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On July 2, CICC published a Hong Kong stock strategy report, stating that the macro environment of Hong Kong stock industry rotation is: "Fund abundance + asset shortage = index volatility + extreme structure". The reason why the market presents this index volatility, but the characteristics of active structural market are determined by the three macro environments of insufficient overall economic returns, structural bright spots, and abundant funds. For the market, the Hang Seng Index has been fluctuating in the range of 23,000 to 24,000 points given by the bank in the past month. The corresponding risk premium and the optimistic sentiment are already equivalent to the high point in early October last year, so further optimism also requires more catalysts. CICC suggests that investors can moderately reduce their positions in the short term, or switch to AI Internet, which is expected to have a stable dividend and has cooled significantly compared with the beginning of the year, and wait for subsequent opportunities. If there is a large fluctuation, it can intervene more actively and buy back high-quality assets at a lower cost, but the premise is to keep the "bullet".Futures July 2, Economies.com analysts latest view today: Brent crude oil futures prices fluctuated, affected by the stability of the key support level of $66.50. If the subsequent price continues to remain stable, it will provide bullish momentum. However, in the short term, the bearish correction wave dominates the market, but because it is trading below EMA50, coupled with the negative overlap signal on the RSI, the negative pressure continues.Data released by BYD Denza Auto showed that it sold 15,783 vehicles in June, a year-on-year increase of 28.6%.According to the Asahi Shimbun: Japanese Economic Revitalization Minister Ryo Akasawa is planning to travel to the United States this weekend for trade negotiations.According to the Los Angeles Times: Paramount agreed to pay $16 million to settle Trumps lawsuit against CBSs "60 Minutes" program.

Melvin Capital Will Close Following Huge Losses on Meme Stocks And A Market Decline

Charlie Brooks

May 19, 2022 10:01

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Melvin Capital, formerly one of Wall Street's most successful hedge funds that lost billions in the meme stock saga, will cease operations following this year's market decline.


After years of double-digit profits, Gabe Plotkin, widely considered as one of the industry's greatest traders, told investors that the past 17 months have been "very difficult."


Plotkin was attempting to turn around the company after being discovered betting against retail favorite GameStop (NYSE:GME) in early 2021 and being blindsided by falling markets this year.


"The proper next step is to wind down the Funds by fully selling the Funds' assets and accounts and delivering cash to all investors," Plotkin said in a letter that Reuters obtained on Wednesday.


At the end of April, Melvin Capital held assets of $7.8 billion. In the first four months of 2022, the fund had a 23 percent loss, according to a source acquainted with the firm's accounts.


The losses this year follow significant losses in 2021, when Melvin Capital finished the year down 39 percent. The firm wagered that GameStop's stock would decline, but lost when ordinary investors took the opposite position and drove the stock soaring.


The company's assets were $12.5 billion at the start of 2021.


Plotkin stated in his letter that he had already obtained a large amount of cash and reduced the funds' exposure.


Plotkin's representative declined to respond.


Powerful investors, including Citadel LLC and Point72 Asset Management, where Plotkin had worked, continued to back Melvin for a time, investing billions in emergency funds in early 2021 amid the massive stock losses.


Plotkin informed investors earlier this year that he intended to reorganize and reduce assets from around $8.7 billion to $5 billion, while temporarily reducing fees. Investors responded vehemently to the ideas, and Plotkin was subsequently obliged to apologize and admit he had made an error.


Plotkin announced on Wednesday that he had begun selling the portfolio and will cease charging management fees beginning June 1. He also stated that he "gave everything" he had, but that it was insufficient to "bring the expected returns."


Melvin's largest investments at the end of the first quarter included Live Nation Entertainment (NYSE:LYV), Hilton Worldwide Holdings (NYSE:HLT), Amazon (NASDAQ:AMZN), and Datadog (NASDAQ:DDOG). In recent weeks, their stock prices have fallen substantially, sparking rumors that a hedge fund may be attempting to unwind bets.


Plotkin was a top investor at Steven A. Cohen's hedge fund, formerly known as SAC Capital Advisors, but he resigned in 2014 to start his own company after SAC pled guilty to criminal insider trading allegations. Melvin Capital gained 52.5% by the end of 2020, the year the epidemic began, after attracting the attention of influential investors and achieving rapid growth.


Melvin enjoyed average annualized gains of 30% from 2014 to 2020. Since its inception, the fund has returned an annual average of 11.9%.

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