The Best And Worst Performing Assets In October And YTD

The torrid October, with its historic S&P500 point rally, is finally in the history books, and at least for a select group of hedge funds such as Glenview, Pershing Square and Greenlight and certainly their L.P.s, a very scary Halloween couldn't come fast enough, leading to losses between 15% and 20%. How did everyone else fare? Below, courtesy of Deutsche Bank's Jim Reid, is a summary of what worked in October (and YTD), and what didn't.

Frontrunning: November 2

  • Baffle with BS: German Bonds Decline Along With Peers as Draghi Cools QE Talk (BBG)
  • And yet... ECB's Nowotny says low inflation forces ECB to act (Reuters)
  • Stocks fall on China data, but stronger euro zone lifts gloom (Reuters)
  • Global factories struggle as stimulus fails to spur (Reuters)
  • Russian airline rules out technical fault, pilot error in Egypt crash (Reuters)
  • Turkey returns to single-party rule in boost for Erdogan (Reuters)

Goldman Downgrades Valeant On "Lack Of Confidence" After Charlie Munger Slams Company

A bigger problem for Valeant, however, emerged today when none other than Warren Buffett's right hand man Charlie Munger in an interview with Bloomberg "tore anew into the besieged drug company, calling its practice of acquiring rights to treatments and boosting prices legal but “deeply immoral” and “similar to the worst abuses in for-profit education.”  And to prove just how much clout Munger does indeed have, moments ago the most important Wall Street bank, Goldman Sachs, downgraded Valeant to Neutral from Buy, cutting its share price target from $180 to $122.

Futures Rebound From Overnight Lows On Stronger European Manufacturing Surveys, Dovish ECB

On a day full of Manufacturing/PMI surveys from around the globe, the numbers everyone was looking at came out of China, where first the official, NBS PMI data disappointed after missing Mfg PMI expectations (3rd month in a row of contraction), with the Non-mfg PMI sliding to the lowest since 2008, however this was promptly "corrected" after the other Caixin manufacturing PMI soared to 48.3 in October from 47.2 in September - the biggest monthly rise of 2015 - and far better than the median estimate of 47.6, once again leading to the usual questions about China's Schrodinger economy, first defined here, which is continues to expand and contract at the same time.

The Military-Industrial Complex's Latest Best Friend - Barack Obama

The Pentagon just won another small skirmish in its long war with Social Security and Medicare. That is the unstated message of the budget deal just announced gleefully by congressional leaders and the President.  To understand why, let’s take a quick trip down memory lane.

PBOC Fixes Chinese Yuan Higher By 0.54%, Most Since 2005

As per the fixing limits established as part of the August 11 Yuan devaluation, moments ago the PBOC announced that it had set the Yuan at a USDCNY fixing of 6.3154, a strengthening of a massive 0.54% - the most since 2005 - following the manic end of trading PBOC intervention on Friday that sent the Yuan soaring some 300 pips from 6.3475 to 6.3175.

Putin's Approval Rating Reaches A New High

Vladimir Putin’s approval rating in Russia has soared to yet another all time high; leaving all those who don’t like Putin or were hoping for some sort of regime change in Russia continue to be out of luck. One reason why we are even posting about this is that the Western press has also reported on the event, employing a somewhat less neutral tone of voice. What makes the sour grapes style reporting in the Western media especially funny is that while it is true that the Kremlin exerts extraordinary influence on the media in Russia, one wonders in what way their reportage on Syria is different from the reporting in the happily self-censoring US mainstream media on the Iraq war, especially in the run-up to said war.

Confusion: US Equities Drift Lower (China Higher), Yuan Surges & Purges As China Manufacturing Misses (And Beats)

Confusion reigns... China's Manufacturing PMI is in contraction according to both the Official and Markit/Caixin measures (but the former was flat and missed while the latter rose and beat "confirming economic stability" according to the 'official' press). Following the largest strengthening fix for the Yuan in 10 years, both the onshore and offshore Yuan are weakening by the most since the August devaluation. Finally, having cliff-dived at the open, Chinese stocks have bounced back to unchanged on the Ciaxin PMI beat (but US equities drift lower still).

Peak Unicorn

Things are getting crowded in the once-exclusive unicorn club...