is hard to generalize but the whole notion of a hedge fund is there is a risk that is hedged.hat is often a market risk. if you put a dollar into the hedge fund, you usually do not have as much market risk. >> these guys make hay when things are falling. >> two points. part of the math is if you could outperform by enough in the down market, you will make up for underperforming in the upmarket. >> but stocks usually go up. is that part of the problem? it is great to have these assets that perform but if you look at any long-term, it is usually just up and to the right. >> that is right. >> warren buffett picked the s&p 500. big part of the reason i was comfortable taking the bet was i thought the s&p 500 would be a bad place to be. there are a lot of low-cost investment options. you could invest in international markets. you took a global low-cost index, it matched the returns of hedge funds. >> he chose perfectly but he chose luckily. >> he often does. >> for how many decades now? what about risk. have not talked about the fact that asset prices have risen. tough to get low-i

hedge funds are losing the balance of power.e% of those surveyed said over the last 12 months, the terms have changed their favorite investors while 5% say the changes favor hedge funds. that's for more dire for hedges funds and assets. most insist, though, things will get better for them when there is a correction, guys. >> leslie, thank you. our next guest oversees $20 billion, despite a strong year for hedge funds, he isn't convinced that bill acman deserves his money. marc levine is chairman of the illinois state board of investment. >> thanks for having many e. >> you are not convinced of this turn around here in hedge funds in. >> look, a good month or a quarter is due to the surge if stock market isn't going to salvage this thing. of the last five years, hedge funds have generated 4.3% returns. think about that number. you can get that on investment grade bond, essentially for free. that's the way i would go, as i mentioned in the past, we can't get a billion dollars out of hedge funds, we have gone from 81 to 17. what we

looking at your strategy, it is a hedge, but it is a pretty bullish hedge here.llish trade. it says if there is geopolitical , i could elaborate on all the reasons we don't have time for that, but if gold were seem like and it does it is not a foregone conclusion that it won't, it is a very inexpensive way to participate in it. it does time around the next to set meeting. you have employment numbers in the meantime, and there are other potential catalysts before the trade expires. julie: if your timing around the fed meeting, what do you think about the probability at this point that we will see an interest rate increase? steve: i think that is a foregone conclusion at this point. they are one of those things that make me nervous because too much consensus is never a good thing. look at oil today. couldttle minor upset move things in one direction or another. this is basically saying, i think the path of least resistance is up. that would be the way to deal with that. julie: always be hedging, i guess that is it. steve, thank you so much. julia and scarlet, back

you want to make for your hedged. -- make sure you are hedged. everybody owns apple.e: are they beginning to lose faith? will that have an impact on how hedge funds turn in the next few months? jane: the wrigley three environment is stabilized. -- the regulatory environment is stabilized. is whole trump trade probably not going to happen at the same speed that people forecasted. people are worried about the rate at which the fed raises rates. the economy is not as strong. people are worried about the a bunch are going long the market to get on the market trend. and a bunch are being very conservative. vonnie: what about europe? are you seeing a pickup there? jane: equities in europe tend to be cheaper relative to equities in u.s. people have been looking at the debt side, worried about that in europe. we seen very few trades executed over there. vonnie: are you waiting? jane: everybody's waiting. they're going to europe to find good bonds to buy. they come home at the handed. vonnie: and china? jane: we've been making a lot of money in china. , youmarkets moved so muc

someone is out there hedging.lying bid of people protecting themselves, but it is not moving it one way or the other. julie: consider is a high correlation between financials and the stock market overall, but there has been mostly sideways movement. eating we will not getting to see this, sort of, blah, environment? kevin: that is the point i am trying to make -- you want to espouse to the sector and doing it in an efficient management -- manner with the xlk etf is a way to do that. july.t: coming up on "what'd you miss?" can result whether it's political firestorm? berto ramoshs' al joins us. this is bloomberg. ♪ ramy: i am ramy inocencio. let's get to the first word news. president trump is ratcheting up the dispute with german chancellor angela merkel, taking to twitter, tweeting the u.s. has a massive trade surplus with germany, and the germans paid far less than they should for nato. the president promised " this will change." over the weekend, angela merkel said transatlantic ties are to some extent over. is

when you look at hedge fund oer funds, equity hedge funds, event driven hedge funds, equity capital,scovered that there is a lot of market data embedded in these returns and the typical alternative pricing structure may not be the best way to go. mark: you discover certain hedge fund strategies were less attractive. taimur: the less attractive ones were equity hedge, equity long shot strategy, and events driven. mark: where to invest, where to in aaway from, sum it up couple of sentences. taimur: make sure you're not aaying for market dat alternatives, but when you find alternatives, large-cap rabbit equity, when markets turns out active equities will outperform. chieftaimur hyat, pgim strategy officer. vonnie: bracing for a potential hard brexit, we hear from the ceo of euronext. this is bloomberg. ♪ ♪ live from bloomberg world headquarters, i am vonnie quinn. mark: i am mark barton with the european close. the financial industry is bracing for impact as theresa may moves forward with plans for what many are saying is hard brexit. andpoke about the costs implications of the looming

alix: a big portion will be hedging. your hedging for the first time in 11 years.kers do you work with? ofwe work with a variety investment banks. we are very happy about this operation. we had not hedged in a long time. agohedge along -- 11 years was partial. this is a complete program. we will continue to move for the future. we want to give some degree of certainty to our investments and to our planning. like the mexican government, the mexican government has hedging since 1991, we think pemex should do as well. that is what we hope we will do next year. alix: your hedge covers as much as 400,000 barrels of oil a day from may to december of $42. if oil hits 37 dollars, you get max coverage. what probability do you put on oil hitting $37? >> let me answer with a cliche. i don't buy the car insurance to crash it. so i hope we don't have to use the insurance, but we need to buy it and be sure that we have it. again, it is hard to predict. what we hedged, you know, the maximum probability of the insurance, you know, and it site, the maximum probability of it being u

see money coming out of hedge fund management. as that happens, it is not pursuing alpha in the same way. it should make things less efficient and create a larger profit pool. we will find a new equilibrium. to firms that are best able assemble, analyze, and incorporate information will continue to earn outsized returns. >> how large do you belize -- do you believe that the opportunity is set for citadel? >> in terms of how much cap? i don't really fixate that. >> i'm not suggesting that you do, i am just curious. >> could we manage $25 million? we probably could. $35 million is probably outside our reach. there is an analytical element and a psychological element that comes to play as you grow. imagine that you are a portfolio manager and a hedge fund and you are accustomed today's where you make $2 million or $3 million. i say that i will give you three times theoney ur worst days are three times worse. if you lose $20 million in a day, psychologically, people have a hard time with that. when we think about growing our business,

i had a chance to sit down with hedge fund legend ken griffin, the ceo and founder of citadel.e talked about the shakeout in the industry. mr. griffin: it is a shakeout for active management. we see the rise of passive money in etf's, index products. we are seeing money come out of active management to passive structures. as that happens, the money is not pursuing alpha in the same way. that should make markets less efficient, creating a larger pool for those who remain. passive will be bigger, active smaller, and the firm's best able to assemble, analyze, and incorporate information in their investment decisions will earn outsized returns. erik: how large is the opportunity and billions of dollars for citadel? mr. griffin: in terms of how much cap we can manage? erik: yes. mr. griffin: can we manage $25 billion? we do manage $25 billion. $35 billion is probably outside our reach right now. there is both an analytical element and the psychological element that comes into play as you grow. imagine you are a portfolio manager in a hedge fund and you are accustomed today's were yo

the hedge fund short, i like that divergence. winner because it was both her charts but it was her actual chart that wins today. later on bloomberg, technology. interviewve a special with the disney ceo. ♪ vonnie: it is noon in new york, 5:00 p.m. in london and midnight in hong kong. oakham to bloomberg markets. -- welcome to bloomberg markets. vonnie: from bloomberg world headquarters in new york, here are the top stories on the bloomberg and around the world we are following this hour. in market, stocks have gains after the s&p 500 and the nasdaq hot to all-time highs -- hopped to all-time highs. crude resumes its decline. the volatility index, not seen since 1993. disney reports second-quarter results today as investors show concerns about troubles at espn. the company could get a boost from a strong phil slate and also robust gains from its theme park. -- film slate and robust gains from its theme park. in the art market, we will hear from the head of postwar and contemporary art later this hour.

it looks like a decent hedge. >> it is absolutely a hedge. i think tim nailed this. you've nailed this for a while now. the data coming out of china scares me a little bit to go longers em being short u.s. right now. i would rather be long europe than long the u.s. so i would actually put that trade down versus what gundlach suggests. >> we need to believe that interest rates will remain relatively low in order for that side of the trade to work. >> i think you do. i think you need to believe the dollar is going to remain this strained. the underperformance has been currency related. we're at a place where i think maybe the dollar in the short run is stuck here and that's good for the eem. >> let's go out to the sohn conference and scott walker. >> all right. melissa, thank you so much. listening to the confers, we will just pick up with jeffrey gundlach. great to see you. welcome. >> thank you. >> these guys on the show were just talking about the call you just made. short spy, longers em. >> yeah. >> why this call? >> it's the valuation of emerging markets, is half

vonnie: is there enough to go around all of the hedge fund managers?aise $9 billion plus that he wants to raise to go along with his $11 billion? phillipe chabret was banned from running money at all after he was caught within market manipulation. he was banned from running money in england. billion in3.7 switzerland. he was banned in august, and in january raised $3 billion. you won't get the new york fire and police department. you lose some institutions like blackstone, but with a 25% compound track record, an awful lot of money will go there. vonnie: there's a great story on the bloomberg you can read. it looks like he may have people pay fees up front as opposed to the two in 20 and one in 10. fabio: it is a double-edged sword. he can charge all expenses back to the fund. sit it out did that for many years -- citadel did that for many years. load was nothing short of spectacular, though cohen was running pretty spectacular fees. vonnie: thank you. still ahead, another billionaire got in trouble with the fec. falcone on the comeback trail. find out

this is again what happens at a hedge fund.lly quality work, there's someone else on the other side of one of these stocks, and you end up getting run over. this quality work makes you think ring the register, no, don't stop. >> what's on "mad money" tonight. >> branent saunders, and brad jacobs, a trucking company, last mile, last mile is important in a world where we have lots of e-commerce. lie wayfair. >> got that ride. see you tonight, jim. >>> when we come back, john scull sculley. apple is up 12. apple is up 12. can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company. but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes. ♪ and you feel so good ♪ oh, yeah >>> welcome back. we're at the new york stock exchange, the dow managing a 23-point gain to start the morning. obviously the tight range is the talk of all the markets. it

how did that lead to the hedge fund investigation?re have been more than half a dozen cases on the sell about theers lying price they bought bonds at and then selling it at a higher price to clients. part of that investigation led to hedge funds, same market but different kind of abuse. instead of valuing a bond or the market probably has it at 85, they can call a broker and try to get it at 87, 88. they can boost returns and get higher fees and keep assets in place. julia: before the financial crisis, regulators were pretty hands-off on the securitized bond market. investorsed both the and sellers here were pretty sophisticated. in the financial crisis happened. the involvement focused more on the equity rather than the bond. where do you draw the line here, and how big could this be? rarely take ars look at this market, and that came undone when this same market was looked at at the spark of the crisis. the reason this market is ripe for abuse is that there is a lot of gray areas. just about anybody can look up stock prices. bonds t

inould launch a hedge fund 1987. can't launch a hedge fund less than several hundred million dollars. that's discouraged new business formation and active management. space, the transportation space, it is everywhere in america. that's a tragedy. to reduce the regulatory burden on the american that has a dream, i applaud that. the last administration was interested in reduce at -- and introducing more transparency to the bond market. what about this administration? ken: i hope they follow through on that. transparency creates confidence that you have been treated fairly and confidence you understand what is taking place in the market lace. transparency is the underpinning of a healthy capital market. in a market that is opaque, the markets enjoy and information advantage of that capacity, but that doesn't make for a good market. if this administration continues to carry that baton forward and shine light on how treasuries are priced and created, that would be good for the entire market. ,f they don't, i think it is w

that is tough to do in the hedge fund model.an do it in the private equity model, but it's still a little bit different. gives us thee flexibility that we need and really gives us the opportunity to hopefully never have to sell any of these companies that we control. it i: you want to fashion can miniature berkshire hathaway? that's the ultimate model. if we can get a certain percentage of that success that they have had, that's clearly what we would have liked to do or would like to do. betty: would you go back to managing, substantially, fund capital? say never say nev, but it'highly unlikely. is not really what i want to do in theong term. i have had somod success in the previous entity that we built and now i feel like this is -- we have got the model kind of tweaked the right way to allow us to be flexible yet give mecontrol, do what i think and my team do best. -- betty: does it make you think you should have done it earlier? yes, considering the redemptions, you can't second-guess it, the hedge fund structure for me was w

mexico has always had to hedge because they are dependent on the income. the ministry has hedged. i would love to see them head, go for it. we know that outfits like exxon or saudi arabia or aramco, do not ever had because they would overrun the market. they would probably not achieve a lot by doing that and just bring the long end of the curve down. what is the point of it and purpose of it? tom:they would china is in the . we waited decade for a hard landing. how does china affect the price of oil? >> greatly. of late, there has been the chinese consumer who does the driving and consuming of gasoline or flying and consuming of jet fuel. driven a lots have of oil demand for china and that is going fine, the oil growth demand in china. you have the chemicals and their propane consumption, they are growing steadily with diesel a question. the chinese economy is becoming ever more complex. and ever more driven by consumers, rather than by mining equipment running around the mountains. it has become a more complex economy and doing just fine with problems like everybody else. saw iss

>> that's where everyone, people talk about the vix, hedging. everyone is hedging against that 2400 level. we kiss it. trade above it. everyone is hedged, 2400 the big rounds number. >> the two things you really i think need to think about most off is what is going on with central banks, you have four, five, the biggest ones taking away. when the dollar is at 103, 104 or going into a 115. everyone was talking how about want vix down, it's 2.5% with rates say staying at 220 to 240. no one is calling for 3% tenure. this seems the environment without the political tur mail is everyone is saying is the economy yet gives you room to go. >> he's off, president trump engaging in turmoil, d.c. rages on. >> that could be giving a boost to one emerging investment. >>> plus, retail having its worst week of the year, but there is one name traders see emerging from all the wreckage. we'll explain. >>> plus, nvidia, did you miss the rally? how you could get in for less than ten bucks? we'll explain when "fast money" we'll explain when "fast money" returns. we

to flow into the hedge fund community.g a massive ripple effect into the rest of the market. more money is being sucked in. it is passive money. a much smaller bucket to play in in the hedge fund community. mark: there has been a rotation into passive from active. you mentioned vanguard. someone had a stat that every dollar that goes from every into vanguard reduces the money in financials because their fees are so low. when we hit a regime shift, we hit 9.7 this month. the last time we saw this was before being moves -- the big moves. you.thank on the carry conversation. we will talk about what is happening in iran and we will later on the program from chicago. looking forward to that conversation. this is bloomberg. ♪ >> i will not resign. i repeat, i will not resign. i know what i did and that my were correct. i demand a quick investigation to clarify for the brazilian people. was the brazilian president defying calls for him to step down saying that the supreme court investigation will clear him of a cover-up, approvin

on long as well as hedge funds.the private markets, there is a new force that is coming in that has critical mass, and i think how they deploy the have implications for returns and the risk that you are underwriting as this business grows during jason: great. and -- theyurns and henry mcvey give for joining us. scarlet: a popular eu case in which change is gearing up for audio dollar and -- during up for -- this is bloomberg. ♪ scarlet: -- this is bloomberg markets trade let's get to one of the big stories of the day. bes u.k. copy chain may heading for a wall street ipo. bloomberg deals reporter ed, joins us. ed, how exciting? >> is finally doing it. julia: why here rather than ideal in the u.k.? >> i think there is more capital here. it can do a better job of going public year. i think the other thing is that it is maxed out and u.k. that's in the u.k. as far as growth. and will be potentially the next major market. cf. 29 stores in the u.k. and 74 in the united states. they have plenty of room to add stores here.

you we heard me say long holders might consider as a hedge.some point, you have to make a decision if are you long the stock and the stock is down 290s and it was down $25 from its recent high, how much protection do you still want? if you want to monetize that hedge, to me i want to stop a put spread at the event at the premium i paid. you might give it a little more time, if it snaps back, stop it at that $8, if it was a defined risk bearish bet. at one.it was double yesterday, you take half off. >> what does it look like at this point? you have been a fan. >> obviously, if you had news and a stock draws down the consensus is the news is bad. in a way, i think this is the more important data point is how it shrug it off. coming back up today, it would have gone back down. i think there is a lot of momentum here. it will amass, people short. stay with it. >> it's hard to press stocks with such short interest. this one, obviously the street loves the name. >> all right, up next, your tweets and the final call from the options desk. [pony neigh

we know hedge funds had measly returns. when asked about that, he said the hedge fund industry should compromise on fees and cut them if it can't get returns above 20%. on the chipotle mexican group stake he has, quote, i took advantage of chipotle's crisis, he says he bought chipotle around $380 a share, you see it now at $7, aual high $499. he's in the money right now. why did he buy chipotle? this is the way he thinks, he said chipotle is a long runway, huge potential in breakfast, dessert, catering. they haven't done that yet. they don't have an app. there's a huge runway there. of course, the valeant loss, he had just loss so much so much money there. with the money he sold at a loss, but with that he's going to make two investments that he hasn't announced yet, but with the money he got from selling the rx valeant, he's bought into two things and hopefully know soon. the lesson learned from the valeant disaster, don't rely on management ever. >>> check the markets right now. the dow rallying significantly here, up abo

that is where hedge fund managers can finally thrive again.ities in microstrategy's, very solid corporate fundamentals across the globe, which means companies have cash. overall, the outlook for hedge funds is better than for a better long time -- a very long time. in asia definitely look at this asset class, and we dubious asset management for many institutions last year and this year. quickly, let's take a look at this chart on the dollar. i want to get your view on this. the dollar, which had this nice rally, and the rally has been petering out. you are seeing that position fall to the lowest level on the dollar since august. the dollar certainly getting a little less love. how is weakness here and the dollar, which we don't know is going to continue, playing into your view on alternative investments? guest: i think a lot of emerging markets were very afraid of the dollar in the recovery and fiscal divergence he rates. a lot of people are afraid of it. they should not relax too much because we believe the rates will end up diversifying thei

if you want to monetize that hedge. to me i like the stock, a put spread like that after an event at the premium that i paid. so you might give it a little more time. if it snaps back like it did today, stop it at that $8. if it was just a defined risk bearish bet, at one point it was double yesterday. take half off, play with the house's money. >> what do the charts look like at this point? >> there's two ways to interpret it. if you have news and a stock draws down, the consensus is that the news is bad. whether it's a beat or a miss. what cuts the other way, i think this is the important data point, how well it shook it off. if it were in real trouble, instead of coming back up, it would have gone back down. i think there's momentum here. it's got a massive. stay with it. >> it's hard to pressure some stocks that have long short interests. the street really loves the name and it doesn't seem like it's going to roll over. >>> up next your tweets and the "final call" from the options pit. [pony neighing] what? hey gary

the price can potentially go big but do you see a wall of hedging?s what been doing, u.s. producers and producers outside of u.s. will take every opportunity. the downside risks have not disappeared. this year, a lot of investment online because of the hedges and currency is lost and they are bringing in that introduction this year and will do it again next year, they have technology on prices on their site and will be proactive in hedging, mexico will heads and other countries will had, you will see a lot of oil next year. >> 1.8 million barrels, where does the price go and did he saudi arabian's fully engaged with the cuts if they get their ipo out the door before a nine-month deal expires? >> if you get the nine-month extension, you have a supportive prices but the sport may be shortened because of excessive hedging. a choppy ride for nine months. ravensond one, the saudi contribution or commitment, it remains a big question. they should commit. ipo, it isy do the the same. they may have more willing power within opec if you have an ipo. >> thank

this one is a multi-strategy hedge fund etf, so basically, it is doing better than the actual hedge funds street, right? eric: it has more volatility, but that said, it is doing good. look, the bottom line about this product, which i think is compelling, is you are getting jpmorgan hedge fund management and actively managed, for about one third of the cost of an actual hedge fund, so they said they want to democratize hedge fund investing. the question is, for who? retail investors have not really alt crazy buying liquid s. it is unclear whether they would be able to peel off and an endowment and use the etf instead. it is decent for the first year out, but that is nowhere close to some of the bigger hedge funds. anchor: hitting closer to asia one, i want to get your take the etf market in japan in particular, because it has been seven years since the boj has essentially become a whale in the market there. after they doubled down mass year, they owned 60% of the nation's uts right now. -- etf right now. has a cushioned the whole market? eric: we saw it happen here at the fed. this whole t

. >> you said you're weighted to hedge funds and that's a concern, given the fact that hedge funds aret there. perhaps you don't have as much from the corporate side. is that a concern for you? do you need to change the mix and not rely so much on hedge funds? >> if you look at the day that's available, the consultancy data, the market share with all of the different client constituencies has increased. however, we have a leading position with hedge funds. so when that sector is in a tough market environment or that sector is changing that can at the margin affect us. really what i would say, we have been focused on making sure we have the broadest, full service platform for all of our clients. we're very committed to that. we do weight in certain businesses than some of the competitors do. but that said, when i look at the overall mix of the client relationships and way we're positioned in the business i can't comment on others' earnings. but i look at the franchise, i feel very good about where our team's competitively positioned and our ability to serve our clients in the franchise.

i could launch a hedge fund in 1987 -- when i started my hedge fund. could launch my hedge fund in 1987. you cannot launch on today given regulatory matters you have to deal with. that has discouraged new asset management. it is the burden of regulation. the energy space, the transportation space, it is everywhere in america, the weight of regulation reducing your business formation in america and that is a tragedy. the administration's focus on reducing the regulatory burden on the american who has a dream, i applaud that. the last -- k: the last administration was interested in producing more transparency in the bond market. what about this one? ken: i hope they follow through on that. transparency creates confidence that you have been treated fairly, that you understand what is taking place in the marketplace, transparency is the underpinning of a healthy capital market. is opaque, that incumbents enjoy information advantage of that area and -- of that. that does not make for a good market, so this administration continues to carry that baton and sh

i heard me say long holders might consider as a hedge. you have to make a decision. if the stock was down $25, from its recent high, how much protection do you want if you want to monetize that hedge. i like to stop a put stop at the premium i paid. you might want to give it more time but if it snaps back like today, stop it at $8. if it was just a bearish bet. at one point it was a double yesterday, play with the house's money. >> two ways to interpret it. one if you have news the stock is down, it's a beat or miss. and how well it shook it off. if we're in real trouble instead of coming back up today it would have gone back down. i think it has a lot of momentum and stay with it. >> hard on stocks that have such short interests, the street likes the name and doesn't look like it will roll over. >> up next, your tweets. [pony neighing] what? hey gary. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinko

only at td ameritrade. >>> hedge fund och-ziff seeing huge outflows. following the money on that story. >> i want to focus on one big number here. that's $7 billion. that's the net amount of capital that left the funds during the first four months of this year. much of that of course was due to investor concerns over the company's settlement last fall with the sec and justice department over bribery charges, but the pain may soon be over for them. the ceo said yesterday that the firm is one quarter away from stemming the outflows related to the settlement over the next three months, almost all their clients will have had the opportunity to redeem. its multistrategy fund was up during the first quarter and its credit fund was 3.2% higher. to put that into context, i want to talk about their $4.8 billion in net yoet flows during the first quarter. the net yooutflows for the industry was $5.4 billion as calculated by hfr. however, the industry experienced the lowest quarterly yoet flow since the fourth quarter of 2015, guys. >> interestingly, a big, big n

however, he did hedge a little bit by saying, well, at least as it relates to the last time that

the hedge funds are probably off the chart office this run. maybe in the end that's why the market doesn't seem to want to come down big, too many of the big boys expect it too. the bottom line, that expressive hedge fund activity is the reason i can embrace to explain why the big decline has been so elusive. that meaay be the mentality of l the big boys that stabilize on the dip. that may look like the need to buy something, anything, before the move goes back up. roland in new york. rola roland? >> caller: i'm pretty much a value investor and these days it's pretty difficult to find some good values out there. one that i came across recently and took a small position in, was kroger, kr, what's your thought about that stock? >> kroger needs price inflation, i know costco is predicting that. i don't mind sitting with kroger, it's a good company, don't expect anything to exceed price inflation, that's what they need. l let's go to alex in oregon. >> caller: you featured tellurian, i jumped in, it's down about 40% from where it was. that's tll.

our hedge funds starting to jump back in? su keenan is here with a look.st a bit of a tantrum following opec, but the market seemed to be more sanguine when it comes to not getting deeper cuts. bit of a disappointment that opec did not go further, but the question -- are hedge funds jumping back into oil? #btv 8924. recently asas february, hedge funds were placing huge bets prices would rise. they turned out to be right if you look at that dip. case.e have the opposite we have a short squeeze. people were betting prices would stay lower, and they are coming back big time, and so, there is room for even more of a short squeeze as people cover their bets against bearish positions. in. have to buy back and that makes the gains greater purity expectation is that opec will continue to bring down inventory. agreed tollies prolong the curves by nine months. there was disappointment that they did not do more. u.s. traders were inspecting that. you thought bit of a downturn. if we go into the price chart, you can see year-to-date, the oil has come back. we maintain

also a wonderful chart showing hedge funds may still be short based on the cftc data. there is a net long position by institutional investors, which the top line shows, has increased to a record. historically, institutional investors have not been active .n the futures market in the old days, their interest was about 20,000 to 40,000 contracts. since then, the long euro position has been surging. 269,000 last week. big move in sterling today. is polls are showing the get between the conservative party and the labour party has narrowed to five percentage points. a week ago, it was nine percentage points. some polls have put the lead at 27 percentage points in the wake of the manchester bombings and also in the wake of a flip-flop by the conservative party on a social care policy, something investors are concerned about, sending sterling down by 1%. vonnie: getting interesting, that is for sure. back in the u.s., president trump, he is in italy, we are here, but he is wrapping up his first foreign trip. today, he is making his g-7 debut after some tough talks. the summit

the number of funds, $3 trillion of capital now deployed in hedge funds.unbelievable growth story, and like many grow stories, we are going through a period of entrenchment as the dynamics of the plainfield are --nging could it is harder plainfield are changing today. it is causing the second tier players to fall by the wayside. we saw this from the dot com bust. erik: is your position, would you describe it as offense or defense of? tim: it is offense. erik: in what way? tim: in the quest for talent. there are a number of really talented individuals we can bring onto our team in this environment. with firms shutting down, there are a lot of good people that we want to bring into the citadel. with firm struggling, there is a good chance to bring firms into the citadel. erik: how much longer do you think this shakeout in the hedge fund industry will be over? tim: it is not a shakeup for the hedge fund industry, but for active management. right? we see the rise and etf and index products. we're seeing money come out of active management heading towards passi

two hundred $65,000 and i could launch a hedge fund in 1987.that today with less than several hundred million dollars given the high cost of compliance and other regulatory matters you need to deal with. that is really -- has discouraged new businesses in asset management. it is the burden of regulation. the energy space, the transportation space, it is everywhere in america. we regulate is reducing business in america and that is a tragedy. focus onistration's reducing regulatory burdens on the american who has a dream, i applaud that vision. the last administration was very interested in introducing more transparency to the bond market. what about this administration? >> i really hope they follow through on that. transparency is what creates confidence that you have been treated fairly, that you understand what is taking place in the marketplace. transparency is the underpinning of a healthy capital market. opaque, market that is the incumbents enjoy the information advantage of that capacity. for a goodesn't make market. if this administrati

and the broken retail shareholders and highly margined traders and opportunistic hedge fund managers converged to create the selling that looked like the beginning of the real deal decline so many of the bears have been waiting for. the bears were in my in box this morning. i get up at 3:00. i probably went to bed late, i don't know, maybe i had a couple cocktails. anyway, not everybody reacts like those three groups, like the margin traders and hedge funds and scare retail people, not everybody. near the close, we have buyers coming in galore looking for bomb market equivalence. kimberly-clark interest rates in the treasury and plummeting close to 2%. these were up yesterday not uncommon in the trade-off in the academy. the sell-off was only tan gengsly related to trump's legal troubles and only what many think is his pro business legislative agenda because how do you pass laws in these ugly retail sales markets and bond market saying look out, recession in the offering. that causes us to get hammered. whether you believe a slowdown is on the horizon, i don't, what matters is what t

for most hedge fund managers this was likely profit taking. the stock gained 24% during the first three months of the year. hedge funds needed easy trades to show returns after a few lackluster quarters. berkshire hathaway more than doubled his stake to hold 129 million shares, a position worth more than $20 billion based on current prices. yahoo! gained position from appalossa as well as jana, yahoo! had risk to its takeover due to a hack, but that was sorted out by mid-february. then snap. shares saw quite a bounce after disclosures that appalossa third point ers and soros took positions in snapchat. it's unclear whether they still hold them. >>> man group's pierre la grange said he expects confidence in europe po continue fto continue. gemma acton got the chance to talk to pierre. what was he like? he's a big name when it comes to the hedge fund industry. is he still bullish on european equities? >> he is bullish on european equities. we were talking about whether valuations are justified or not. he seemed to think that in the eurozone they

if you look at the hedge fund weighted index, it would be closer to hear.t only is it outperforming the s&p, it is also outperforming hedge funds. why is that? we have a lot of tech stocks in this basket. and even withia, the s&p down from you see it outperforming the s&p even on a bad day, even on a rough week. vonnie: i love that you brought us to los angeles because the weather is getting nice in new york city. try to get a little los angeles sunshine. mark: it is raining here. that is the first time we have had hedge funds the iv stocks on fo. >> i am going to take our viewers across the other side of the atlantic, especially if they are growing tired of the political controversy on the american side because this side of the pond is looking a little better. if you take a look at the top panel here. that is the s&p 500 ratio and you can see the u.k. stops are reasserting their outperformance over there usps because they appear in relative political calm. that is being backed up by economic data. turn your eyes to the bottom panel of this chart. these are

hedge fund managers perhaps being caught unaware. as you noted, we have the likes of iron ore and cover on the rise. that is really giving a boost to commodities players in the region. asian stocks largely on the up following the gain on wall street that pushed he s&p 500 above 2400 for the very first time.we had the nikkei 225 gaining half a percent , going closer to the 20,000 level. look at the singapore stocks. sliding a third of a percent. shares fallingrs for a fifth straight day. when you take a look at resilience, that's the name of the game for the cost be -- kospi, planning about a quarter of a percent. in korea, mark mobius saying he's confident about moon's administration. the domestic situation is looking more certain. pi are seeing the kos becoming the best-performing. the msci world index is the yellow. the cost be up 22%. although global stock markets tend to follow the s&p 500, the kospi may be playing that role for the moment. they suggests say, the next upside for the kospi could be 2600. that is uncharted territor

there was hedging of opportunity -- hedging by the show producers. shale producers.tals, obviously there is nothing material that could change the entire direction of oil prices. yes, they definitely have some ground to say that the fundamentals is not necessarily justifying such a major drop so quickly. >> a couple of sentences, oil prices me end of e year, where will we be? >> oil will stay in the 50 range, perhaps slightly bigger. after the announcement of the next opec agreement, we may see but i have bump, faith it will be in the range of 50 to a little more than that. -> i am running of the euro putting up the euro dollar chart. i was reading today that the market that cheered macro's ,ictory was not for who he was but rather for who he is not. that is a fairy slenr fla irly slender thread to hang the reversal of the euro. >>i agree. the factcomes from that a lot of quarters wanted to support the pen -- le pen. he needs to gain support in the legislative elections, which will be a big challenge for him. timell have a difficult passing proposed reforms. also whe

if a hedge fund manager -- you'll lose enough money in a short period of time. but the vast majority of you are not running hedge funds, you don't need to make money every day, or even every month or year, what you need is a long-term strategy that lets you rake in massive multiyear gains, so you have enough to retire comfortably and send your kids to college. this is not an excuse to hang on to loser stocks of loser companies simply because you hope one day eventually they'll turn afternoon. the ugliest most visicious marks that send everything down, you can take advantage of them as long as you're patient enough, because if you pounce too quickly, you'll end up buying way too close to the top. you have to be careful about what stocks you pick during a bear market. you need to do your home work and look at the stocks and their balance sheet. during a bear market, you must absolutely not buy the stocks that are in the blast radius of whatever's causing the decline like in 200 instead you should search for collateral damage stocks, and if you own anything in the

nonetheless, talking to to your point about hedge funds, the market has been caught off guard.iquidationssome and i expect that to the team to the early part of this week. for the market to stabilize and rebound. >> you mentioned positioning. if you look at the latest data, some moneymakers making bets on $40 a barrel. before we started the show, i was reading the note from goldman and they said they think oil prices will rebound. do you agree with that assessment? tarek fadlallah: i think i do. generally, increasing the view of a $100 oil is something of the past, $80 is also the past. gradually, recalibrating expectations of oil prices. i think that towards the end of the year, we will get a decent pickup and i expect $55 to $60 range. >> i put up a chart for the latest u.s. oil and another uptick. the lines in a blue as they build. and the reference line, do wti price in yellow. also looking at the gadfly columnist, the big question in the oil market is, whether not opec's will extend or not. baked in andmuch what the market is expecting. and also going to raise the game, wi

our hedge funds reporter.news from japan at this hour, industrial production was a slight miss from estimates, but rebounding strongly for the month of april. these are preliminary numbers, month on month, rising 4%. 2.4%.timate was for the year on your numbers slightly shy of what we saw economists were thinking, 5.7%. a robust upward trend we are continuing on. a boost from fiscal stimulus has helped propel industrial profits for a fifth straight quarter. these numbers should be marking the three-year highs. manufacturers trying to meet up with that demand we see externally, trying to boost output. also amid raising capital expenditures and export growth we see in china, as well. slightly off, but much better numbers we're seeing out of japan. you can get a roundup of stories to get your day going with today's edition of daybreak. for bloomberg supports -- subscribers go to dayb on your terminal or go to the bloomberg mobile anywhere app. get the news and industries he you care about. this is bloomberg.