Michael Burry, famed for "The Big Short," has purchased about $1.6 billion worth of put options against the SPDR S&P 500 ETF and the
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2023-08-15 | Sign Up | View Online | Advertise
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S&P 500 4,489.72 +0.58%
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Markets & Economy
'Big Short' Michael Burry reveals bets against the S&P 500 and Nasdaq 100 (2 min read)

Michael Burry, famed for "The Big Short," has purchased about $1.6 billion worth of put options against the SPDR S&P 500 ETF and the Invesco QQQ Trust ETF at the end of Q2. This was a strong bearish stance against the market as it represents a large portion of his firm’s portfolio value. It was revealed through an SEC filing so the option strike prices were not disclosed and it’s unclear if he is still holding these positions. Despite Burry’s bearish view, the S&P 500 is up roughly 17% this year while the Nasdaq 100 is up nearly 39% over the same period.
Goldman expects a Fed rate cut in the second quarter of 2024 (2 min read)

Goldman Sachs predicts that the Fed will likely start decreasing interest rates by the end of next June, with gradual quarterly cuts to follow. They believe this is to bring interest rates back to a more normal level as inflation gets closer to its target. Currently, they're estimating the rate cuts to begin in Q2 2024, but they also acknowledge uncertainty in the pace. Recent data indicates slower US inflation than expected, and Goldman sees the possibility of the Federal Open Market Committee (FOMC) maintaining rates instead of cutting them urgently this year.
Business & Stocks
US Steel rejects buyout offer from rival Cleveland-Cliffs (3 min read)

US Steel rejected a proposal from Cleveland-Cliffs to acquire the company, which aimed to create the largest US steelmaker. The proposal suggests a payout for each US steel share that is about a 43% increase from the closing price on Friday. Although US Steel rejected the offer, Cleveland-Cliffs plans to continue pursuing the deal and the news send shares of US Steel more than 30% higher on Monday. US Steel also received several other offers and said it will begin to evaluate its options.
Hawaiian Electric shares plunge over potential liability from Maui wildfires (2 min read)

Hawaiian Electric shares fell over 35% due to concerns about potential liability for Maui wildfires. A lawsuit claims the company could have prevented the fire by shutting down power lines before strong winds. Its stock price dropped to around $20 and a few banks have lowered the price target to $25 from $35 due to wildfire risks. Although the cause of the fire is under investigation, analysts are cautious due to wildfire-related claims exceeding $1 billion in other areas. With the decline on Monday, shares of the company have slipped over 44% in August.
Funds & ETFs
SEC Delays Decision on Spot Bitcoin ETF (3 min read)

US regulators have delayed a decision on approving a spot bitcoin ETF from ARK Investment Management and 21Shares. The deadline was originally August 13 and the decision was highly anticipated as over 70 previous spot bitcoin ETF applications have been denied in the past. The delay was due to the SEC asking for input on market manipulation and surveillance agreements. Despite the setback, ARK’s CEO Cathie Wood still expects approval for all the spot bitcoin ETF applications simultaneously.
Thousands of Tiny Hedge Funds Face Closure in China Shakeup (5 min read)

China's hedge fund industry, worth about $832 billion, is getting a major overhaul. New regulations are coming in September that require Chinese hedge funds to have a minimum asset size of $1.5 million. There will also be new rules that cap leverage and investment size. Surprisingly, around 37% of the existing hedge funds could be affected by the changes. Larger players will likely benefit while smaller ones will face compliance pressures. China's hedge fund market has exploded in the past decade but this shakeup could reshape the landscape.
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