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Saudi Arabia begins an investigation of journalist Jamal Khashoggi's disappearance. Hedge funds offer a sign that the worst of the stock-market selloff may be over. And Michael Novogratz doesn’t see Bitcoin breaking $10,000 until next year. Here are some of the things people in markets are talking about.
Saudi King's "Flat Denial"
President Donald Trump said he’s immediately sending Secretary of State Michael Pompeo to Saudi Arabia to meet with King Salman bin Abdulaziz and suggested that “rogue killers” might be behind the disappearance of journalist Jamal Khashoggi in Turkey. Trump said the king, in a 20-minute phone call, offered him a “flat denial” that the Saudi government was behind Khashoggi’s disappearance and possible murder. A Saudi official said the kingdom has begun an investigation ordered by the king, which is separate from a joint probe with Turkish officials. The kingdom is preparing a report saying Khashoggi’s death was the result of an interrogation that went wrong, CNN’s Brian Stelter said in a tweet, citing two unidentified people.
A $22 Billion Test of Values
Masayoshi Son has already paid a price for his close ties to Saudi Arabia. It could soon go much higher. Son’s SoftBank Group Corp. plummeted the most in more than two years on Monday after Saudi Arabia came under fire over the disappearance of journalist Jamal Khashoggi. The kingdom is the biggest outside investor in SoftBank’s $100 billion Vision Fund, which has backed Uber Technologies Inc., WeWork Cos., Didi Chuxing and Slack Technologies Inc.
Hedge Funds May Be Almost Done Dumping Stocks
One quantum of solace for bruised stock bulls: Some of the usual suspects behind last week’s rout may be done frightening markets. Equity long-short hedge funds are among the worst-performing categories this month, along with risk-parity investors and balanced mutual funds, according to JPMorgan Chase & Co. — a sign they helped fuel the market slump. With that exposure slashed amid the carnage, the big deleveraging could now be over, according to the bank’s strategists. Still, U.S. stocks were down Monday, while the dollar dropped as investors weighed a growing list of global concerns against a backdrop of strong economic growth.
Yen Cements Status as Haven of Choice
There’s only one trade to make in foreign-exchange markets when investors are running away from risk: buy the yen. That’s the view of analysts at Citigroup Inc. who compared the performance of the Japanese currency with the Swiss franc’s on days when the S&P 500 Index incurred losses of 2 percent or more. While Switzerland’s currency was clearly the better haven before the global financial crisis of 2008, the yen has “emphatically” taken the top spot since then, according to a note from analysts including Calvin Tse. The yen certainly proved itself to be the stronger of the two last week. It surged by almost 1.4 percent against the greenback in a period that saw the American equity benchmark record two consecutive daily declines of more than 2 percent. The franc rose just 0.6 percent over the same period.
Novogratz Sees 2019 Bitcoin Rally
Michael Novogratz, one of the most prominent investors in digital currencies, reiterated that he doesn’t expect big moves in the price of Bitcoin until institutional investors jump in, perhaps in the first half of next year. “One thing you learn in this process is that everything takes a little longer than you hoped it would,” Novogratz said in a Bloomberg Television interview. “I don’t don’t see us breaking $10,000 by the end of the year.” Novogratz’s Galaxy Investment Partners will be one of the first customers of a digital asset unit announced Monday by Fidelity Investments during a conference sponsored by the two companies and Bloomberg LP, the parent of Bloomberg News.
What we’ve been reading
This is what caught our eye over the last 24 hours.
- Microsoft co-founder Paul Allen has died aged 65.
- China has more mega-banks than any other country.
- The U.S. budget deficit keeps growing.
- May and Macron strike a dovish tone before the big Brexit summit.
- Japan's plan to allow more foreign workers meets protests.
- Palm is planning a comeback.
- Australia wrestles with saving the Great Barrier Reef.
- Where to invest $10,000 right now.
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