So George Soros has been whining at Davos about the hellish lives of hedge-fund managers these days.
Perhaps it makes sense, then, that “The Man Who Broke the Bank of England” also chose to make Davos his platform for announcing his retirement (and he really means it this time). Seems the job is not so fun anymore.
Soros says since the crash of 2008, financial markets and international affairs have been closer and closer intertwined, making things hairy.
“This has greatly increased the level of uncertainty, volatility and unpredictability, both in financial markets and international affairs... So the increased interaction between the two is experienced as external shocks by both,” Soros said, speaking at a dinner in Davos yesterday. For example, together, financial sanctions and the collapse of oil prices have caused a financial crisis in Russia. But on their own, neither would trigger that.
And here it comes: “This has made the job of hedge-fund managers hellishly difficult. Great opportunities mostly missed or experienced as shocks,” says Soros. Owen Li, your excuse-ship has come in.
Still, between his favorite topics of Russia and Ukraine, he also snuck in a market prediction: “The heightened uncertainty and volatility makes me less bullish than the markets because they militate against risk taking and reinforce the lack of investment demand,” Soros says.
The volatility view is no flash of Soros genius. Everyone knows we’re in for a bumpy year. But he does seem a little freaked-out about markets. Who knows what the Soros minions are doing in the meantime? We’ll know at the next 13F round — and even then it’ll be a backwards view. He also said later that the ECB’s asset-buying program will create bubbles in the region’s asset markets.
ZeroHedge was also hopping on the “Apocalypse Now” theme: “When credibility in central-bank omnipotence snaps, buckle up. Risk will get re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.”
Yes, lots of slow-clapping for the ECB this morning, with Lindsey Group’s Peter Boockvar joining in: “What investors witnessed yesterday was “the final climax in the more than 6 years of historic central-bank action, and thus asset prices are extremely vulnerable, particularly the riskiest kind — stocks — if the underlying economic and underlying fundamentals don’t support current multiples, which I believe they don’t.”
But for now, things look set to fall apart in currencies. And we’ve still gotGreek elections to get through before U.S. investors can mind their own business again.
Key market gauges
After Thursday’s ECB -fueled record gains, stock futures are pointing north, with futures on the Dow YMH5, -0.10% and the S&P ESH5, -0.06% in the black, but it’s not amazing.. Europe SXXP, +1.74% still has Mario’s wind beneath its wings and it’s soaring. Up 2% last check.
That’s in sharp contrast to the hell going in forex right now. It was a volatile Asian session and forex action promises to dominate trader’s screens today. The euro EURUSD, -1.09% has broken under $1.12 to 11-year lows, unable to resist the gravitational pull from the ECB. The Australian dollarAUDUSD, -1.42% has dropped below 80 U.S. cents, to the lowest since mid-2009.
Gold prices GCG5, -0.85% are stuck under $1,300 an ounce. But oil is upCLH5, -1.23% as the death of King Abdullah has put the fear of the unknown into crude — a short-term support. Longer term, this means little, say some.
The quote of the day
“It will work because it’s big, because it’s strong, and because it’s open-ended.” — ECB executive board’s Benoit Coeure speaks to CNBC, post-bazooka.
Earnings
Some big names hit ahead of the bell. Both GE GE, +1.92% and HoneywellHON, +4.06% posted profit that topped expectations. Both share are up, but Honeywell is doing better than GE. McDonald’s MCD, -1.20% is up after results, and Rockwell ROK, -0.73% is not doing much even as profits rose above forecasts.
Here’s a roundup of what analysts are expecting from those companies.
Starbucks SBUX, +6.21% shares popped up nearly 5% premarket. After the close Thursday, the coffee giant posted strong earnings and named its No. 2. Also, E*Trade Financial ETFC, +8.74% may follow up late-session gains with more, after posting higher-than-expected revenue.
Maxim Integrated Products MXIM, +2.48% is up 5% after the integrated-circuit maker posted better-than-expected results.
The economy
A few points of data to close out the week: the Chicago Fed national activity index due at 8:30 a.m. Eastern, then existing-home sales and leading indicators, both coming at 10 a.m. Eastern.
The buzz
Online storage provider Box has finally priced its IPO — $14 a share. Here’s what you need to know.
Apple AAPL, +0.82% CEO Tim Cook’s salary got a 40%-plus bump last year. Some Twitter observations:
DreamWorks DWA, -9.29% announced those rumored job cuts. Some 500 positions will go, and the company will focus on two films a year. But shares rose in late trade.
J.P. Morgan JPM, -0.67% CEO Jamie Dimon is getting a raise, says The WSJ. Dimon was talking in Davos about how great the U.S. is, except for one huge problem.
UPS UPS, -9.67% is tanking 9% after warning of disappointing fourth-quarter and full-year headwinds and currency upheaval.
