| Monday's Headlines 1. US markets rally as DJIA erases early losses on vaccine news 2. S&P 500 goes positive for the year 3. Earnings have likely bottomed 4. Hedge funds rake in assets as SEC bids for less disclosure 5. US vacationers hit the highway Markets Closed
 Image courtesy artisteer/Getty
Markets Today U.S. markets kicked off the week with mild gains, with the DJIA reversing a 180-point loss on positive vaccine news from AstraZeneca's human trials, and renewed momentum for technology stocks. That's more like the stock market we became used to in May and June. Shares of Amazon (AMZN) went back to their winning ways, jumping 7% as investors remembered its dominance in our lives. The Nasdaq jumped 2%, and the S&P 500 is now positive for 2020. Really.
Gold prices topped 2011 highs, and silver hit a four-year peak as that disconnect between safety assets and hopes of an economic rebound continue. That disconnect is in equity markets as well, and earnings reports are full of examples. Any sector or company impacted by the pandemic, such as travel, consumer discretionary, and retail, has no idea what the future holds, while technology companies that have made themselves indispensable throughout this crisis continue to benefit. (See chart below of the prettiest representation of tech dominance I've seen so far. I can't stop staring at it.)
Speaking of benefits, the hedge fund industry is on the verge of becoming even more secretive if the SEC gets its way. Why is that a good idea at a time like this? We have no idea.  chart courtesy @financialsense
Headlines:
 Corporate Earnings: This Looks Like the Bottom This earnings season is bringing one of the biggest year-over-year quarterly declines in S&P 500 Index profits ever. Companies that are providing guidance will tell us about uncertainty facing corporate America as COVID-19 continues to impact their operations in the United States and globally.
But there are reasons to think it gets better from here, according to Ryan Detrick of LPL Financial Advisors.
Here are a couple of things to keep in mind as we wade through corporate report cards over the next two weeks:
 Chart courtesy Hedge Fund Research
The Ultra-Wealthy Are Doing Fine Just in case we were worried, hedge funds are doing quite well, thank you very much. Assets under management dipped in the first quarter of the year, as you might expect, but they have since rebounded strongly.
According to HFR's Global Hedge Fund Industry Report, total hedge fund assets surged in 2Q FY20 as HFR's Hedge Fund Tracker posted the strongest quarterly performance gain since 2Q FY09. Outflows slowed, and total capital invested in hedge funds increased to $3.177 trillion, a record quarterly increase of $220 billion.
P.S.: Wondering which stocks hedge funds love the most? They look kind of familiar, don't they?
SEC Proposes Loosening Hedge Fund Listing Restrictions Hedge funds' performance improvement comes just as the SEC proposed last week to raise the reporting threshold for 13F filings to $3.5 billion from $100 million. SEC 13F filings are where hedge funds list their holdings, assets under management, and portfolio moves within a quarter. They are basically the only hint of visibility the rest of the investing world has into the black boxes that are hedge funds.
Hedge funds claim the 13F filings are onerous and costly. It costs them between $15,000–$30,000 per year to collect and present the data, according to Goldman Sachs, which is chump change for these bastions of wealth.
But for both institutional and individual investors, removing this transparency hurts our ability to gain price discovery. If we don't know who is holding which stock at a grand scale, it's very difficult to ascertain supply and demand for a particular security. For pension funds and other institutional investors that rely on 13Fs to decide which fund managers to hire or follow, raising the threshold would take 80% of the listed hedge funds out of consideration.
The last thing the investing industry needs is less transparency.  Road Warriors Three of the few segments in retail spending that have seen meaningful increases are auto sales, RV purchases, and retail gasoline sales. That makes a ton of sense when you look at how we are spending our summer vacations.
We are hitting the highways in this country, and we are spending very little on air travel and traveling outside the U.S. The U.S. Travel Association estimates that spending on international travel will fall to $622 billion in 2020 from $972 billion in 2019, or 44.8%.
AAA forecasts Americans will take 700 million road trips this summer. That number is down nearly 15% compared to last July through September and is the first decline in summer travel since 2009.
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(chart courtesy YCHARTS)  Shares of Amazon are up by nearly 8% after a Goldman Sachs analyst raised the e-commerce company's price target ahead of its quarterly earnings report. Noble Energy's stock price rose by over 5.5% following Chevron agreeing to buy the oil company for $5 billion.  Shares of Ventas, a real estate investment trust, fell by more than 5% today. Shares of United Airlines fell by 4.5% as analysts are expecting to see a huge loss in its Q2 earnings report. Word of the Day The Securities and Exchange Commission's (SEC) Form 13F is a quarterly report that is required to be filed by all institutional investment managers with at least $100 million in assets under management. It discloses their equity holdings and can provide some insights into what the smart money is doing in the market. However, studies have found that 13F filings also have serious flaws and can't be taken at face value.  photo courtesy: loc.gov
Today in History July 20, 1969: At 4:17 p.m. (Eastern Daylight Time), Neil Armstrong, Buzz Aldrin, and Michael Collins land their Eagle lunar module in the Sea of Tranquility on the surface of the moon. At 10:56:15 p.m., Armstrong hops down from the Eagle's ladder and declares, "That's one small step for man, one giant leap for mankind." The world watches dumbstruck as the historic event is broadcast live; but Wall Street yawns, as the Dow Jones Industrial Average drops 1.4% the following trading day.
http://science.ksc.nasa.gov/history/apollo/apollo-11/apollo-11.html
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Monday, July 20, 2020
Hidden Riches
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