While no one is ready to “triple-dog dare” North Korea, financial markets have faced down the latest in Kim Jong Un defiance with a collective yawn.
The isolated country lobbed another missile over Japan last night, but the only market action going is a huge rally for the British pound. We all know the Korean Peninsula’s potential to cause chaos shouldn’t be underestimated:
For now, though, confident investors in an apparently unbreakable market seem unwilling to sell, no matter what, notes CrackedMarket’s Jani Ziedins. “Few things calm nerves like a rising market,” he says.
rough math, we’re 8 missiles away from Dow 25k 😉
— Joseph Fahmy (@jfahmy) September 15, 2017
It’s been a fairly solid week for stocks, with a smattering of record closes likely to help major indexes close out with 1%-plus gains, providing nothing goes badly wrong today.
On to our call of the day, which lends credence to that teflon-market theory. It comes from famed contrarian hedge-fund manager Hugh Hendry, who has shut the doors on his struggling Eclectica Asset Management firm. Offering up some final advice to clients, he suggested stocks will remain a solid bet.
Eclectica’s Hugh Hendry pictured in 2016
“The “implications of a sustained bout of economic growth are good for you,” he says. Also good, according to Hendry, is the fact he “can’t see interest rates rising abruptly to interrupt the upward path of equities.”
He also thinks commodities will keep trending higher, as they’ve “already acknowledged the upturn in the fortunes of the global economy.”
But it seems all this good news was the undoing of Hendry’s macro-oriented Eclectica, whose flagship macro fund posted a 9.8% year-to-date loss as of September. The outspoken Scotsman shot to fame in 2008, when a bet against banks earned his fund a 31% return.
In November, he was preaching gloom on Europe, but alas now joins several hedge funds in tossing in the towel this year.
“It wasn’t supposed to be like this, and it is especially frustrating as nothing much has gone wrong with the economy over the summer,” explains Hendry in a letter to clients.
He adds that the fund’s “substantial risk book became strongly correlated over the short term to the maelstrom of President Trump and the daily news bombs emanating from the Korean Peninsula.”
It’s worth reading Hendry’s entire farewell, seen here on MacroBusiness, in which he offers up his views on other assets.
Damn Hugh Hendry closed his hedge fund. You could tell around 2011/12 or so he was married to too many ideas. He was awesome in ’08
— Senex FX (@Senex_FX) September 15, 2017
Key market gauges
Asian markets ADOW, -0.26% mostly kept their cool amid the North Korean headlines, with the Nikkei NIK, +0.52% logging a 0.5% gain. European stocks SXXP, -0.21% are mixed, but headed for a weekly win. Oil CLZ7, +0.38% is flat, and gold GCZ7, -0.20% is dipping.
See the Market Snapshot column for more.
Even if you’ve got no skin in the game, bitcoin BTCUSD, -9.73% is a fascinating trade to watch right now. After the big plunge yesterday, it’s up 3.3% to around $3,335, with a bunch of other crypotocurrencies also in recovery mode.
This just appeared on Chinese BTC forum: Beijing Exchanges Must Announce Closure Date by 24:00 BJ time today https://t.co/YjjvVKphLt
— Bitcoin World (@BitcoinWrld) September 15, 2017
So is bitcoin on the road to recovery or ruin? The below chart from IG’s chief market strategist Chris Weston, lays out the big levels to watch:
“Bitcoin has been smashed of late, and the cynics would say the “bubble” has popped, although I would be fully focused now on the 4 August gap high of 2,877. That is the key line in the sand for me, and the bulls will want to see this hold,” says Weston.
Oracle ORCL, -0.02% is off nearly 4% in premarket after its outlook released yesterday raised questions over the software maker’s future growth.
Mike Hopkins, CEO for Hulu — a Disney DIS, -0.93% , Comcast CMCSA, -0.95% , 21st Century Fox FOXA, -0.34% and Time Warner TWX, -0.29% joint venture — said the company will spend $2.5 billion on content this year. That’s bigger than Apple AAPL, -0.86% or Facebook FB, -1.21% , but far less than Amazon AMZN, -0.74% or Netflix NFLX, -0.55% .
Rovio has set the pricing for its IPO, which values the “Angry Birds” maker at $1 billion.
It’s a big day for data. Updates on retail sales and a manufacturing survey for the New York state area are due at 8:30 a.m. Eastern Time. That’s followed by industrial production at 9:15 a.m., then business inventories and consumer sentiment at 10 a.m.
“I spoke to a woman … who said she was standing there and all of a sudden heard a bang — and saw a wall of flames, flames in the carriage.” — That was BBC News presenter Sophie Raworth , at the scene of an explosion on a London Underground train this morning.
At least 18 have been injured in what police are treating as a terrorist incident.
Nearly 24,000 — That’s how many Venezuelan bolivars are needed to buy just one dollar on the black market (h/t The Daily Shot, venezuelaecon.com). The currency continues to free-fall as a the country’s economy spirals downward.
Picture saves a thousand words:
How does this make you feel?
— BBC News (World) (@BBCWorld) September 15, 2017
“Hugger-mugger,” “swerk” and other lost words that linguists are trying to revive.
Crocodile kills FT reporter in Sri Lanka.
“Extreme couponing” Texan helps out Hurricane Harvey victims.
Florida nursing home where eight people died after Hurricane Irma loses Medicare funding.
Hot Florida cop in hot water over alleged racist jokes.
Get ready to sing it again: “Frozen” the musical.
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