Once Again, the Market is a Stock Picker’s Playground
Normally we don’t talk about jobs reports. Employment on today’s Wall Street just doesn’t follow the arc of the overall market, so they’re rather immaterial. The latest U.S. employment report was different though. This one will have a direct impact on Wall Street.
U.S. employers added 195,000 jobs in June, providing further proof that the overall labor market is looking up. More importantly, the sunny report suggests the Federal Reserve is likely to begin tapering its aggressive bond-buying stimulus sooner rather than later, a reality that has spun Wall Street on its head over the last month, bringing volatility into a once steady market.
Investors that have been fleeing bond funds in droves are likely to move money to equities at an even faster pace. Bond funds like PIMCO and DoubleLine Capital are getting killed. Even fund managers like BlueCrest and Paulson are taking beatings, as are firms loaded with once valuable debt securities.
It’s not all bad though. While the Fed has stopped handing out free lunches to quant funds swimming in their wake, the once-idolized stock picker is back in their element. Blue-chip managers like Lansdowne Partners, Egerton Capital, Odey Asset Management, Chilton Investment Company and Horseman Capital Management all made money last month, despite a drop in the S&P, according to Financial News. Those with a long-short strategy, a tactic that hasn’t worked all that well under the Fed’s stimulus plan, made serious hay in June.
Changing market conditions likely come as good news for veteran money managers like Stan Druckenmiller, who recently called the Fed-controlled market “rigged.” Druckenmiller said that stimulus efforts have compromised price signals to the point that veteran forecasters no longer have a competitive advantage. Now, with a more meritocratic market, it seems that they do.
The Death of the Shy Bean Counter (eFinancialCareers)
Like it or not, there’s no room for socially-awkward bean counters anymore. Corporations want the crème-de-la-crème of financial pros.
Lack of Evidence (MarketWatch)
SAC Capital founder Steven Cohen is likely to avoid being charged with insider trading. It certainly wasn’t for a lack of trying on the part of investigators.
Big banks are understating the riskiness of their long-term assets, resulting in artificially healthy capital buffers. Banks aren’t near as well capitalized as they like us to believe, said the Basel Committee on Banking Supervision.
Former NYU economics professor Heleen Mees was arrested last week for allegedly stalking and harassing her former lover, Citigroup economist Willem Buiter.
Finding Happiness (eFinancialCareers)
Earning caps disrupt mindless accumulation and increase happiness, according to a new study. Hopefully the European Union won’t read their research.
Wall Street Heat (Business Insider)
Meet the 32 sexiest people on Wall Street. Sexy is a loose term, apparently.
Buzz Around the Office
Rightwing rocker Ted Nugent is mulling over the idea of running for president in 2016. He’s already got one important step out of the way: his slogan. "Hi, I’m Ted Nugent, I have nine children from seven women, and I’m running for president."
List of the Day: Starting Your Search
If you’re about to start a new job search, do these things before hitting “apply.”
- Cultivate your social media presence.
- Get the jargon out of your resume.
- Start volunteering.
