Business

Two days after Dan Loeb announced he had acquired a $3.5 billion position in the world's biggest food company, Nestle, making him the 6th largest holder, and going activist with a list of demands including 1) Improving Productivity; 2) Returning Capital to Shareholders; 3) Re-shaping the Portfolio; and, 4) Monetizing its L’Oréal Stake, moments ago the company responded by effectively conceding on day 2 of the activist campaign, announcing a plan to buyback CHF20 billion in shares by the end of June 2020, and added that in the future "capital spending will be focused particu

Over the last two months, the Fed has tried to continue to communicate
that they plan on raising rates up to at least 3% and reduce their balance
sheet by trillions.  They just raised the
Fed Funds rate by 25 bps to 1.25%. However, long term rates rallied by 50 bps!   And the
short end of the interest rate curve is priced with yields on top of the Fed
Funds rate.  This implies that either the
Fed is lying and does not plan to raise rates again (or even lower rates), or
something is broken in the bond market.

A few weeks ago, we reported that in a bizarre development - and the latest in a long series of red flags involving Chinese and HK stocks - various Chinese small and micro cap companies had asked employees to buy their stock while promising to cover losses" amid rising margin call pressures as the underlying stocks had been drifting lower.

The IMF has cut its US GDP forecast to 2.1% in 2017 from 2.3% projected in April and to 2.1% for 2018 from 2.5% previously, it said in a statement following its U.S. Article IV Consultation, and saying it could no longer assume the Trump administration will be able to deliver pledged tax cuts and higher infrastructure spending. Specifically, in giving up on the Trump agenda, the fund said "we have removed the assumed fiscal stimulus from our forecast."

Amid a slew of mixed housing data (weak starts, permits; rebound in existing sales at record median prices), S&P CoreLogic Case-Shiller reports that home price growth slowed to just 0.28% MoM (the weakest since Aug 2016), considerably worse than the average seasonal slowdown.

Year-over-year gains also slowed to just 5.67%, missing expectations.