakes in AGN, WLTW, CFCOU, CI, UVXY
• Boosts SERV, JCI, MDVN, TPX, GLD
• Cuts FNF, VRNT, IMS, APD, HLF
• No longer shows TWC, TERP, HYG, SAFM, EURN

BRIDGEWATER ASSOCIATES

• New stakes in JNJ, PH, CVS, VFC, IVZ
• Boosts EWZ, ABX, LYB, GG, SPLS
• Cuts EEM, VWO, VMW, MSFT, DIS
• No longer shows MU, RL, T, QCOM, POT

BULLDOG

• New stakes in LGI, KHI, KMM
• Boosts STC, SZC, DCA
• Cuts LBF, EMG, SVVC, XRDC
• No longer shows CLDC, SOR, DDF, NXEO, WHLRW

COATUE MANAGEMENT

• New stakes in LBRDK, TREE, SYMC, LILAK, LILA
• Boosts PYPL, EXPE, LBTYK, AKAM, LBTYA
• Cuts MSFT, ADBE, GOOG, FB, JD
• No longer shows CHTR, HTZ, CAR, QIHU, DDD

CORVEX MANAGEMENT

• New stakes in BEAV, JCI, MON, EVHC, KSU, WWAV
• Boosts BLL, P, TMH, COMM, NOMD
• Cuts VER, GOOGL, FNF
• No longer shows PFE, EQC, VRX, AGN, GLPI

DUQUESNE FAMILY OFFICE

• New stakes in HAL, ABBV, FCX, AA, DE
• Boosts HDB
• Cuts FB, EEM, AMZN
• No longer shows KO, PM, SO, DUK, GOOGL

ELLIOTT MANAGEMENT

• New stakes in MON, LOCK, IMPV, PHM, MENT
• Boosts CAB, AGN
• Cuts IPG, SBS, RYAAY, RRTS, NBHC
• No longer shows QLIK, PFE, BXLT, ODP, PAH

EMINENCE CAPITAL

• New stakes in USFD, CCE, STZ, WEN, DLTR
• Boosts ICE, MON, ANTM, ZNGA, BERY
• Cuts YHOO, LNKD, BIDU, ARRS, TTWO
• No longer shows CCL, WBS, ZBRA, WYNN, RL

ETON PARK CAPITAL

• New stakes in MDVN, MON, ORLY, BABA, AFI
• Boosts MSFT, SYT, HYG, ADBE, MHK
• Cuts GLD, SBAC, EMC, ODP
• No longer shows AGN, CI, IM, SPLS, GLPI

FAIRHOLME CAPITAL

• Boosts BAC, JOE, SRSC, SHOS, LE
• Cuts SHLDW, SRG
• No longer shows DNOW

GATES FOUNDATION

• Boosts LILAK, LILA
• Cuts BRK/B

GLENVIEW CAPITAL MANAGEMENT

• New stakes in IMS, WMB, Q, DD, FDC
• Boosts HUM, CHTR, HTZ, LBTYK, LBTYA
• Cuts WOOF, TEVA, DOW, TMO, MAN
• No longer shows TWC, MCK, ARMK, PNR, CDNS

GREENLIGHT CAPITAL

• New stakes in CPN, RAD, AYA, PRGO, ABC
• Boosts MYL, CC, HTS, AER, CYH
• Cuts AAPL, KORS, TWX, VOD, TERP
• No longer shows M, AGN, AGNC, EMC, BAX

HIGHFIELDS CAPITAL MANAGEMENT

• New stakes in HLT, XLI, MSFT, AGN, BP
• Boosts TEVA, WMB, TSLA, MAR, HTZ
• Cuts CBS, ICE, TRIP, PEP, EMC
• No longer shows MCD, TWC, DIS, BXLT, BK

ICAHN ASSOCIATES

• New stakes in AGN
• Boosts AIG, XRX, IEP
• Cuts HTZ, NUAN, PYPAL
• No longer shows ENZN, SSEIQ

ICONIQ CAPITAL

• New stakes in TPX, LNKD, TSLA, PXD, IWO,
• Boosts VEA, ACWV, VTI, ACWI, XLE
• Cuts BABA, VWO, FB, IJR, IVV
• No longer shows UNH, IWM

JANA PARTNERS

• New stakes in LBRDK, CCE, EXPE, HRS, PF, TIME
• Boosts CSRA, HDS
• Cuts WBA, MSFT, GOOG, CAG, CSC
• No longer shows PFE, SRCL, LVNTA, AGN, TDG

KERRISDALE ADVISERS

• New stakes in SERV, ANSS, JCI, SSNC, SLV
• Boosts LXFT, STC, MENT, GPC, PYPL
• Cuts PRXL, SPGI, CTSH, MCK, EBAY
• No longer shows SPY, INFO, YELP, Q, SAM

LAKEWOOD CAPITAL

• New stakes in CHTR, CI
• Boosts COF, C, MA, ORCL, CDK
• Cuts IM, GS, FDX, CFG, TSE
• No longer shows TWC, AGN, QRVO

LANSDOWNE PARTNERS

• New stakes in ABX, LUK, NEM, COP, EIX
• Boosts DIS, FB, JPM, UTX, NKE
• Cuts WFC, V, GOOGL, LNKD, CMCSA
• No longer shows AAPL, RACE, CME, CLVS, OXFD

LEONARD GREEN

• Cuts SHAK
• No longer shows KSS, JWN

LONE PINE CAPITAL

• New stakes in SHPG, ATVI, SHW
• Boosts YUM, MNST, PCLN, BUD, DLTR
• Cuts MSFT, GOOGL, FLT, NOC, FB
• No longer shows JD, AGN, BXLT, ILMN, HZNP

LONG POND CAPITAL

• New stakes in MAR, EQR, ESS, LEN, MSG
• Boosts PGRE, PFSI, CBG
• Cuts TCO, FCE/A, SFR, BPOP, HLT
• No longer shows CLNY, AMH, CAA, SRG, NMIH

MARCATO CAPITAL

• New stakes in SIG, CSC, ABTL
• Boosts EPIQ, CBPX, BLDR, VRTS, LIND
• Cuts BK, M, URI, BID, TPHS
• No longer shows RLGY, SFR

MAVERICK CAPITAL

• New stakes in PM, WCN, CSC, MYL, JACK
• Boosts PFE, AXP, UHS, LRCX, FB
• Cuts LBTYK, AGN, NWL, ADBE, KSU
• No longer shows ST, AVGO, HDS, PCRX

MELVIN CAPITAL

• New stakes in PCLN, SBUX, WMT, DE
• Boosts AMZN, DLTR, AAP, CRM, V
• Cuts LOW, FB, SIG, ADBE
• No longer shows EXPE, NKE, HD, COST

MILLENNIUM MANAGEMENT

• New stakes in AMZN, WMB, VZ, WCN, CCE
• Boosts CHTR, HAL, EXC, AET, XEL
• Cuts YHOO, DISH, EXPE, T, WR
• No longer shows TWC, NFX, AEE, CTRP, CERN

MOORE CAPITAL

• New stakes in EWZ, BAC, C, JPM, CAG
• Boosts AMZN, FB, APC, CMA,JCI
• Cuts CTRP, HD, XLP,BABA, XLU
• No longer shows GOOGL, XHB, FXI,BG, HYG

OMEGA ADVISORS

• New stakes in ARRS, SHPG, C, NFLX, EPD
• Boosts PVH, FNF, SLW, EA, ETFC
• Cuts RLGY, CIM, ASH, AIG, AER
• No longer shows SIRI, GILD, XLP, GLPI, AAPL

PASSPORT CAPITAL

• New stakes in AGN, LBTYK, CSCO, HAL, SLW
• Boosts CHTR, YHOO, SRE, FLEX, TAP
• Cuts CF, TSM, MSFT, PFE, RTN
• No longer shows CMCSA, JNJ, BMY, MRK, QVCA

PAULSON & CO

• New stakes in EMC, VMW, TTWO, SNY, JNJ
• Boosts SGYP, VRX, FB, ALXN, DXCM
• Cuts AGN, TMUS, PRGO, TEVA, SHPG
• No longer shows TWC, LRCX, POST, CIT, CVC

PERRY CORP.

• New stakes in STJ
• Boosts AER
• Cuts ALLY, AIG, BLL, TWX
• No longer shows HCA, SE, UAM

PERSHING SQUARE

• Cuts ZTS, CP

POINT72 ASSET MANAGEMENT

• New stakes in AVGO, INTC, CMG, CPN, SWN
• Boosts AMZN, TSO, KAR, XEC, ROP
• Cuts FB, NFLX, LOW, TWX, MNST
• No longer shows GOOGL, CTL, VRTX, ADI, TSRO

POINTSTATE CAPITAL

• New stakes in AVGO, MON, UNP, EGN, ENDP
• Boosts AMZN, TEVA, STZ, GDX, SWN
• Cuts AGN, MCD, CHTR, CLVS, CMCSA
• No longer shows LYB, LNG, ABBV, MDVN, NOC

SACHEM HEAD

• New stakes in EVHC, GOOGL, MIK
• Boosts CHTR, FLT
• Cuts AGN, TMH, AKRX
• No longer shows PTC

SANDELL ASSET

• New stakes in CVT, LNKD, VA, IM, MDVN
• Boosts HOT, YHOO, FCS, CIT, ALLY
• Cuts BOBE, MEG
• No longer shows TVPT

SOROS FUND MANAGEMENT

• New stakes in LBRDK, ROVI, GLD, CSAL, SUPV
• Boosts DISH, EXAR, MODN, SYNA, CBPO
• Cuts ABX, VIAV, EBAY, ZTS, AGRO
• No longer shows EQIX, TWC, FB, BXLT, RACE

STARBOARD VALUE

• New stakes in BLOX, DK, PNK, MKTO
• Boosts AAP, WRK, IWN
• Cuts DRI, M, NSP, FCPT, CW
• No longer shows ACM

TEMASEK

• New stakes in BEAV, IBN, NTLA
• Boosts BABA, UNVR
• Cuts Q
• No longer shows FIS, MON

TIGER GLOBAL

• Boosts CHTR, AMZN, PCLN, QSR
• Cuts AAPL, SQ, FLT, PSTG, XRS
• No longer shows NFLX, DATA, XON, GME, Z

THIRD POINT

• New stakes in FB, CHTR, MON, SHW, SHPG
• Boosts TDG, STZ, BUD, DHR, NOMD
• Cuts DOW, GOOGL, YUM, TAP
• No longer shows ROP, AVGO, SIG

TRIAN FUND

• Boosts MDLZ, SYY, BK, PNR, GE
• Cuts DD
• No longer shows LM

TUDOR INVESTMENT

• New stakes in V, FICO, STJ, DWA, PXD
• Boosts HOLX, ESRX, POST, LNKD, PVTB
• Cuts BCR, MRK, TRU, MDVN, TSS
• No longer shows SPY, TWC, FIS, WMT, EEM

VALUEACT

• New stakes in MS, TRN, AFI, STX
• Boosts BHI, ADS, WLTW, CBG, MSFT
• Cuts MSCI
• No longer shows MSI, AGU, ADBE

VIKING GLOBAL

• New stakes in ICE, MSFT, RICE, AIG, HIG
• Boosts BIIB, TMUS, MA, APC, NWL
• Cuts AGN, TEVA, AET, GOOGL, NFLX
• No longer shows ANTM, TDG, PRU, ENDP, CB

Today was the deadline for hedge funds to submit their Q3 13-F filings, which considering they represent a snapshot in time as of Sept 30, prior to both the October volatility spike and the presidential election, are likely totally irrelevant by this time.

Among the more notable changes was Berkshire taking new stakes in American Airlines, Delta and United, sending the airlines sector higher after hours. Large-cap tech stocks remain favored as many funds bought or boosted stakes in Apple, Alphabet, Facebook and Alibaba just ahead of the post-Trump FANG rout.

David Tepper's Appaloosa Management bought into the surge in technology stocks in the third quarter, taking new stakes in Apple, Yahoo and Facebook. Tepper, who moved Appaloosa to Miami Beach from New Jersey this year, added the social media company to his portfolio, as did Sarasota-based Aviance Capital Management, and Tampa-based Suncoast Equity. Boca Raton’s American Asset Management, Polen Capital and Steinberg Global, along with Aviance Capital Partners in Naples and St. Johns Investment in Jacksonville all boosted stakes in Facebook.

And speaking of Appaloosa, we find it amusing that the biggest long equity position of the wealthiest hegde fund manager possibly alive today, is none other than the market itself: at $541 million, Tepper's top holding is the SPY.

Below is a summary, courtesy of Bloomberg of 3Q equity holdings from Sept. 30 13-F filings by the top hedge funds, with some of the new, added, cut and exited positions for each.

ADAGE CAPITAL

• New stakes in KMI, SWK, AYI, BABA, NOC, ITW, MAS, WLK, ASH, EMN
• Boosts AAPL, MRK, CF, PNC, GOOGL, TAP, HDS, EMR, APC
• Cuts BMY, AAL, HON, AGN, MMM, T, BURL, PCG, ADP
• No longer shows HES, NSAM, POR, CFX, HE, STI, NLSN, HSY, LDOS, SBGL

APPALOOSA MANAGEMENT

• New stakes in FB, AAPL, YHOO, TPX, BAC, CFG, QCOM, PNC, VMW, DAL
• Boosts KMI, GT, GLBL, HCA, ETP, HDS
• Cuts LUV, NXPI, GOOG, SYF, GM, WHR, MHK, HAIN, WMIH, ALL
• No longer shows FOXA, CYH, TGI, IR, FOX, PPG, QHC

BAUPOST GROUP

• New stakes in SYF, NSAM, ODP, CPAA
• Boosts PBF, FOXA
• Cuts OLN, INVA, VMW, OREX, PYPL, KIN, LNG
• No longer shows C, CAR, OZM

BLUEMOUNTAIN

• New stakes in KLAC, SHPG, NXST, SAEX, XPO, TWNK, MRO
• Boosts SYMC, CI, LRCX, MYGN, TV, KSS, ALSN, WST, URI
• Cuts MBLY, ARMK, AVGO, APD, BBY, TPX, AGN, IAC
• No longer shows MDVN, WLTW, VRNT, FNG, JWN, CCE, BIOS

BERKSHIRE HATHAWAY

• New stakes in AAL, QSR, DAL, UAL
• Boosts CHTR, PSX, LBTYA, V, WBC, BK
• Cuts WMT, KMI, DE
• No longer shows SU, QSR, MEG

BRIDGEWATER ASSOCIATES

• New stakes in SWN, ENDP, IBM, RCI, CAG, TU, UPS, LB, JCP
• Boosts AAPL, INTC, MSFT, CSCO, CPB, AMAT
• Cuts GG, ABC, ADS, AEM, SPLS, LYB, BIIB, FDX, JNJ, TOL
• No longer shows ABX, MET, MRK, PH, CVS, PEP, LNC, NTAP, RCL, PVH

CORVEX MANAGEMENT

• New stakes in JCI, CCE, JPM, HAIN, TMUS, BAC, CSOD, BIIB
• Boosts ZAYO, PAH, MPC, COMM, TMH, SIG
• Cuts WMB, BEAV, BLL
• No longer shows VER, GOOGL, KSU

ELLIOTT MANAGEMENT

• New stakes in MPC, ECA, GEO, CXW, RAD, GPI, ABG
• Boosts AA, SYMC, MENT, IMPV, LOCK, BBL, MITL, HLF, IPG
• Cuts FTNT, NE, FBIO, CAB
• No longer shows CNP, SBS, PAY, NBHC, QLYS, CYBR, SPSC, RNG, QEP, EGN

EMINENCE CAPITAL

• New stakes in DNKN, CBG, EXPE, CTRP, FTNT, COMM, MENT
• Boosts ADSK, HUM, CF, WEN, YHOO, ARRS, MS, ANTM, ZNGA, GPI
• Cuts BIDU, TTWO, CAA, FCE/A, SPGI, BERY, CCE, ICE, PTC, KAR
• No longer shows FOSL, DLTR, TRIP, LGF, AMBA, SJM

ETON PARK CAPITAL

• New stakes in FANG, TWTR, GOOG, KMI, CAB, IMPV
• Boosts MSFT, CLR, MHK, AMZN
• Cuts SYT, WB, SBAC, AFI, SINA, ADBE
• No longer shows CRTO, ODP, ECR

GLENVIEW CAPITAL MANAGEMENT

• New stakes in UHS, TWX, ENDP, PAH, AAPL, HPE, CCE, BEAV, TLRD, WLTW
• Boosts CBS, ANTM, Q, HUM, WMB, HCA, FDC, CSC, ESRX
• Cuts ABBV, LH, HTZ, TEVA, CHTR, FLEX, MAN, VER, FMC, CI
• No longer shows WOOF, FIS, SBAC, TMUS, SYT

GREENLIGHT CAPITAL

• New stakes in X, GEO
• Boosts AER, CPN, UHAL, MYL, VOYA, RAD
• Cuts KORS, AAPL, TTWO, TWX, ACM, TPH, AGR, DSW, QHC
• No longer shows FOXA, HUM, PRGO, ABC, HTZ, CYH, LAMR, VOD

HAYMAN CAPITAL MANAGEMENT

• Cuts NMIH

HIGHFIELDS CAPITAL MANAGEMENT

• New stakes in RAD, HSY, LBTYA, COST, SYT, HRI, PDCE, TRU, AA
• Boosts HLT, BEN, MAR, APC, SU, CF, MIK
• Cuts TEVA, WBA, WMB, MSFT, HTZ, PFE, CBS, TRIP, TSLA
• No longer shows PEP, BP, RDS/B, GG, GS, SWN, VRX, CC

ICAHN ASSOCIATES

• Boosts LF, HTZ, IEP
• Cuts AGN, NUAN, CVRR
• No longer shows CHK, RIG

ICONIQ CAPITAL

• New stakes in ADSK, RH
• Boosts JD
• Cuts FB
• No longer shows TSLA

JANA PARTNERS

• New stakes in UHS, PCLN, MDLZ, VIAB, TWTR, SEM, VVV, KATE
• Boosts HDS, JCI, WLTW, CSC, HPE, MPC, HRS
• Cuts GOOG, LBRDK, CCE, CAG, USFD, CSRA, GPK
• No longer shows WBA, MSFT, EXPE, PF, AN, ADS, SYF, BERY, ASH, RACE

LONE PINE CAPITAL

• New stakes in EBAY, EXPE, BABA, TV, AVGO, HLT, ICE, KMI, WMB, ALGN
• Boosts EA, ATVI, CHTR, VMC, COMM, DLTR, MNST
• Cuts PCLN, FB, V, LULU, YUM, EQIX, STZ, SHPG, ULTA, MHK
• No longer shows NOC, BUD, MA, PYPL, SHW, PXD, ANET, GOOGL, AXP

LONG POND CAPITAL

• New stakes in WFC, GGP, SHW, CAA, CZR, MPW
• Boosts EQR, ESS, LEN, MAR, INXN, MSG, BYD
• Cuts TCO, H, FCE/A, MTH, LQ, PGRE, BXMT, HLT
• No longer shows CBG, KEY, SFR, BPOP, CFG, BLDR, SRC, PFSI

MARCATO CAPITAL

• New stakes in BWLD, IAC, ADS, TEX, AIRM, FC, PNK, RH, HMTV
• Boosts CSC, VRTS, ABTL, BLDR, LIND
• Cuts BK, SIG, URI, LBRDK, M, CBPX, LBRDA, HZN, GT, BID

MAVERICK CAPITAL

• New stakes in DG, QCOM, SUM, SWFT, TMUS
• Boosts AAPL, BUD, LVLT, ORLY, UHS
• Cuts ADBE, AXP, CMCSA, FB, MYL
• No longer shows AGN, ARMK, CL, JACK, TSN

MELVIN CAPITAL

• New stakes in GOOGL, YY, EA, BABA, MA, MGM, COST, AVP, MAS, CALM
• Boosts FB, LOW, CASY, SHW, ZTS, DE, STZ, ADBE, SUM, PLAY
• Cuts DLTR, NFLX, AMZN, PCLN, SBUX, BURL, MHK, MNST, KATE, V
• No longer shows WMT, CRM, NWL, SIG, CMG, JACK, USFD, GRUB, PLKI

MOORE CAPITAL

• New stakes in GOOGL, MA, PCLN, AVGO, FL, SIVB, GXP, TWX, CPAA
• Boosts FB, BABA, STZ, EA, HD, V, CL, APC
• Cuts BAC, PPG, WLK, AME, EQIX, M, HUBB, GIS, AMZN
• No longer shows in C, JPM, ABX, CMA, WBC, CONE, CAG, JCP, CQH, ICE

OMEGA ADVISORS

• New stakes in HES, P, WMB, SSNC, TIME, PE, RICE, TSE, VVV
• Boosts SHPG, PVH, BERY, ASPS, NBR, EPD, TCRD, GPOR, MDCA, MVC
• Cuts GOOGL, CIM, NRZ, AGN, TRCO, DOW, MSFT, ASH, EA, ETFC
• No longer shows UNH, TRGP, C, NFLX, SLW, FCB, TJX, CP, AZO, RLGY

PASSPORT CAPITAL

• New stakes in CX, MRVL, PE, SINA, SYMC
• Boosts BABA, CXO, JCI, RICE, WDC
• Cuts AGN, CF, LBTYA, SRE, TAP
• No longer shows CHTR, CSCO, EQT, GE, YHOO

PAULSON & CO

• New stakes in HPE, STE, EBAY, HUM, HCA, MAR, CVS
• Boosts BIIB, LOXO, FB, FDX, BSX, ETSY, LIVN, BCRX
• Cuts MYL, TEVA, GRFS, SHPG, AU, AGN, NG, CIE, AKRX
• No longer shows BEAV, Q, CI, RAD, PCLN, PRGO, EGRX, KTWO

PERRY CORP.

• Cuts ALLY, AER
• No longer shows AIG, BLL, TWX, JNJ

POINT72 ASSET MANAGEMENT

• New stakes in GOOGL, CMCSA, GOOG, MCD, AME, HON, FTV, LUV, BCR, WFM
• Boosts FB, BG, SRPT, AAPL, YHOO, SHW, LOW, WNR, HAL, V
• Cuts AMZN, KAR, TSO, SBH, SIG, LLY, INTC, LNCE, SLB, CMG
• No longer shows GLW, KORS, RLGY, CRM, SWN, UTX, VMW, MXIM, BLL, WCC

POINTSTATE CAPITAL

• New stakes in BAC, VRX, HUM, MRK, CFG, ATVI, MPC, CXO, CHK, APC
• Boosts AVGO, ADBE, ECA, CLVS, UNP, AMZN, COG, PH, GOOGL, APD
• Cuts TEVA, CELG, CHTR, STZ, XEC, SWN, BHI, EOG
• No longer shows AGN, CPN, EGN, DYN, RRC, AET, FDC, DVN, SGEN, SPB

SANDELL ASSET

• New stakes in SVU
• Boosts KLAC
• No longer shows AKRX

SOROS FUND MANAGEMENT

• New stakes in WMB, HPE, INTC, UBNT, FHB, SYMC
• Boosts LBRDK, VMW, ABX, AMZN, TIVO, WUBA, AMAT, SUPV, VIAV,
• Cuts DISH, ZTS, EBAY, KHC, EXAR, MDLZ, ATVI, AAL, EXA, MJN
• No longer shows GLPI, CIT, ESNT, CBPO, JD, W, SYNA, CMCSA, HUM, POWI

STARBOARD VALUE

• New stakes in PRGO, HPE, STC, CAB, TRNC, FRGI, IMPV
• Boosts MRVL, M, AAP
• Cuts WRK, CW, BAX, PNK
• No longer shows DRI, DK, NXST, FCPT

TEMASEK

• New stakes in ACIU, RDS/B, CTRP
• Boosts EROS
• Cuts BABA
• No longer shows Q

TIGER GLOBAL

• New stakes in BABA, GOOG, CMCSA, VIPS, V, AWI, WUBA
• Boosts PCLN, AAPL, MA
• Cuts CHTR, JD, FLT, ONDK, ETSY, AMZN
• No longer shows XRS, SQ

THIRD POINT

• New stakes in AAPL, BABA, HUM, V, CAG, WMB, KDMN
• Boosts FB, GOOGL, GD, TAP, SPGI, BID, DHR, LBTYA, SHW
• Cuts AGN, YUM, MHK, CB, AME, CHTR, BUD, SHPG, UNP
• No longer shows LOW, SEE, ATVI, CCE, HRS, WLL, MRO, TSO, DVN

TRIAN FUND

• Boosts BK, SYY
• Cuts GE

TUDOR INVESTMENT

• New stakes in SHW, JCI, FLT, HUM, WEX, RJF
• Boosts MRK, BIIB, ADS, PEP, FB, GOOGL, BCR, MA, UNH
• Cuts ESRX, LH, POST, FICO, IAC, PX, DPS, MDLZ, KLAC, V
• No longer shows PG, ARMK, PNR, NWL, HR, AMAG, NSA, RCL, ADP, LII

VIKING GLOBAL

• New stakes in BAC, LYB, UHS, CRM, LOW, AZN, LBTYA, LBTYK, MET, AMSG
• Boosts MSFT, CP, STZ, GOOGL, ECA, GOOG, JD, MA, APC, RICE
• Cuts AVGO, TEVA, NFLX, LLY, APD, BABA, WBA, WUBA, KITE
• No longer shows NWL, AGN, DVA, ICE, CTRP, PXD, MMC, HIG, AET, HCA

Source: Bloomberg

Yesterday's barrage of 13F releases showed that hedge funds like Third Point, Eton Park and Blue Ridge piled into shares of major banks, David Tepper's Appaloosa jumped into the pharma sector starting new positions in Teva, Pfizer and Mylan while Buffett aggressively added to airline steaks and nearly quadrupled his Apple position to $7.7 billion, making him a Top 10 holder  during the fourth quarter.

Bank stocks remain near the highest levels since the financial crisis, rallying since President Donald Trump’s election victory on expectations for stimulus and policy changes. Goldman shares closed Tuesday at a record high. According to Bloomberg data, hedge fund managers added more to financials than any other sector last quarter.

Here is a summary of the biggest buys and sells from the latest round of 13F filings, released 45 days after the end of the quarter, which list the U.S. holdings of money managers as of Dec. 31 courtesy of Bloomberg:

ADAGE CAPITAL

• Top new buys: CC, ALB, VVC, DISH, GIS, EXC, COTY, TSN
• Top exits: EMR, LYB, GLD, DOV, BABA, PEGI, USB, WLK, MMM, AXP
• Boosted stakes in WFC, GD, JCI, MOS, DIS, GS, NEE, PKI, LRCX, GE
• Cut stakes in HON, SRE, AGN, PG, HDS, APD, EW, GRA, PVH, BURL, CI

APPALOOSA MANAGEMENT

• Top new buys: TEVA, PFE, MYL, RF, CMA, MU, URI, AAL, CNC, JCP
• Top exits: SYF, HDS, BAC, VMW, USFD, C, GM
• Boosted stakes in AGN, PNC, FB, CFG, LUV, QCOM, WPZ, MHK, GOOG, KMI
• Cut stakes in WHR, AAPL, YHOO, ALL, GT, OC, HCA, DAL, WMIH, HAIN

BAUPOST GROUP

• Top new buys: MCK, CAH, SYT, ABC, SCAC, LEXEA
• Top exits: PYPL, OLN, VMW, KLXI, ODP, KIN
• Boosted stakes in AGN, SYF, FOXA, CLNS, CACC, TBPH, VSAT
• Cut stakes in LNG, CASC

BLUE RIDGE CAPITAL

• Top new buys: BAC, WFC, MIDD
• Top exits: INFO, DLTR, WBA, ALLE, CNX, LNG, FTV, ECA, GCP
• Boosted stakes in WLL, NKE, C, DVN, OAS, AYA, PXD, GS, AGN, GOOGL
• Cut stakes in ULTA, FLT, ADSK, AMZN, CHTR, KHC, GRA, CP, SWN, DHR

BERKSHIRE HATHAWAY

• Top new buys: LUV, MON, SIRI
• Top exits: DE, KMI, DNOW, LEE
• Boosted stakes in AAPL, DAL, UAL, AAL, BK
• Cut stakes in WMT, VZ

BRIDGEWATER ASSOCIATES

• Top new buys: UNH, AET, SPG, KORS, MCO, PPG, MFC, TSN, SLF, JPM
• Top exits: BMY, RCI, TU, ADBE, UPS, KO, MSI, MHK, HD, CAG
• Boosted stakes in TAP, GME, RHT, DKS, BLK, CTL
• Cut stakes in SPY, INTC, GILD, JNPR, AMAT, VFC, PFE, KSS, WHR

CORVEX MANAGEMENT

• Top new buys: YUMC, CRM, GOOGL, MO, BK, AMTD, ETFC
• Top exits: CCE, HAIN, CSOD, BIIB
• Boosted stakes in BAC, TMUS, JPM, MDCO, P, NOMD
• Cut stakes in SIG, WMB, JCI, COMM, BLL, MPC, PAH

DUQUESNE FAMILY OFFICE

• Top new buys: HAL, C, WFC, LYB, AA, JPM, YHOO
• Top exits: BABA, ABT, AVGO, ATVI, ABX, AMZN, AEM, HDB, ZTS, FB
• Boosted stakes in PNC, BAC, EOG, NUE, PXD, WMB, ACIU
• Cut stakes in PSTG, FCX, ABBV

ELLIOTT MANAGMENT

• Top new buys: ARNC, ADNT, NXPI, PAH, HCA, CTSH, NRG, GTYH, CNDT, THC
• Top exits: IPG, GEO, FCB, CXW, RAD, FTNT, HLF, NE, FBIO, VER
• Boosted stakes in MPC, BBL, ABG, SAH, GPI
• Cut stakes in AA, TSU, RYAAY

EMINENCE CAPITAL

• Top new buys: CSOD, LBTYA, TRIP, IMPV, RXN
• Top exits: FCE/A, W, COMM
• Boosted stakes in LEN, VSAT, CBG, LQ, DNKN, STZ, EXPE, FTNT, ARRS, ICE
• Cut stakes in CAA, YHOO, ADSK, SPGI, HUM, CCE, BIDU, TTWO, ZNGA, PTC, ANTM

ETON PARK CAPITAL

• Top new buys: CMA, BAC, MS, V, CMCSA, RSPP, FITB, CHTR
• Top exits: SHW, ADBE, BABA, ORLY, SBAC, TWTR, GOOG, AMZN, CLR, SINA
• Boosted stakes in FANG, PXD, BIIB, SYT, KMI, CIE
• Cut stakes in MSFT, MHK, AWI, CDK, HYG, IMPV, MOMO, GOOGL

GREENLIGHT CAPITAL

• Top new buys: SYT, AA, FRED
• Top exits: KORS, TTWO, ACM, X, ARRS, TERP, GEO, GLBL
• Boosted stakes in MYL, AAPL, VOYA, RAD, PVH
• Cut stakes in GM, AGR, CC, YELP, CNX, GDX, DSW, YHOO, CPN, DDS

HIGHFIELDS CAPITAL MANAGEMENT

• Top new buys: FDX, IVZ, CTSH, SYMC, LOW, KMI, CVS, WMT, ARNC
• Top exits: SU, CF, HTZ, HSY, COST, ITUB, GLD, CERN, PDCE, TRU
• Boosted stakes in TEVA, AMT, BEN, TV, HLT, CCE, VOD, CBS, CVE
• Cut stakes in GOOG, APC, WMB, ABBV, MGM, GOOGL, AER, WBA, ICE, APO

ICAHN ASSOCIATES

• Top exits: VLTC
• Boosted stakes in IEP, HTZ, HLF
• Cut stakes in PYPL, NUAN, FCX

ICONIQ CAPITAL

• Top new buys: BL, COUP, CMG, AAPL, TTWO, ONVO
• Top exits: ADSK
• Boosted stakes in IAU, SPY, XLE, VNQ, OAK
• Cut stakes in BABA, GLD, JD, LLNW

JANA PARTNERS

• Top new buys: BMY, CRM, TDG, AET, CTSH, LW, MCK, PRXL, YUM, ZAYO
• Top exits: JCI, CCE, MPC, HPE, PCLN, GOOG, MDLZ, GPK, CSRA, VIAB
• Boosted stakes in HDS, NUVA, YHOO, UHS, SAGE, SEM, ACAD, VVV, RARE, INCY
• Cut stakes in HRS, WLTW, CSC, LBRDK

LANSDOWNE PARTNERS

• Top new buys: HAS, ADNT, COG, NEE, FSLR, CPS, WBA, ECA, ALGN
• Top exits: AES, BWA, AMD
• Boosted stakes in BAC, JCI, SPWR, CRM, BABA, FB
• Cut stakes in V, AMZN, NKE, CMCSA, LB, GOOGL, DIS, C, IR, CNQ

LONE PINE CAPITAL

• Top new buys: PYPL, PNC, BAC, SYMC, ECA, RICE, VXX
• Top exits: MNST, YUM, HLT, KMI, MHK, HCA
• Boosted stakes in V, WMB, AVGO, BABA, MSFT, STZ, EQIX, ADBE, ALGN, EA
• Cut stakes in EBAY, DLTR, PCLN, EXPE, LNG, ULTA, HDB, NKE, FLT, TV

LONG POND CAPITAL

• Top new buys: QCP, RPAI, AVB, UDR
• Top exits: BYD, GGP, LQ, CAA, MTH, MPW
• Boosted stakes in FCE/A, ESS, LEN, MSG, H, SHW, CZR, PGRE, INXN
• Cut stakes in BXMT, HLT, TCO, EQR, MAR, WFC

MARCATO CAPITAL

• Top new buys: AIR, ERI, BREW
• Top exits: BK, URI, ADS, AIRM, PNK
• Boosted stakes in CSC, IAC
• Cut stakes in BID, LBRDK, M, GT, CBPX, FC

MAVERICK CAPITAL

• Top new buys: FLT, MLM, CNC, RF, NCR, XNCR, HCA, FFIV, CPRT, SC
• Top exits: DG, RDN, ERIC, SPY, KSU, SUM, RTRX, LDOS, ROST, ADI
• Boosted stakes in AET, ADBE, DLTR, VMC, FB, CI, NWL, SHPG, MYL, UHS, CI
• Cut stakes in PM, LRCX, NOC, AAPL, BUD, PCLN, COMM, ORLY, CMCSA, SABR

MELVIN CAPITAL

• Top new buys: HII, FDX, ULTA, THO, MTN, SNA, BC, HDS, DG, KR
• Top exits: AMZN, DPZ, BABA, MHK, COST, CTRP, KATE, EBAY, KAR, AN
• Boosted stakes in V, DE, MCD, MAS, SBUX, BURL, NFLX, CALM, MGM, DLTR
• Cut stakes in FB, LOW, SHW, YY, ZTS, PCLN, EA, AVP, GPRO, MA

MILLENNIUM

• Top new buys: TGT, PEG, FCX, CLX, CRM, MMC, BDX, DLTR, F, UDR
• Top exits: PG, CSCO, WMT, INTC, STX, SEMG, AXP, SYK, CHK, RHT
• Boosted stakes in BK, LOW, AEP, DIS, NEE, QEP, MS, CMCSA, COST, SBUX, TIME, CI
• Cut stakes in COTY, AAPL, FB, AMZN, XEC, MSFT, CCI, FDX, EBAY, FIS, MON

MOORE CAPITAL

• Top new buys: GRUB, SYF, GTYH, EBAY, VOYA, C, ATH
• Top exits: AMZN, V, POST, MA, NWL, PCLN, AMT, HD, CL, ALL
• Boosted stakes in BAC, ORLY, AZO, ZEN, MNST, ULTA, DHR, GLNG, FDC
• Cut stakes in FB, BABA, STZ, APC, GOOGL, ATVI, EA, TMUS, AER

OMEGA ADVISORS

• Top new buys: APC, AMZN, WRD, TSRO, BLUE, ZNGA, OMAM, TUSK, UBSI
• Top exits: MSI, EA, SSNC, EPD, PE, RICE, TSE, CTRP, CLF, PDCE
• Boosted stakes in TIME, GPOR, SHPG, FGL, BLL, PMT, P, MDCA
• Cut stakes in NAVI, OMF, TRCO, AER, AIG, FDC, AGN, CIM, HRG, PVH

PAULSON & CO.

• Top new buys: INSW, TIME, GOOG, WDAY, GSK
• Top exits: TMUS, GRFS, VNDA, HUM, MAR, MCK, CVS, EXPE, JNJ, LLY
• Boosted stakes in DXCM, THM, LOXO, PFE, MELI, OSG, ARDM, STE, LIVN, ETSY
• Cut stakes in AIG, SHPG, TEVA, AGN, GLD, BIIB, HPE, VMW

PERSHING SQUARE

• Top exits: ZTS
• Boosted stakes in CMG
• Cut stakes in VRX, APD, PAH

POINT72 ASSET MANAGEMENT

• Top new buys: VZ, AMAT, DIS, ABBV, VRTX, EXPE, JBLU, CRM, VIAB, AYI
• Top exits: AMZN, NWL, CMCSA, AAPL, VRX, THS, PCLN, PBYI, ACHN, EXEL
• Boosted stakes in TSO, WMB, ULTA, NVDA, V, CNQ, ATHN, WPX, STZ, FMSA
• Cut stakes in FB, GOOGL, ZTS, SRPT, ECA, COP, SHW, APC, FTV, AZO

POINTSTATE CAPITAL

• Top new buys: LYB, KEY, FITB, DVA, PNC, STLD, MS, GS, FE, AET
• Top exits: TEVA, VRX, MRK, AYA, C, BABA, K, SHW, ENDP, BIIB
• Boosted stakes in WFC, CMCSA, HAL, LUV, ALXN, CFG, GD, FANG, APC, URI
• Cut stakes in AMZN, AVGO, MSFT, BAC, UNP, STZ, MPC, ADBE, ATVI, COG, MON

RUANE CUNNIFF & GOLDFARB

• Top new buys: AMZN, COF, TRUP, DHI, TOL, FB, BABA
• Top exits: WMT, FTV, MTCH, VRX, SFUN, VRSK, USB, AGN, LMT, CMCSA
• Boosted stakes in KMX, XRAY, GOOGL, BLDR, W, IRS, IAC, T, AEP, ATHN
• Cut stakes in PX, MHK, BRK/A, TJX, JD, WAT, CMG, FAST, PRGO, MA

SABA CAPITAL

• Top new buys: AGN, OMF, TSLA, HTZ, THS
• Top exits: CRC, MBI, WDC, HES, QEP, SDRL, NE

SANDELL ASSET

• Top new buys: LW
• Top exits: SVU, XLRE, KLAC
• Boosted stakes in CIT

SOROS FUND MANAGEMENT

• Top new buys: KEG, FB, KSS, PNC, DV, GS
• Top exits: ABX, INTC, WUBA, AMAT, CSAL, PANW, ATVI, NVDA, SPLK, VIPS
• Boosted stakes in TMUS, CRC, MDLZ, GOOG, XLE, NFLX, SPY, EXA, ALLT
• Cut stakes in VMW, WMB, LBRDK, AMZN, UBNT, EXAR, EBAY, RLGY, SYMC, HPE

STARBOARD VALUE

• Top new buys: COL, CTSH, TRCO, VIAV, CSOD, TTWO
• Top exits: TRNC, CW, FRGI, IMPV
• Boosted stakes in PRGO, BAX
• Cut stakes in WRK, DEPO, NSP, HPE, QTM, PNK

TIGER GLOBAL

• Top new buys: FCAU, GOOGL, MSFT, TDG, DPZ, TAL, MELI, EDU, SYMC, FB
• Top exits: AAPL, WUBA
• Boosted stakes in PCLN, JD, V, AWI, QSR, FLT, AMZN
• Cut stakes in CHTR, BABA, MA, GOOG, VIPS, ETSY, ONDK, CMCSA

THIRD POINT

• Top new buys: JPM, BAC, ZAYO, HON, ANTM, GS, HDS, RICE
• Top exits: AGN, BABA, BUD, SHPG, V, WMB, LBTYA, AME, YUM
•  
• Boosted stakes in HUM, STZ, MHK, SHW
• Cut stakes in FB, TDG, GOOGL, DHR, SPGI, AAPL, CB, DOW, CAG

TRIAN FUND

• Top new buys: PG
• Boosted stakes in SYY, BK, WEN
• Cut stakes in MDLZ, DD, GE

TUDOR INVESTMENT

• Top new buys: TWX, WHR, HBAN, MS, CBOE
• Top exits: ADS, FB, VIPS, VNTV, IVZ, FLT, WEX, RJF, SRPT, W
• Boosted stakes in SPY, DHR, MTD, TSCO, NDAQ, FIS, STT
• Cut stakes in ZBH, PEP, MRK, BIIB, GOOGL, MA, HOLX, C, MLM

VALUEACT

• Top new buys: NTCT
• Boosted stakes in CBG, FOX, MSFT, TRN, ADS
• Cut stakes in MS, ALSN

VIKING GLOBAL

• Top new buys: DOW, DE, UNH, FOXA, SCHW, DIS, UNP, CHK, WYNN, MMC
• Top exits: TEVA, APD, SWN, APC, LLY, CPN, CRM, SEE, LOW, JCI
• Boosted stakes in MSFT, WBA, NFLX, V, JD, STZ, ETN, ECA, BMRN, XRAY
• Cut stakes in AMZN, MA, COG, RRC, CP, UHS, BAC, GPOR, TMUS, RICE

Source: Bloomberg

Bristol Myers stock jumped in afternoon trading after the WSJ reported that activist investor and Trump advisor, Carl Icahn, has taken an undisclosed stake in Bristol-Myers Squibb. If confirmed, he would be the second big activist to pressure the company following its recent disappointment in its cancer-treatment efforts. Earlier in the day, the pharma giant announced it would add three directors to its board and buy back $2 billion in stock in a pact with another activist, Jana Partners LLC.

The rationale for the "large stake" investment, according to the WSJ, is that the New York drug giant "has a good pipeline that would help make it an attractive takeover target, people familiar with the matter said. It isn’t clear how big the stake is."

The drug company’s market value now stands at about $90 billion.

The WSJ reminds us that Jana took a stake last year and began pushing for board changes after Bristol-Myers announced in January that a lung-cancer treatment wouldn’t get approval as fast as hoped, resulting in drop in company shares. That warning increased investor fears Bristol-Myers would lose out to rivals in a crucial treatment sphere and contributed to a roughly 30% decline in the stock since July. The shares had fallen by nearly 2% Tuesday afternoon to $53.55 following news of the settlement with Jana.

As the WSJ concludes, "Icahn has a history of successfully pushing for deals among pharmaceutical companies, and his presence on Bristol-Myers’ shareholder register will likely add to recent speculation that a bidder could swoop in following the stock decline. Such a possibility has helped boost Bristol-Myers shares somewhat since January."

The famed investor, who just turned 81, has a history with Bristol-Myers. In 2008, he was a large shareholder in ImClone Systems Inc. and helped rebuff Bristol-Myers’ attempt to buy the company, its partner on an important cancer drug, for $4.7 billion. Instead, Mr. Icahn supported Eli Lilly & Co. when it swooped in to buy ImClone for $6.5 billion.

 

In 2012, Mr. Icahn took a stake in Amylin Pharmaceuticals Inc. and called on the company to explore a sale after it had rebuffed a bid from Bristol-Myers. After the diabetes-treatment maker ran a sales process, it agreed to a higher bid, valued at $5.3 billion, from Bristol-Myers.

Ealier in the day, Bristol-Myers announced it recruited former senior executives from Bausch & Lomb Inc. and Vertex Pharmaceuticals Inc.—Robert Bertolini and Matthew Emmens, respectively, along with Theodore Samuels, who currently sits on the boards Perrigo Company PLC and Stamps.com. As a reminder, it was Icahn's planting of former Bausch & Lomb executive on the Forest Labs board that allowed a series of transactions including an eventual takeover of the company by Actavis, and subsequently Allergan, before ultimately the government had to intervene and block the merger between Allergan and Pfizer.

Who says activist investors are dead, swallowed whole by the relentless passive, ETF wave?

Moments ago Whole Foods, which has seen its stock suffer a painful decline for the past two years, spiked on a WSJ report that Barry Rosenstein's Jana Partners has amassed a 9% stake in WFM and is pushing the organic grocer to speed up its turnaround efforts while also exploring a possible sale. 

According to the WSJ, Jana, which is Whole Foods’ second-largest shareholder, plans to press the chain "to improve its technology and operations" to better compete with larger rivals, shake up its board and find out how much a potential bidder might be willing to pay, according to people familiar with the matter."

Because, the thinking goes, management never thought of that before.

And while Jana’s campaign is simply the result of the stock sliding (leading to unhappy LPs), forcing the activist investor to scramble and boost the flailing share price, the truth is that Whole Foods has struggled to make the transition from high-flying upstart with a loyal following into a large, national chain with the kind of back-office systems tracking customers and inventory that rivals use to keep costs down and sales up.

Whole Foods’ stock has risen 4% over the past 12 months, compared with a 15% gain in the S&P 500, and has lost more than half its value since peaking in 2013. Sales have fallen over the past 18 months. Same-store sales fell 2.5% during its fiscal year that ended in September 2016. The company’s market value currently stands at around $10 billion.

Some more details from the WSJ:

Jana has lined up a potential slate of board nominees, the people said, four months before the deadline to launch a board fight. That’s likely a signal that Jana, which has quietly reached settlements with several companies this year to install new directors, will be aggressive in demanding change at Whole Foods. The activist hasn’t yet met with Whole Foods’ current board or executives, the people said.

 

With Whole Foods, Jana is departing a bit from its usual approach. The fund, founded by Barry Rosenstein in 2001, typically works with management and boards behind the scenes. It’s played a role in changing the boards of Bristol-Myers Squibb Co. , Tiffany & Co. and Blackhawk Network Holdings Inc., all without the kind of public fight associated with activists.

 

Jana’s campaign will amplify the quieter grumblings of other Whole Foods shareholders. Mutual-fund giant Neuberger Berman, which owns about 2.4% of Whole Foods, has been privately pushing for faster change at the company, The Wall Street Journal has reported. The firm has complained that the chain hasn’t fully capitalized on its popularity among millennials or prepared foods sales, areas where it bests its rivals.

To be sure, investors are not happy with the stock's performance: "some say that while the company is taking the right steps, it’s moving too slowly to catch up to rivals that are years ahead in retail technology and customer management. They’ve indicated that management had to perform this year or risk a louder uprising this fall."

“We think [Whole Foods] needs to move from a growth phase to an efficiency phase,” UBS analysts wrote in tagging the company with a sell rating last month. “The entrepreneurial culture that served it well in its growth mode now needs to be more process-oriented. That can be a rough transition.”

At Whole Foods’ annual meeting in February, the board was re-elected but faced a high protest vote. Two directors got around 85% support and an advisory vote on executive compensation got 84%, levels that signal investor angst.

At the end of the day, however, a transformation at WFM may be out of management's hands, especially if the upwardly mobile consumer class has seen its discretionary income swallowed by spending on such mandatory outlays as Obamacare, or has been eating up by inflation and the occasional iPhone. In any case, with a relatively modest net debt load, one thing is certain in WFM's future: a surge in stock buybacks, all else equal.

• Tillerson: Russia Should Give Up ‘Unreliable Partner’ Assad (BBG)
• U.S. tries to line up West, Mideast against Assad (Reuters)
• United Airlines under fire after passenger dragged from plane; officer put on leave (Reuters)
• Tillerson carries Syria stance to Moscow as Trump assumes West's leadership (Reuters)
• Investors Dump French Assets as Presidential Race Opens Up (WSJ)
• Why Bond Bears Look Poised to Come Out of Hibernation...Again (BBG)
• North Korean ships head home after China orders coal returned (Reuters)
• 142-Year-Old Japanese Giant Toshiba Warns It May Not Survive (BBG)
• Commercial-Property Lending Falls as Investors Pull Back (WSJ)
• Qualcomm hits back at Apple's lawsuit, accuses iPhone maker of false statements (Reuters)
• U.K. Grocers Secretly Squeeze Customers as Brexit Bites (BBG)
• Chinese cities restrict home sales by buyers to fight speculation (Reuters)
• Pipeline Built to Survive Extremes Can’t Bear Slow Oil Flow (BBG)
• Secret Recordings Play Role in SEC Probe of Insurer AmTrust (WSJ)
• Yuan firms as dollar retreats; Macquarie forecasts no depreciation this year (Reuters)
• U.S. judge finds Texas voter ID law was intended to discriminate (Reuters)
• Sorry America, Your Taxes Aren’t That High (BBG)
• Banks scramble to fix old systems as IT 'cowboys' ride into sunset (Reuters)
• London Police Acted Illegally in Russia Cash Seizure, Court Says (BBG)
• Toshiba files earnings without auditor endorsement, delisting risk rises (Reuters)
• Grains piled on runways, parking lots, fields amid global glut (Reuters)

Overnight Media Digest

WSJ

- The Trump administration held out the prospect Monday of wider retaliation against Syria and signaled a new push to remove the country's divisive leader ahead of Secretary of State Rex Tillerson's meetings with Damascus's Russian allies. http://on.wsj.com/2otHpQN

- Activist investor Jana Partners has amassed a nearly 9 percent stake in Whole Foods Market and wants the upscale organic grocer to speed up its turnaround efforts while also exploring a possible sale. http://on.wsj.com/2otWSjJ

- A new report on the sales scandal at Wells Fargo places much of the blame on former CEO John Stumpf and his protégée, Carrie Tolstedt. The board clawed back an additional $75 million of pay from the two former executives. http://on.wsj.com/2otHDY9

- Barclays Chief Executive Jes Staley is under investigation by UK and U.S. regulators after he tried to unmask a whistleblower who criticized his hiring of a longtime associate for a top job. http://on.wsj.com/2otWW2Z

- United Airlines drew widespread criticism for having a passenger forcibly removed from a flight, an incident that threatens to further damage the reputation of an airline recovering from a proxy fight and leadership upheaval. http://on.wsj.com/2otME2N

- A surge in Tesla stock gave it the title of largest U.S. auto maker by market value - a feat that would have seemed highly improbable 13 years ago when the electric-car maker first began tinkering with the idea of making a sports car. http://on.wsj.com/2otI4BL

- A new cancer drug licensed by Eli Lilly was discovered by a six-year-old startup on the outskirts of Shanghai, and derived from the ovary cells of Chinese hamsters. Lilly now is planning to test it on Americans. http://on.wsj.com/2otJtZ6

- Foxconn Technology offered up to $27 billion for Toshiba Corp's computer-chip business, another bold bid for a pillar of Japan's high-tech industry. http://on.wsj.com/2otXLc5

FT

*Attempts to break political deadlock in Northern Ireland have failed again ahead of an Easter deadline to restore the province's power-sharing arrangement between unionists and republicans.

*The National Health service is planning loans from hedge funds to pay for new buildings and equipment because of public spending cuts.

*Britain saw the biggest drop in retail sales, excluding food, in nearly six years in the first quarter of 2017. Retail sales dropped by 0.8 percent in value over the period compared to a year earlier, according to released figures from the British Retail Consortium on Tuesday.

NYT

- Jana Partners, the activist hedge fund founded by Barry Rosenstein, criticized Whole Foods Market's brand development, customer service and distribution strategy, and nominated four candidates for the company's board. http://nyti.ms/2otz67G

- The British authorities are investigating Barclays and its American chief executive, James Staley, after he admitted to trying to learn the identity of the author of an anonymous letter. http://nyti.ms/2otKdgW

- Wells Fargo said on Monday it would claw back an additional $75 million in compensation from the two executives on whom it pinned most of the blame for the company's scandal over fraudulent accounts: the bank's former chief executive, John Stumpf, and its former head of community banking, Carrie Tolstedt. http://nyti.ms/2otAHuf

- Adding to this year's flurry of law firm combinations, Boies Schiller Flexner said on Monday it would take the West Coast litigation firm Caldwell Leslie & Proctor under its wing starting next week. http://nyti.ms/2otBzPt

- In the latest move by a major automaker to enhance its American manufacturing operations, Toyota said it would invest more than $1.3 billion to upgrade its assembly plant in Kentucky. http://nyti.ms/2otI0lD

Canada

THE GLOBE AND MAIL

** Bombardier Inc confirmed that it will make two changes to its executive compensation package for 2016 in line with requests made over the past week by its senior leadership. https://tgam.ca/2p0v07z

** A fund founded by Adam Waterous, the former Bank of Nova Scotia investment banker, has acquired two-thirds of Northern Blizzard Resources Inc for C$244 million ($183 million), putting more Canadian oil assets back in domestic hands. https://tgam.ca/2p0uZQW

** The federal government will table a bill to legalize recreational marijuana on Thursday that is expected to tightly control the ability of producers to market their products to the public, federal sources said. https://tgam.ca/2p0w4Zc

NATIONAL POST

** Overseas media were abuzz Monday with reports that Scotland would be home to the first standalone Tim Hortons location in the UK. http://bit.ly/2p0HvA8

** Canadian miner Gran Colombia Gold Corp has filed a $700 million lawsuit against Colombia under the Colombian-Canadian free trade agreement after the government ordered the company to cease operations at the El Burro site in Marmato until it has further consulted with local residents. http://bit.ly/2p0vISm

** Canada Mortgage and Housing Corp announced Monday that housing starts reached their highest level since September 2007, a development the Crown corporation said was a response to market demands. http://bit.ly/2p0wMp8

Britain

The Times

Regulators in Britain and the United States are investigating Barclays Plc Chief Executive Jes Staley's attempts to identify the whistleblower who raised concerns about Tim Main, a former colleague at JPMorgan Chase & Co. http://on.wsj.com/2okLpTf

Anglo-Australian mining group BHP Billiton Plc has rejected calls from activist investor Elliott Advisors to overhaul its dual-listed structure and spin off its U.S. oil business. http://bit.ly/2ol11pJ

The Guardian

Britain's retailers suffered a third consecutive month of falling sales in March, according to industry figures that add to evidence that a post-referendum rise in living costs is denting consumer spending. http://bit.ly/2okTYNG

Fashion chain Jaeger has collapsed into administration, putting 680 jobs at risk. The brand, which dressed Audrey Hepburn and Marilyn Monroe in its heyday, had been trying to find a buyer to keep its 46 stores going, but its owner threw in the towel on Monday and appointed administrators. http://bit.ly/2ol6HzZ

The Telegraph

The 129 million pounds ($160.26 million) fine imposed by the Serious Fraud Office against Tesco Plc has been approved by Southwark Crown Court following an investigation into the retailer's accounting scandal in 2014. http://bit.ly/2ol3Eb9

Tom Hayes, the first trader to be convicted for Libor rigging, has called for a public inquiry to be launched after a recording of a telephone call emerged suggesting the Bank of England was involved in manipulating the key financial benchmark. http://bit.ly/2okMMRY

Sky News

Travelodge has announced plans to open 60 hotels in UK over three years, as it looks to capitalise on potential opportunities in the wake of the Brexit vote. http://bit.ly/2okU9bU

Kadcyla, a breast cancer drug which could shortly be withdrawn in England, has been approved for use on the NHS in Scotland. Campaigners claim more than a hundred women a year could benefit from the drug in Scotland. http://bit.ly/2okUZWk

The Independent

Canadian fast food chain Tim Hortons is opening its first UK branch in Glasgow next month. The company has plans to expand its franchised outlets across UK over the coming year. http://ind.pn/2ol2YCI

When describing the logic behind Amazon's blockbuster acquisition of Whole Paycheck Foods, a deal that made the "greedy bastards" over at Jana Partners $400 million richer in just a few months, Credit Suisse analyst Stephen Ju explained that he views this acquisition as "an offensive expansion move to accelerate its progress in the largest consumer spend category. In other words, Amazon is paying roughly 3% of its enterprise value for an improved position in an addressable segment that amounts to ~$1.6 trillion according to the US Dept. of Agriculture’s ERS, especially as progress at Amazon Fresh (in terms of regional rollout) has been admittedly slower than we expected."

He may be correct in the long-run but in the medium-term, Amazon Foods faces major hurdles, including a significant slowdown in how much Americans spend at food and beverage stores...

... and the arrival of German mega-discounters Aldi and Lidl on US soil, eager to steal market share by offering products below cost, already prompting a panicked response by the likes of Walmart (see "The Germans Are Coming... And Their Groceries Will Cost Up To 50% Less Than Wal-Mart").

But the biggest risk facing the combined company in the short-term is the same one that follows every acquisition: "synergies" and how these will change the corporate culture at Whole Foods. In his letters to employees, this is what Whole Foods CEO John Mackey said:

Dear Team Members,

 

Today marks the beginning of an incredible new chapter in Whole Foods Market's history. In my nearly 39 years as co-founder and CEO, I could have never dreamed of this happening, but I am excited to announce that Whole Foods Market has entered into an agreement to merge with Amazon at a terrific value for our shareholders.

 

This partnership presents an incredible opportunity to take Whole Foods Market's mission and purpose to new levels and best positions our company and our Team Members for future success.

 

* * *

As you know, we are in a metamorphosis phase. While everyone processes change differently, this is an exciting new step to fulfill our higher purpose. Together, we have built an amazing company and have positioned ourselves to deliver outstanding value for Whole Foods Market shareholders -- which includes many of you.

But not all, and as Bloomberg reports the initial step in the integration will be wholesale "cost-cutting", i.e., mass layoffs to boost margins in what is already a cutthroat industry. Jeff Bezos "will try to keep the grocer’s reputation for premium fresh foods while cutting prices to shed its "Whole Paycheck" image." To do that, "Amazon expects to reduce headcount and change inventory to lower prices and make Whole Foods competitive with Wal-Mart Stores Inc. and other big-box retailers, according to a person with knowledge of the company’s grocery plans. That includes potentially using technology to eliminate cashiers."

As a result, Whole Foods employees are on edge about the monumental changes about to take place and as Reuters adds, some employees "expressed fears ranging from layoffs to the loss of their laid-back corporate culture."

They have good reason to be worried, because what comes next is a wholesale deflationary replacement of the existing labor force with "robots and drones."

Carmen Clark, 37, a six-year employee at a store in Mount Pleasant, South Carolina, said some workers worry that Amazon-led automation could lead to job cuts. "Everybody's been kind of joking that it's going to be robots and drones," Clark said of potential changes from Amazon, which uses robots in its warehouses and is testing drones for delivery.

For now, Clark said she is giving Amazon the benefit of the doubt. "I have purchased from Amazon for five years. It's a good company," she said.

And she is right... if referring to consumers and shareholders. For employees it will be vastly different: Amazon is said to be considering extending the cost-cutting effort with the no-checkout technology it’s developing at its Seattle convenience store, “AmazonGo,” according to Bloomberg. The technology lets people pay with smartphones without seeing a cashier or going to a checkout kiosk, which would help Amazon differentiate itself in the brick-and-mortar setting and reduce labor costs at Whole Foods stores. The employees remaining would help improve the shopping experience, while terminating many of the company's existing workers.

It is those same workers that Reuters approached for interviews in California, New York, Illinois, South Carolina and Rhode Island. While many said they had been told by managers not to speak to reporters, some expressed their concerns:

Some workers at the nonunion grocery chain wondered whether Amazon, known for its hard-driving culture, would mean big changes to their pay, benefits or employment. "I think that they are a very profit-driven company, so there might be some streamlining as far as labor,"said Sasha Hardin, 28, of the Mount Pleasant store, who has been with Whole Foods for 6-1/2 years.

 

A Los Angeles deli worker in his 30s, who is expecting his first child this summer, is worried about layoffs. "I want to keep working," said the worker, who did not want his name used.

 

Whole Foods has a corporate culture that prizes inclusive decision-making, such as allowing workers to vote on benefits every three years and disclosing executive pay.  "I've heard that Amazon's culture is really cutthroat. That worries me," one bagger at a Providence, Rhode Island, store said.

Another major question is how the cultural change will impact the shopping experience, and whether it will accelerate what is already its worst sales slump since going public in 1992. Speaking to Reuters, at least one customer was concerned that an Amazon purchase would further distance Whole Foods from its roots as a purveyor of premium, organic and specialty foods.

"This store has become a money-making machine," said Tony Castro, a 40-year-old private chef, who shops daily in Whole Foods' sprawling downtown Los Angeles store.

Ironically, none other than CEO Mackey predicted failure for Amazon as it tried to enter the grocery space: two years ago, Mackey predicted imminent doom for rival Amazon in the fiercely competitive grocery business. "Amazon Fresh is their Waterloo," said Mackey, known paradoxically both for his earthy passion for organic foods and his imperious business swagger. "What’s the one thing people want? Convenience. You can’t do that with distribution centers and trucks."

* * *

But no matter whether Bezos' gamble on "bricks and mortar" pays off, two things are certain: between the aggressive push by Germans to steal existing market share, and Amazon's disruptive, "price-cutting" entry into the grocery sector, prices across the industy are set to slide, resulting in yet another deflationary impulse hindering the Fed's tightening efforts, as noted yesterday:

Between Lidl and Amazon Foods, the Fed may want to revise its food deflation forecast

— zerohedge (@zerohedge) June 16, 2017

The other sure thing is that while the company's employees count the days until the pink slip arrives, shareholders stand to reap the profits. As CEO Mackey said, "we have positioned ourselves to deliver outstanding value for Whole Foods Market shareholders." And none more so than the "greedy bastards" whom Mackey was blasting just a fey days prior.

As for Bezos' ultimate vision, Bloomberg sums it up best:

The deal is stunning many of Amazon’s closest observers and then, upon a moment’s reflection, finding a comfortable place in their understanding of the limitless ambitions and wily determination of Bezos, the world’s second-wealthiest man. In a sense, the surprising deal is preordained by his mission to construct the everything store: A company that delivers everything to everyone, at the best possible price and within the shortest amount of time.

In other words the creation of a monopoly unseen since the Gilded Age, and one in which the Trump adminitration may have a final say.

The US hedge fund industry is in rough shape as the Federal Reserve’s lift-all-boats monetary policy has made it increasingly difficult to beat the market. US hedge funds endured nearly $100 billion in redemptions last year, as only 30% of US equity funds beat their benchmarks. But as confidence in traditional stock pickers dwindles, so-called “event-driven” funds are attracting renewed interest in investors, particularly in Europe, where near-zero rates and relatively attractive valuations are expected to stoke a boom in M&A activity,Bloomberg reports.

After these funds experienced some high-profile stumbles in recent years – one such fund managed by John Paulson’s Paulson & Co.posted a 49% loss and endured billions of dollars in redemptions – some Europe-based funds are seeing billions in inflows. Kite Lake Capital Management, Everett Capital Advisors and Melqart Asset Management have garnered billions in fresh investor capital over the past two years.

“Kite Lake Capital Management almost doubled client assets this year, while Everett Capital Advisors nearly tripled its funds since launching in January 2016. The money overseen by Melqart Asset Management has grown 12-fold since the firm started less than two years ago.

 

The three event-driven funds have $1.5 billion in combined assets and invest across Europe, where an increasingly buoyant economy and record-low interest rates are boosting dealmaking. Their resurgence is part of a comeback effort by a hedge-fund industry that’s only now starting to recover from a wave of investor redemptions and years of disappointing returns.

 

'We like event-driven because there are lots of opportunities for them,’ said Philippe Ferreira, a strategist at Paris-based Lyxor Asset Management, which oversees $135 billion and is looking to increase its exposure to the strategy. Strong M&A volumes are rather good for merger arbitrage. They also have increased exposures to financials, which benefit from monetary policy normalization."

According to data from HFR via Bloomberg, event-driven funds returned on average 10% last year, more than twice the gains of the broader industry, and another 4 percent in the first five months of 2017. These gains occurred as the M&A failure rate was cut in half over the past 12 months, when US regulators opposed high-profile deals in the health-care, pharmaceuticals and telecom industries.

“This is luring investors back, particularly in Europe, where corporate earnings, faster growth and reduced political risk following elections in France helped boost European M&A volumes to $508 billion this year, up 14 percent from the same period of 2016. Transactions include Johnson & Johnson’s takeover of Swiss drugmaker Actelion Ltd.

 

Melqart said its assets have grown to $500 million from a launch size of $40 million in October 2015, with the fund making 48 percent for investors.

 

Kite Lake, which returned 13 percent last year, oversees about $625 million, up from $355 million in December, according to a company official. And the Everett Opportunities Fund said it’s getting closer to achieving the $550 million level at which it plans to shut to new money. The hedge fund made 10 percent for investors last year.”

Still, despite the rosy outlook, investors have continued to pull money from M&A-focused funds this year – though the pace of outflows has slowed somewhat. Investors pulled less than $4 billion from event-driven funds during the first four months of 2017, compared with about $60 billion over 2015 and 2016. Meanwhile, the number of new funds being launched rose during the first quarter for the first time in 12 months. The industry has attracted net inflows of $12 billion so far this year, helping push the AUM of hedge funds globally to a record $3.1 trillion.

Indeed, it seems the industry is beginning to recover after the industry saw its largest outflows last year since 2009 - making 2016 only the third year on record where investors pulled more capital than they allocated.

Bloomberg claims that the picture for event-driven funds outside Europe is somewhat less rosy as US merger volumes fall nearly 11 percent to $751 billion, following two strong years where companies spent trillions on M&A. Yet some US funds are already reaping hundred-million-dollar paydays from their merger bets. Amazon’s purchase of Whole Foods Market was a coup for activist hedge fund Jana Partners,which owns nearly 10% of WFM. After that highly publicized windfall, we wouldn’t be surprised if investors start asking their money managers to explore similar strategies.