Posts by Julia La Roche

Wall Street is preparing clients for a Trump presidency

Investors must “seriously consider” what a Donald Trump presidency could mean for the US economy, Nomura’s chief US economist and former Treasury Department official Lewis Alexander writes in a new note to clients.

At this point, it’s almost certain the 2016 election for the White House will be between Trump, the presumptive Republican nominee, and former Secretary of State Hillary Clinton, the Democratic front-runner.

According to Alexander, a Clinton presidency would seem “to offer a degree of continuity in economic policy.” Trump, on the other hand, is an “unknown.”

“We think the heightened uncertainty over economic policy associated with a potential Trump presidency could adversely affect both financial markets and the real economy,” Alexander writes.

In the note, Alexander points out that Trump hasn’t laid out a detailed economic plan. He doesn’t have a well-known group of economic policy advisors. He also doesn’t have a record as a policymaker.

Instead, Trump has made narrowly focused statements primarily on immigration and trade, arguing that those policies have resulted in low wages and few job opportunities for Americans at the benefit of other countries.

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Nike faces 3 big competitive headwinds

Morgan Stanley analysts downgraded Nike’s stock on Wednesday.

In a new note, Morgan Stanley analyst Jay Sole cut his rating from overweight to equal-weight and reduced his price target for the stock by to $60 from $69.

He gave the following reasons for the downgrade:

“Together, these factors create a stiffer headwind for Nike than it has felt in years,” Sole wrote.

Following the report, shares of Nike (NKE) were last trading down 1.2% at $54.55.

Meanwhile, Morgan Stanley remains underweight on Under Armour. The bank’s European brands team recently upgraded Adidas to equal-weight.

On Tuesday, Under Armour cut its sales guidance on the heels of the bankruptcy of Sports Authority. On the heels of that revised guidance, Credit Suisse downgraded Under Armour’s stock to neutral and reduced its price target from $38 to $35.

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Julia La Roche is a finance reporter at Yahoo Finance.

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Raoul Pal: The stock market is behaving the way it did back in 2000

Wall St CEO circulates memo with 5 things veteran employees can learn from interns

It's June 1st and that means a new crop of interns will be starting their 10-week summer programs on trading floors and investment banking and research desks across Wall Street.

In anticipation for their arrival, Richard Handler, the CEO of investment bank Jefferies (LUK), sent out a memo on Wednesday morning to the bank’s veteran employees reminding them what they can learn from their 130 summer analysts and associates.

“It might seem logical and smart to discuss what we seasoned and experienced professionals can teach these newbies over the next 8-10 weeks.  Then again, it might be more important to anticipate and reflect upon what we can learn from them.  Let’s all have our eyes, ears, and minds truly open,” Handler wrote.

In the letter, Handler outlined five possible lessons.

For starters, the youthful faces arriving on Wall Street this week are among the best and the brightest of their peers. They worked hard to land the internships. They're also eager to learn and want to add value without being incentivized by a fee or a commission.

Here's an excerpt of the five lessons from the memo:

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Ex-banker charged with insider trading after giving plumber friend nonpublic info in exchange for bathroom remodel

A former Barclays investment banker was arrested and charged with insider trading on Tuesday after he allegedly shared non-public information with his plumber buddy in exchange for remodeling his bathroom and gym bags of cash.

Steven V. McClatchey, a 58-year-old resident of Freeport, New York, is accused of providing nonpublic information for M&A deals involving at least 10 companies — including PetSmart, Questcor Pharmaceuticals, and Omnicare — to Gary J. Pusey, a 47-year-old plumber from Mineola, New York, the SEC and the DOJ allege.

The relationship between the investment banker and the plumber began sometime around 2011 or 2012, the civil and criminal complaints said. They first met at the Yachtsmen Cove Marina in Freeport where they both had fishing boats of the same make and model docked next to each other.

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A bunch of hedge funds are cashing in big on the Celator drug deal

Dublin-based Jazz Pharmaceuticals (JAZZ) agreed on Tuesday to buy Ewing, New Jersey-based Celator Pharmaceuticals for $30.25 per share, a deal valued at approximately $1.5 billion.

Shares of Celator (CPXX) rose more than 70% following the announcement and were last trading around $29.93.

The relatively small biotech M&A deal is a nice win for a bunch of hedge funds who piled into the stock earlier this year.

Celator Pharmaceuticals ranked No. 1 on Goldman Sachs’ list of stocks with “the largest increase in hedge fund concentration” during the first quarter. According to Goldman, 18 of the 841 hedge funds the bank tracks owned the stock.  What's more is data compiled by WhaleWisdom, a site that monitors hedge fund regulatory filings,shows that 58 funds own the stock with 43 of those funds initiating a new position in the first quarter.

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Hedge fund manager: A recession would 'ironically' help young people find jobs

London-based hedge fund manager Crispin Odey laid out a depressing scenario in his latest investor update.

In order for things to get better, especially for young people looking for jobs, we need to have a recession. This recession would be the result of central banks tightening monetary policy by raising interest rates.

“Nobody wants a recession but sometimes recessions can be better than the alternative policies which not only destroy incentive structures but also, create wrong price signaling, which in fact creates more mayhem as production reacts to misleading signaling, and ultimately leads to governments becoming even more involved in life of the economy. Having witnessed several years in which companies used cheap debt to buy back expensive equity, expect that in a few years’ time companies will be doing the reverse,” Odey wrote in his fund’s April performance report seen by Yahoo Finance.

He also pointed out that the debate has now moved to “just how long policies can support the current status quo?”

-- Julia La Roche is a finance reporter at Yahoo Finance.

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One of the most concentrated hedge fund bets is getting crushed

Popular hedge fund stock Signet Jewelers (SIG), the owner of mall stores Kay Jeweler’s, Zales, and Jared The Galleria of Jewelry, is getting crushed after the company’s disappointing earnings results.

The company reported earnings results for the first quarter ended April 30 that missed on revenue expectations. The company also reaffirmed downbeat guidance for 2017.

In addition, Signet said that it has engaged Goldman Sachs as it "conducts a strategic evaluation" of its credit portfolio.

Signet's stock was last down 8.6%, or down $9.31, at $99.06 per share in mid-day trading. The stock has fallen more than 19.9% this year.

Signet Jewelers ranked No. 4 on Goldman Sachs' twenty “most concentrated” hedge fund holdings as of March 31. The company, which has a market cap of $8 billion, has about 24% of its stock owned by hedge funds, according to Goldman.

Julia La Roche is a finance reporter at Yahoo Finance.

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Credit Suisse just lost 3 more tech investment bankers

Three more Credit Suisse (CS) technology investment bankers have departed the Swiss bank’s San Francisco office, Yahoo Finance has learned.

Wally Cheng, who specializes in semiconductor mergers and acquisitions, is joining Morgan Stanley as a managing director in San Francisco focused on technology M&A investment banking, one person familiar with the matter said.

While at Credit Suisse, Cheng worked on large M&A deals including NXP/Freescale and Avago/Broadcom.

Cheng, who left Credit Suisse in February, was a key lieutenant of Anthony Armstrong, the former cohead of Americas M&A for Credit Suisse who was poached by Morgan Stanley in October to lead the firm's tech M&A.

Two Wall Streeters pummeled each other on Thursday for charity

On Thursday evening, a crowd of nearly one-hundred Jefferies employees, clients, friends and family filled the Boston House of Blues to watch one of the investment bank’s very own fight for a great cause.

John Cronin, a managing director leads Jefferies’ Boston-based equities business, made his amateur boxing debut at a charity event organized by Haymakers for Hope, an organization that raises money for cancer research.

Jefferies CEO Richard Handler, who’s based in New York, along with a group of 35 other NYC-based employees made the trip up to Boston to cheer on their colleague. The entire Boston office showed up as did the firm’s global heads of equity, equity trading and equity sales. A number of Jefferies’ clients, including Wellington, Putnam, FMR, Folger Hill, US Trust, Eventide, Monashee, Pioneer and Adage, also turned out for the big fight.

“There are many words that can be used to describe our very own Boston based John Cronin. Strong willed, loyal, dedicated, fair, tenacious, but most of all, relentless,” Handler wrote in a memo to employees seen by Yahoo Finance.

The third round ended after two minutes of throwing punches.

Ray Dalio: More than anything else, I attribute my success to one thing

Billionaire Ray Dalio, the founder of $160 billion hedge-fund behemoth Bridgewater Associates, says that Transcendental Meditation has been “the single biggest influence” on his life.

Dalio,  66, is considered the most successful hedge fund manager of all time. He’s been practicing Transcendental Mediation for more than 40 years.

“When I look back at my life, I am happy to have had what most people would consider a successful life, not only in terms of business, but in my relationships and in lots of ways.  More than anything else, I attribute it to meditation—partially because of the creativity, partly because of the centeredness.  TM has given me an ability to put things in perspective, which has helped a lot.  I think meditation has been the single biggest influence on my life.”

Rosenthal describes the “Super Mind” as “an experience of not only heightened aptitude and problem-solving ability, but also a state of emotional sensitivity, empathy, perspective and diplomatic skills.”