Hedge Fund News Wrap: Week Ending 08/14/15

The Yuan is Making Moves

(Business Insider) – After falling to a four-year low on Wednesday, China’s currency is rallying as the week rounds out. The 4.4 percent depreciation in the yuan was an attempt to boost the domestic economy, but unforeseen negative consequences ensured for the Chinese corporate sector. According to Business Insider, the People’s Bank of China changed its formula for calculating the reference rate of the yuan in order to incorporate market forces.
There are opposing opinions as to if tolerating several marketing forces to determine the value of the yuan is the best decision, or if China has a selfish reason for doing so. Whether that is to make Chinese exports weaker on our wallets or not is up for debate. Either way, it lost 3.5 against the U.S. dollar this week alone, leading to the largest one-day fall since 1994.

Read the entire article at Business Insider
More coverage: CNBC and Reuters

The Dow Death Cross, Fact or Fiction?

(Bloomberg) – When it comes to the “Dow Death Cross,” history does indeed repeat itself, 77 times since 1897 in fact. The dreaded cross occures when the 50-day moving average crosses the 200-day moving average, but while it is causing a stir, people are debating whether or not the underlying index will enter a long-term downtrend.

Barry Ritholtz, Bloomberg View Columnist, discussed that on account of traders short-attention spans, this won’t be in the headlines by the beginning of next week. Furthermore, this is nothing to worry about unless a substantial amount of traders bring attention to and act upon it.

While there are differing opinions across many sources, columnists and traders alike, it is important to remember that the next months are not the friendliest to stocks and waiting until October might be your best bet. Being more selective with what we do and do not own is important with the ever-changing times.

Read the entire article at Bloomberg
More coverage: MSN and Yahoo Finance

Is Oil Andy Hall’s Friend Or Foe?

(Business Insider) – Commonly referred to as “God Trader,” Andy Hall and his firm Astenback Capital Management are now $500 million poorer. Crude oil prices took a nose dive and in turn, the commodity fund fell from $2.8 billion to $3.3 billion in the month of June.

Oil prices were once a good friend to Hall in 2003 and 2004, but now his firm has suffered its second-largest monthly lost on record. He recently stated that it was a “brutal” month for commodities as two other fund managers, Armajaro and Cargill’s Black River, pulled the white cover over their funds following colossal losses.

With Julys loss totaling 17 percent for Hall, maybe the oil is slicker than he initially presumed.

Read the entire article at Business Insider
More coverage: CNBC and Wall Street Journal

ValueAct Capital Management Secures in American Express

(HedgeCo) – According to several sources, activist hedge fund ValueAct Capital Management secured a $1 billion stake in American Express (NYSE: AXP), leading to a 8.35% gain for AmEx. This occurring after a 18.58% drop year to date.

Preceding the drop, the multinational financial services corporation severed its 15+ year relationship with the members-only warehouse giant, Costco (NASDAQ:COST). Nevertheless, the San Francisco based group is now in good company, as Warren Buffet’s Berkshire (NYSE:BRK.A) (NYSE:BRK.B) owns 15%.

Even with the upward spike and new relationship, the stock is still down almost 12% on the year and there are some speculations as to whether or not this connection will produce an upward swing.

Read the entire article at HedgeCo
More coverage: Wall Street Journal and Seeking Alpha