Investors pull $1 billion from Pimco Total Return Fund in May

NEW YORK Investors pulled approximately $1 billion from the Pimco Total Return Fund, one of the world's largest bond funds, in May following cash withdrawals of the same amount the previous month, the Newport Beach, California-based firm said on Thursday.Pimco said the Total Return Fund's assets under management stood at $86.1 billion as of month-end May, down from $87 billion as of the end of April and $89.9 billion at the end of 2015, Pimco said in a statement. The Pimco Total Return Fund hit a peak of $292.9 billion in assets under management in April 2013.May's cash withdrawals from the Pimco Total Return Fund marks the portfolio's 37th month of consecutive outflows, according to Morningstar data."Investors continue to wait for more evidence of a strong record of performance under current management of Pimco Total return before reinvesting," said Todd Rosenbluth, director of exchange-traded and mutual fund research at S&P Global Market Intelligence. "Assets have gravitated toward funds with both strong records and long tenured management both at Pimco and at other asset managers such as DoubleLine Capital," he said. Indeed, the Pimco Income Fund, overseen by Group CIO Dan Ivascyn, saw $1.8 billion in inflows in May and has received inflows of $21.5 billion collectively for all of 2015 and so far in 2016, according to the Pimco. The Pimco Income Fund now has assets under management of $59.8 billion, Pimco said. For May, the Pimco Total Return Fund returned 0.27 percent after fees, outperforming the benchmark return of 0.03 percent. But through May, the Pimco Total Return Fund has posted year-to-date returns of 2.51 percent after fees, trailing the benchmark which has returned 3.45 percent year-to-date.Like BlackRock Inc and Janus Capital Group Inc, Pimco adds dividend reinvestments into its inflow figures. Research organizations such as Morningstar and the Investment Company Institute, along with many fund managers, including Vanguard, Fidelity and DoubleLine, exclude reinvestments and treat only fund share purchases as inflows. Pimco said in a statement that credit positioning among corporates, municipals and Emerging Markets hard currency debt added to performance of Pimco Total Return Fund. "Interest rate strategies, particularly non-U.S. positions in Mexico and the United Kingdom, hurt performance," Pimco said. (Reporting by Jennifer Ablan; Editing by James Dalgleish and Alan Crosby) Read more

Wall Street hits 'pause' after two-day surge

Wall Street treaded water on Thursday following two days of strong gains as advancing utilities offset declines in materials, banks and other cyclical industries.Investors this week have grown more comfortable with expectations the Federal Reserve could raise interest rates as soon as June, with many taking the view that such a hike would reflect improvement in the country's economy.After gaining 2 percent over the previous two sessions, the S&P 500 traded flat, with a 1.1 percent dip in the materials index .SPLRCM partly offset by a 1.06 percent rise in utilities .SPLRCU."People are taking their foot off the gas after making a bunch of money, and now they're waiting for the next data point," said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management in New York. In line with other policymakers who have spoken in recent days, Fed Governor Jerome Powell said a rate hike may come "fairly soon" if data confirms the U.S. economy is continuing to grow and labor markets are still tightening.Data showed that while orders for U.S. durable goods surged in April, business spending plans continued to show signs of weakness, suggesting the manufacturing rout was far from over. Trading near 16.5 times expected earnings, the S&P 500 appears fairly priced, said Michael Mussio, managing director with FBB Capital Partners. "We’re not expecting any significant increase in earnings for the S&P 500 this year compared to last year," he said.The Dow Jones industrial average .DJI dipped 23.22 points, or 0.13 percent, to end at 17,828.29 points and the S&P 500 .SPX edged down 0.44 points, or 0.02 percent, to 2,090.1.The Nasdaq Composite .IXIC added 6.88 points, or 0.14 percent, to 4,901.77.Muted volume suggested that some investors had already checked out ahead of an upcoming long weekend, with U.S. stock markets closed on Monday for the Memorial Day holiday. Just 5.8 billion shares changed hands on U.S. exchanges, well below the 7.2 billion daily average for the past 20 trading days, according to Thomson Reuters data.Apple (AAPL.O) shares rose 0.79 percent, providing the largest boost to the S&P 500, while Citigroup (C.N) fell 1.77 percent, weighing most on the index. Discount retailers Dollar General (DG.N) rose over 4 percent and Dollar Tree (DLTR.O) rallied nearly 13 percent, both hitting record highs after reporting better-than-expected quarterly profits.Abercrombie & Fitch (ANF.N) shares slumped 15.67 percent after the retailer posted its 13th straight quarter of sales declines. Costco Wholesale (COST.O) rose 3.58 percent a day after posting quarterly earnings. In extended trade, GameStop (GME.N) tumbled 7 percent after the videogame retailer reported a decline in quarterly revenue.Advancing issues outnumbered declining ones on the NYSE by 1,552 to 1,449, while on the Nasdaq, 1,507 issues fell and 1,269 advanced.The S&P 500 posted 22 new 52-week highs and 1 new low; the Nasdaq recorded 55 new highs and 26 new lows. (Additional reporting by Ankur Banerjee in Bengaluru; Editing by Dan Grebler and Nick Zieminski) Read more

More than 25,000 Madoff victims now eligible for $4 billion fund

NEW YORK The overseer of a $4 billion U.S. Department of Justice fund for victims of Bernard Madoff's Ponzi scheme said he expected to recommend payouts for at least 25,280 claimants with nearly $4 billion in fraud losses.Richard Breeden, special master of the Madoff Victim Fund, said in an update on his website this week that his office was "substantially" finished with the initial claims review process, having analyzed 63,580 claims covering $67.8 billion of alleged losses.While there is no timetable for payouts, the announcement suggests that many Madoff victims may soon see the end of their 7-1/2-year wait to recoup at least some losses.Madoff's fraud was uncovered in December 2008. The swindler, now 78, pleaded guilty three months later, and is serving a 150-year prison term for running what federal prosecutors called a $64.8 billion Ponzi scheme. "It sounds like it is good news for claimants," said Daniel Krasner, a partner at Wolf Haldenstein Adler Freeman & Herz in New York, whose clients have submitted dozens of claims to Breeden. "They could end up with a significant portion of their claims."Payouts would be separate from those being made by Irving Picard, a court-appointed trustee liquidating Bernard L. Madoff Investment Securities LLC, to the swindler's former customers. Breeden's fund also differs because he is allowing claims by "indirect" investors who had accounts at "feeder funds," hedge funds, banks and other entities that sent their money to Madoff.In his update, Breeden said he expected to reject payouts on 7,540 claims covering $25.7 billion of alleged losses. Breeden has also told holders of 30,760 "incomplete" claims covering $27 billion of alleged losses that they have until early July to fix deficiencies. Another 1,000 claims, some of which involve swaps and derivatives, have yet to be reviewed."Completing the initial review of claims is a major milestone in the case, and it brings us a big step closer to the cash distributions we all want to see," said Breeden, a former chairman of the U.S. Securities and Exchange Commission.Breeden said he planned to file formal payout recommendations with the Justice Department by the end of August. He was not immediately available on Wednesday for comment.Picard has paid out roughly $8.6 billion of the $11.1 billion he has recouped, according to his own website. Read more

Asian stocks tread water on wary outlook; bonds firm

HONG KONG Asian shares hovered near a two-month low on Wednesday, as investors shrugged off an overnight rally in global stocks and looked to bonds in the absence of signs of a sustainable recovery in China and other emerging markets. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was flat after spending most of the morning session in negative territory. On Tuesday, it hit an eight-week low.Reflecting the cautious mood in Asia, European shares were expected to open broadly steady.Hong Kong shares .HSI led regional stocks lower with the benchmark index falling 0.8 percent, followed by Korea .KS11 down 0.03 percent and Taiwan .TW11 losing 0.3 percent. They are most vulnerable to weakness in the Chinese economy.While strong March data out of China had raised hopes that its economy was turning the corner, mixed data so far in April and surging debt levels in a variety of industries has fueled doubts about the sustainability of any recovery in growth.A front page article in the official People's Daily this week that said China's economic trend would be "L-shaped" reinforced investors' doubts over the stock market's potential."You don't expect a bull market in an L-shaped economy," said David Dai, Shanghai-based investor director at Nanhai Fund Management Co.Japanese shares were among the rare bright spots in the region, with the Nikkei .N225 up 0.3 percent as the yen moved further away from the 18-month highs against the dollar struck last week. Overall sentiment remained cautious. "I'd think the markets are supported by lack of negative news flows. It's not that we have clear reason to be positive about the global economy but there may be a bit of unwinding in excessively pessimistic bets," said Hirokazu Kabeya, chief global strategist at Daiwa Securities.On Tuesday, MSCI's broad gauge of global stocks .MIWD00000PUS climbed nearly 1.1 percent, its best session in about a month. The U.S. S&P 500 .SPX jumped 1.3 percent, tallying its best day in two months. Bonds remained well supported, indicating investors were wary about the prospects for riskier assets in the near term in an environment of sluggish global growth.An auction of three-year U.S. notes on Tuesday was received well. Yields on 10-year debt US10YT=RR were at 1.75 percent, not far away from a 2016 low of 1.53 percent. Japanese government bonds also reflected the cautious undertone in global markets, with the yield 10-year bonds JP10YT=RR staying stuck in a narrow range around 0.095 percent.In credit markets, a high yield corporate bond Exchange traded fund (ETF) (HYG) and its investment grade ETF counterpart (LQD) have risen in recent weeks indicating a growing preference for bonds.In the currency market, the yen stayed on the defensive, following two sessions of steep declines after Japanese officials stepped up warnings about potential intervention to weaken the currency. The yen JPY= was trading at 108.76 to the dollar, having slipped 3 percent from its 18-month high of 105.55 set on May 3. The dollar got broad support from comments by a top Federal Reserve official last week, which kept alive otherwise diminishing hopes of a Fed interest rate hike following soft U.S. payrolls data last Friday. New York Fed President William Dudley said that it was reasonable to expect the U.S. central bank would raise interest rates twice in 2016. The dollar's index against a basket of six major currencies .DXY =USD rose to a near two-week high of 94.150 on Tuesday and last stood at 94.124, having recovered 2.5 percent from its 16-month low touched on Tuesday last week. The euro EUR= traded at $1.13820, retreating further from a 2016 high of $1.16160 tested last week. Oil prices were supported by disruptions to crude supplies in Canada, Nigeria and elsewhere. Brent crude futures LCOc1 dipped to $45.28 per barrel, having jumped 4 percent on Tuesday. U.S. crude futures CLc1 were at $44.40 per barrel. Both were off about 0.5 percent. (Additional reporting by Hideyuki Sano in TOKYO and Samuel Shen in SHANGHAI; Editing by Shri Navaratnam and Kim Coghill) Read more

Exclusive: Say goodbye to OPEC, powerful Putin pal predicts

MOSCOW Internal differences are killing OPEC and its ability to influence the markets has all but evaporated, top Russian oil executive Igor Sechin told Reuters in some of his harshest remarks ever about the oil cartel.Russia, which has been hit hard by the oil price collapse, was flirting with the idea of cooperating with OPEC in recent months until tensions between OPEC members Saudi Arabia and Iran ruined a global deal to freeze output.Sechin - one of the closest allies of President Vladimir Putin - was the only Russian official to consistently oppose the deal with OPEC even after the Kremlin effectively endorsed the plan.Now that his gloomy predictions about talking to OPEC have come to pass, Sechin feels vindicated and wants to help Russia avoid similar embarrassment in future."At the moment a number of objective factors exclude the possibility for any cartels to dictate their will to the market. ... As for OPEC, it has practically stopped existing as a united organization." "The company (Rosneft) was skeptical from the very beginning about the possibility of reaching any sort of joint agreement with OPEC's involvement in current conditions," said Sechin, in comments over the weekend which were embargoed until Tuesday. "Just to remind you, the only one question with which we responded to those who were interested to know our position: 'Who should we agree with, and how?' The development of the situation has clearly shown we were right." Sechin's comments about the end of the era when OPEC could influence prices chime with those of Saudi Arabia's newly appointed energy minister Khaled al-Falih. Falih, who took over on Saturday from long-serving Ali al-Naimi, has been very vocal in the past year about his views that the oil market needs to rebalance through low prices and that the Saudis have the resources to wait. Falih's ultimate boss, Deputy Crown Prince Mohammed bin Salman, who oversees Saudi oil policies, has also signaled that the world is moving to a new era where supply and demand rather than OPEC will determine prices. Sechin, who was born in 1960 - the same year as Falih - is also calling on Russia to abandon any hope that prices can be fixed by anything other than market rebalancing."At the moment, key factors which are influencing the market are finance, technology and regulation. We can see this with the example of shale oil which ... became a powerful tool of influence on the global market," Sechin said in the emailed comments. (Writing by Katya Golubkova and Dmitry Zhdannikov; Editing by Andrew Osborn and William Hardy) Read more

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