My Kingdom for a Hedge!

Chidem Kurdas

Today people sold stocks and piled into US Treasuries, driving 10-year yields to another low. Everybody is trying to protect themselves.  Funds are hedging their portfolios but to put up defense against a crash is very costly now. There is no good-value, low-risk place to hide. Risky assets, on the other hand, are cheap.

Buying Treasuries looks like the one thing not to do.

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FrontPoint Clients Seek Healthcare Replacement

Chidem Kurdas

A number of large investors were in the FrontPoint healthcare fund  that has been shutting down after inside trading allegations surfaced against a portfolio manager. Some of the investors are funds of funds that want to have healthcare equity strategies in their portfolio.

Analysts see healthcare as an attractive place to be. The healthcare sector is cheap, says Barry Knapp, head of  US equity strategy and a managing director at Barclays Capital.

No-Double-Dip Conventional Wisdom

Chidem Kurdas

In the past week I’ve encountered a number of forecasts – some from hedge funds and one from the research team at Barclays Capital – of higher-than expected economic growth in the next two quarters. Modest but sustained growth is the most likely immediate scenario, is what you hear all around. But unforeseen events are always, well, unforeseen. They are what the accepted wisdom of the day misses.

Hedge funds’ gold purchases in the past year are evidence of

Carry Trade and Tech: Barclays, BofA

Chidem Kurdas

Analysts parsing market prospects have come up with different investment ideas. You see this among both banks and hedge funds. Barclays Capital’s outlook for the third quarter highlights divergences between countries.

Barclays head of research Larry Kantor notes that there may be more of a carry trade in the next few months. He says markets will bounce back near term but the easy money has been made in the first year of economic recovery and now it’s more difficult.

The people at Bank of America Merrill Lynch Global Research are more optimistic about US stocks. David Bianco, head of US equity strategy, says technology stocks offer low-hanging fruit with little risk, while financial shares promise strong returns. He sees foreign markets as the growth engine, with export-oriented companies doing well.