Five Things You Need to Know to Start Your Day
Want to receive this post in your inbox every morning? Sign up here.
Jackson Hole kicks off, hedge funds lose traction, and it's very, very quiet out there. Here are some of the things people in markets are talking about today.
The Kansas City Fed's annual symposium in Jackson Hole, Wyoming kicks off today. For markets, the main event comes tomorrow, when Fed Chair Janet Yellen delivers an address titled "The Federal Reserve's Monetary Policy Toolkit" with every word likely to be examined for hints as to the central bank's rate path for the rest of the year. Currently, odds of a rate rise by the end of the year, as implied by the futures market, stand at 53.0 percent, meaning investors still see it as effectively a coin flip.
Hedge fund losses
Investors pulled an estimated $25.2 billion from hedge funds in July according to an eVestment report, the largest monthly redemption since February 2009. 2016 is now on track to become only the third year on record to see net outflows. Fund performance is the obvious catalyst for the drawdown, with industry-wide performance an average 1.2 percent gain ytd, while the S&P 500 returned about 7.6 percent. Hardly any wonder then, that people are warming to passive investments.
Short oil at $50
The new chief executive officer of Phibro LLC recommended shorting West Texas Intermediate at $50 to $55 a barrel as he said the rally is unlikely to last. He says the OPEC meeting in Algiers next month probably won't lead to an agreement to cut production and that the market fundamentals remain bearish. A barrel of WTI for October delivery traded at $46.86 at 6:14 a.m. ET.
The MSCI Asia Pacific Index rose 0.1 percent overnight, with volatility dropping to the lowest level since 2012. Japan's Topix index closed 0.2 percent lower. In Europe, the Stoxx 600 Index was down 0.8 percent at 6:14 a.m. ET, with almost all industry groups falling after a German business sentiment report disappointed. S&P 500 futures were flat.
It's quiet out there
What we've been reading
This is what's caught our eye over the last 24 hours.
- More and more economic datapoints have completely erased the financial crisis.
- Three charts show why the Swiss love negative rates.
- Top currency strategy of 2016 turns perilous as risks rise.
- Productivity in the U.S. looks bad, but it's golden compared with global peers.
- We're paying CEOs all wrong.
- Apple's Cook reaped $373 million in stock in five years as CEO.
- Are traders allowed to front-run customer orders in the Treasury market?