Monday Morning Reads

Monday Morning Reads






Seekingalpha Wall Street Breakfast:


Renaissance hedge funds hit with $5B in redemptions

Jim Simons' Renaissance Technologies has seen at least $5B in redemption since the start of December, Bloomberg reports, citing investor letters. Clients withdrew a net $1.85B from the three hedge funds in December, called for $1.95B in January and are set to pull $1.65B this month.

Background: The quant-based public hedge funds posted double-digit losses last year. Renaissance told clients in September it was under-hedged during the March plunge and over-hedged when stocks recovered. Its fund for employees and insiders, though, jumped 76%, Institutional Investor reports.

Fund's origin: Renaissance, the world's largest quantitative hedge fund firm, was founded in 1982 by Simons, a former codebreaker for the National Security Agency. He announced last month that he's stepping down as chairman of the firm, which managed ~$60B at the time. He'll stay on the board.

On the other side of the spectrum: China's hedge funds returned 30% on average last year, according to Shenzhen PaiPaiWang Investment & Management Co., Bloomberg reports, dwarfing the average 12% gain for hedge funds globally. China's hedge landscape is made up of almost 15,000 tiny hedge funds and their outperformance is making it difficult for foreign firms, such as Bridgewater Associates, and Two Sigma, to operate in the country. (43 comments)

South Africa halts rollout of AstraZeneca's COVID-19 jab

South Africa suspends plans to vaccinate front-line health care workers with the Oxford-AstraZeneca (AZN) vaccine after it failed to prevent mild to moderate illness from the COVID-19 strain that's dominant in the country. South Africa received its first 1M doses of the AZN's vaccine last week and was expected to start administering the vaccine in mid-February.

Official's statement: "The AstraZeneca vaccine appeared effective against the original strain, but not against the variant," Health Minister Zweli Mkhize said. "We have decided to put a temporary hold on the rollout of the vaccine... more work needs to be done."

What's next: Early results from Moderna (MRNA) suggest its vaccine is still effective against the South Africa variant. Developers of the Oxford-AstraZeneca vaccine are expected to have a modified version to cope with the South Africa coronavirus variant by autumn. (3 comments)
Go Deeper: SA contributor Retirement Pot doesn't see AZN's vaccine creating much shareholder value.

The SPAC beat goes on

Elliott Management, the hedge fund led by Paul Singer and best known for its activist campaigns, has been meeting with bankers as it considers raising more than $1B for a special-purpose acquisition company, the WSJ reports, citing people familiar with the matter. The process is at an early stage and plans could still change, they said.

He'd join a group of other activists that have already started SPACs, such as Bill Ackman's Pershing Square Tontine Holdings (PSTH) and Jeff Smith's Starboard Value Acquisition (SVAC).

Meanwhile SoftBank (OTCPK:SFTBYfiles for two more so-called blank-check companies — SVF Investment Corp. 2 and SVF Investment Corp 3, following its initial SPAC, SVF Investment Corp. (SVFAU), whose stock has jumped nearly 12% since its Jan. 8 IPO. (10 comments)

Kia, Hyundai aren't in talks with Apple on self-driving EV

Hyundai Motor (OTCPK:HYMLF) shares fall 6.2% and Kia Motors (OTCPK:KIMTF) shares fell almost 15% in South Korea after Hyundai made a statement to clarify "rumors" regarding a joint effort with Kia to work with Apple (AAPL) on developing an autonomous electric car. Hyundai said its various discussions about self-driving electric cars are in early stages, with no decisions made at this point.

On Feb. 3, Kia Motors shares jumped 10% in South Korea on local reports that Apple would invest KRW 4T ($3.6B), as part of a collaboration with the carmaker to build electric vehicles.

Expect to hear about EV development from Ford (F) on Tuesday when its executives participate in a fireside chat hosted by JPMorgan Securities. (81 comments)

What else is happening...

U.S. stock futures gain after Yellen promotes Biden's fiscal plan.
Renesas (OTCPK:RNECFto buy Dialog Semiconductor (OTCPK:DLGNF) for $5.9B.
China hits Vipshop (NYSE:VIPS) with 3M-yuan fine.
Veolia (OTCPK:VEOEY) goes hostile in bid to buy out Suez (OTCPK:SZEVY).
Jittery Ethereum (ETH-USDtraders lighten up ahead of CME futures launch.

Today's Markets

In Asia, Japan +2.1%. Hong Kong +0.1%. China +1.0%. India +1.3%.
In Europe, at midday, London +0.8%. Paris +0.6%. Frankfurt +0.1%.
Futures at 6:20, Dow +0.3%. S&P +0.3%. Nasdaq +0.3%. Crude +1.2% to $57.55. Gold +0.01% at $1815.10. Bitcoin +0.1% to $39383.
Ten-year Treasury Yield +1.9 bps to 1.189%

Today's Economic Calendar

12:00 PM Fed's Mester Speech
12:30 PM Investor Movement Index

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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