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The Trader's Edge

These billionaire investors just lost big in the stock market

Even the best investors don’t like the look of their returns.

If you’ve been avoiding checking your stock performance for the month, it might be comforting to know you’re in good company. Some of the United States’ most prominent hedge fund honchos, including David Einhorn, Daniel Loeb, and Barry Rosenstein, just reported significant losses for September.

The three investors’ funds reported losses in September due to global market volatility set off by concerns that China’s economy is slowing, according to Reuters. Greenlight Capital, the $11 billion fund run by Einhorn, fell 3.6% in September; Loeb’s $17.5 billion fund fell 4.8%; Rosenstein’s $11 billion Jana Partners slid 3.8%.

hedge_fundEinhorn is now down 17% for the year, putting the investor on track for his second losing year ever since opening Greenlight in 1996. The first and only year in which Einhorn has reported a loss was 2008.

Most money managers are still finalizing their month’s numbers. Judging by these early reports, though, it’s likely that big losses were sustained across the investing world.


Unemployment rate to decline but Fed liftoff to hold until March: RBS

It’s all about the economy as investors look for any clues on the health of the U.S. economy as the volatility on Wall Street continues.

As we head into the fourth quarter, the markets may be looking forward to putting the vicious third quarter behind. But the American consumer doesn’t seem to be phased by the stock market sell-off.

Both the August consumer spending data and September’s consumer confidence index rose. “I think what we’re seeing is a resilience among American households here, in the face of some volatility in the equity markets,” said Michelle Girard, the Chief Economist at Royal Bank of Scotland (RBS).

“The U.S. economy is in pretty solid shape, the concerns are more about global growth and I think that may explain why it’s easier for consumers to feel that things are still okay even though the equity market has been under pressure,” she added.

j_yellenStill, the big question for investors is – when will the Fed start to raise interest rates? According to a Bloomberg survey, 84% of economists polled on September 25-28 expect an initial interest-rate increase in December.

Even Fed Chair Janet Yellen said she still thinks a rise is likely in 2015 if the economy develops as forecast. But Girard disagrees, “year-end is a tough time to be raising interest rates.”

She added, “I think it’s going to be tricky so that’s why my best guess is that they probably may end up having to wait until March to make that first move.”

The labor market is a key data point the Fed is keeping an eye on. “I think Friday’s numbers are going to show the U.S. labor market does remain very solid,” said Girard.

“I actually think unemployment will hold at 5.1% for September but I think year-end, it’s going to be below 5%,” she said.


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