Latest news with #Sohn
CNBC
2 days ago
- Business
- CNBC
The market's biggest trades sending skeptical message on U.S. stocks
This year has already packed a lot of action into stocks: an aggressively bullish start, a swift correction, and a full recovery from those April losses. But based on the the flows into the U.S. exchange-traded funds, where much of the daily trading action occurs across asset classes, the message coming through most clearly from investors is lingering skepticism about the strength of the U.S. equities market. May was a great month for stocks, with the S&P 500 Index up over 6%, the Nasdaq Composite up over 9%, and the Dow Jones Industrial Average up roughly 4%. But making up for April's losses hasn't removed the underlying fears from the market, with stocks sliding to start the month of June on Monday as trade uncertainty, from the state of U.S.-China deal talks to the Trump administration's battle with courts over the legality of tariffs, continue to serve as hurdles for sustained momentum. At the start of 2025, equity ETFs were trading roughly $3 billion in daily inflows, an "extreme" level of bullishness, according to recent report from Strategas Securities. Since the market recovered all of its April losses, those daily inflows have fallen by more than half, to roughly $1.4 billion, despite the rally. Where has the money been going? "Mostly, just hiding out in ultra-short duration," said Todd Sohn, senior ETF and technical strategist at Strategas, on a recent "ETF Edge" podcast. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF (BIL) are both among the top 10 ETFs in investor flows this year, taking in over $25 billion in assets. "Skepticism, that's what the equity flows are telling us," said Sohn of the action since the market low in April. He added this suggests a year that could follow a pattern from bull market history, what he called a "reset year." Going back to 1950, years one and two of a bull market generate linear returns that take all equities higher, while third years are more often reset years that tend to reflect a cautious stance on stocks. Or, as Sohn put it: "How much of a good thing can last is a fair question." Since getting back to even, the U.S. market's 0.6% performance year-to-date through the end of May places it at the bottom of the list for 2025 relative to the performance of regional markets around the world, though it is by no means the worst country market in the world. But at least to date, the ETF flows do suggest a "year three" of a bull market cycle, which tends to more often be a trader year than investor year, with a wide dispersion in returns across equity sectors, according to Sohn. Coming off back-to-back years with 20 percent-plus returns for U.S. stocks, the top ETF categories in flows since the April 8 low are crypto, short duration bond, T-bill ETFs, and value (including overseas value stocks such as EAFE ETFs). Meanwhile, tech ETFs, single-stock levered ETFs, and cyclical and small-cap stock ETFs that are most closely linked to aggressive stock bets and conviction about the overall health of domestic economy are near the bottom of the list, with negative flows since the April low. "Folks want to hang out on the short-end of the [bond yield] curve and are very skeptical on what to do about U.S. equities," said Sohn. "It's almost like they are throwing in the towel on cyclicals and small-caps," he added. Part of the reason for the lack of interest in cyclicals is related to the yields currently on offer in the bond market, which can make cyclical plays with healthy dividend levels, such as consumer staples, financials, industrials, and materials, less attractive to investors who might otherwise assume the stock market risk for the income component. "That has disappeared with the return of bond yields," said Sohn. "There's not really any reason to hold," he added, as all the income flows that in the past may have gone into income-producing equities go to short duration bond ETFs instead. One place where investors should keep the faith with U.S. corporations is with their ability to fund bond payments, Joanna Gallegos, BondBloxx ETFs co-founder, said on "ETF Edge." After the strong years of 2023 and 2024, corporate credit sheets are "set up to weather the storm," Gallegos said, and she added that it is possible to stay shorter in corporate credit without exposing oneself to a high level of interest rate risk. After short duration bonds and T-bills, intermediate duration bonds have seen the most daily ETF flows since the April low among fixed-income categories, and are fifth overall in flows among stock and bond ETF asset classes, according to Strategas. Unlike equities, most fixed income categories have had positive returns year to date, even with yields near their highest levels in years, according to BondBloxx data. "Income is back. In fixed income, that's what is important right now," she said. "Any investor trying to offset volatility in their equity portfolio, if they haven't looked at how income is serving their portfolio, that's what they should do," Gallegos said. While Gallegos recommends investors consider investment grade credits in the BBB class, where yields are near 5%, and the first rung of the high-yield universe, BB, where yields are roughly 6%, short-duration yields are the most popular right now for a good reason. "It is hard to argue with 4-4.25% with no volatility," Sohn said. Disclaimer
CNBC
3 days ago
- Business
- CNBC
Investors are piling into big, short Treasury bets alongside Warren Buffett
Investors always pay close attention to bonds, and what the latest movement in prices and yields is saying about the economy. Right now, the action is telling investors to stick to the shorter-end of the fixed-income market with their maturities. "There's lots of concern and volatility, but on the short and middle end, we're seeing less volatility and stable yields," Joanna Gallegos, CEO and founder of bond ETF company BondBloxx, said on CNBC's "ETF Edge." The 3-month T-Bill right now is paying above 4.3%, annualized. The two-year is paying 3.9% while the 10-year is offering about 4.4%. ETF flows in 2025 show that it's the ultrashort opportunity that is attracting the most investors. The iShares 0-3 Month Treasury Bond ETF (SGOV) and SPDR Bloomberg 1-3 T-Bill ETF (BIL) are both among the top 10 ETFs in investor flows this year, taking in over $25 billion in assets. Only Vanguard Group's S&P 500 ETF (VOO) has taken in more new money from investors this year than SGOV, according to data. Vanguard's Short Term Bond ETF (BSV) is not far behind, with over $4 billion in flows this year, placing with the top 20 among all ETFs in year-to-date flows. "Long duration just doesn't work right now" said Todd Sohn, senior ETF and technical strategist at Strategas Securities, on "ETF Edge." It would seem that Warren Buffett agrees, with Berkshire Hathaway doubling its ownership of T-bills and now owning 5% of all short-term Treasuries, according to a JPMorgan report. "The volatility has been on the long end," Gallegos said. "The 20-year has gone from negative to positive five times so far this year," she added. The bond volatility comes nine months after the Fed's began cutting rates, a campaign it has since paused amid concerns about the potential for resurgent inflation due to tariffs. Broader market concerns about government spending and deficit levels, especially with a major tax cut bill on the horizon, have added to bond market jitters. Long-term treasuries and long-term corporate bonds have posted negative performance since September, which is very rare, according to Sohn. "The only other time that's happened in modern times was during the financial crisis," he said. "It is hard to argue against short term duration bonds right now," he added. Sohn is advising clients to steer clear of anything with a duration of longer than seven years, which has a yield in the 4.1% range right now. Gallegos says she is concerned that amid the bond market volatility, investors aren't paying enough attention to fixed income as part of their portfolio mix. "My fear is investors are not diversifying their portfolios with bonds today, and investors still have an equity addiction to concentrated broad-based indexes that are overweight certain tech names. They get used to these double-digit returns," she said. Volatility in the stock market has been high this year as well. The S&P 500 rose to record levels in February, before falling 20%, hitting a low in April, and then reversing all of those losses more recently. While bonds are an important component of long-term investing to shield a portfolio from stock corrections, Sohn said now is also a time for investors to look beyond the United States with their equity positions. "International equities are contributing to portfolios like they haven't done in a decade" he said. "Last year was Japanese equities, this year it is European equities. Investors don't have to be loaded up on U.S. large cap growth right now," he said. The iShares MSCI Eurozone ETF (EZU) is up 25% so far this year. The iShares MSCI Japan ETF (EWJ) Japan ETF is up 25% over the last two years.
Business Insider
3 days ago
- Business
- Business Insider
Why Oasis Management's Seth Fischer traveled across the world to do 10-minute pitches at 3 conferences in 16 days
There are road warriors, and then there's Seth Fischer. The founder of Oasis Management, a Hong Kong-based hedge fund, Fischer was at the dais at the Sohn conference's flagship New York event on May 14, pitching Japanese electronics manufacturer Kyocera. Two weeks later, the Israel Defense Forces veteran was in Canada at Sohn's inaugural Montreal event, where he presented on Round One, a Japanese arcade chain that has expanded to the US. Friday, he was back home in Hong Kong — and speaking from the Sohn podium about Round One again, calling the company's CEO, Masahiko Sugino, a wizard. In between all the presentations, he also visited Switzerland and Israel, he told Business Insider in an email. He said he's happy to help the Sohn Foundation, which focuses on childhood cancer research and prevention and is named after Ira Sohn, a young finance professional who died from cancer at the age of 29. The conference has been a staple in the investment management industry's calendar for decades, with Greenlight founder David Einhorn, Point72 CEO Steve Cohen, and D1 Capital boss Dan Sundheim among the big names who have previously spoken. Many who speak at the event pitch an investment idea, often a stock, in 10 minutes or less. The Sohn Foundation in Hong Kong works with the Karen Leung Foundation, which was started in honor of Fischer's former colleague, who died of cancer in 2012. Fischer is a cofounder of the Karen Leung Foundation. "We think it's a great cause, so really just happy to help. We're currently closed to new investors, so this is not a marketing trip," said Fischer, who declined to share the firm's current assets under management. He is equally passionate about the companies he pitched and Japanese equities in general. He wrote that corporate governance adoption should be a boon for the Asian nation's stocks. "Value is being unlocked by better management, ending related party transactions, enhancing margins, having accountability at the board level, and improving shareholder returns," said Fischer, who founded Oasis in 2002 after seven years at Glenn Dubin and Henry Swieca's Highbridge Capital. He said he gets adjusted to new time zones and cities by running — he logged miles in three different continents this past week — and by being "very serious" about sleeping on planes. "For fun, I'm running, reading, and listening to podcasts and Audible," he said. He just finished "Everything is Tuberculosis", John Green's latest book on the disease. "Maybe that doesn't make me sound like too fun of a guy, but it's been a very good listen."
Mint
6 days ago
- Business
- Mint
Hedge Funds Return to Sohn Hong Kong After Mixed Year for Bets
(Bloomberg) -- After a tumultuous 12 months, it's no small achievement that the Sohn investment conference returns to Hong Kong on Friday with the better half of last year's picks having made money. Hedge fund managers will present their ideas at the Sohn Hong Kong Investment Leaders Conference as financial markets gyrate, with global growth and supply chains under threat and geopolitics mired in escalating tensions. It was against this unfolding backdrop that some of last year's investment ideas generated handsome returns, while others failed to pay off. Below are the winners and losers from the May 23, 2024 event. The call: Kaname Capital co-founder Toby Rodes last year argued there was room to increase shareholder value at the Japanese second-hand car listing platform. He called on its chairman to stop pursuing low-quality acquisitions including a basketball team, a hamburger chain and strawberry farms. Rodes pushed for a more independent board and a structure where the founder owns the company but doesn't control operations. The outcome: It was last year's best-performing idea. Kaname engaged with Proto's independent directors and seized on the share price decline to build up a stake that peaked at 8.5%, Rodes said. Proto's chairman decided to take it private through a management buyout. Kaname balked at the tender offer price as being too low. Following extensions to the offer deadline, Proto is on track to be privatized 59% above the closing price on the day of last year's event. The call: CloudAlpha Capital Management founding partner Chris Wang made a bullish call on the power machinery maker, saying electricity distributors and equipment makers stand to benefit from artificial intelligence developments. The South Korean company traded at a discount to global peers, he said, touting a potential 100% upside. The outcome: The stock has jumped 50% in the past 12 months. Wang credited efforts made between 2022 and 2023 to improve organizational efficiency and to strategically shift toward higher-end electric equipment. That prepared it well for the demand surge from the AI boom, leading to strong earnings growth in the past year. 'The success story of Hyundai Electric once again proves that opportunities favor those who are prepared,' Wang wrote in an email. The call: The South Korean company was trading at just three times forward earnings because the market failed to price in the value of its core subsidiary, DN Solutions Co., a leading machine tool maker. Hidden value could be unlocked through a planned initial public offering of the unit within a year, said Darren Kang, chief investment officer of Life Asset Management. The outcome: The stock surged 40% in the past year. DN Solutions' $1.1 billion IPO, billed as potentially the largest in Seoul this year, was shelved in late April, after President Donald Trump's tariff policies triggered a market selloff. Still, the aborted share sale 'brought broader attention to the group's under-valuation,' Kang said in an email. 'The upside could have been greater had the listing gone ahead as planned.' The call: Ecuador's sovereign bonds traded at large discounts to peers, said Aaron Stern, managing partner of Converium Capital. The new administration was ushering in economic changes and social reforms that he expected to unlock financing from the International Monetary Fund. The country had a lower debt-to-GDP ratio than peers. It also faced less pressure from credit maturing, thanks to debt restructuring a few years ago. The outcome: The price of the 2035 bond that Stern touted has surged around 24%. When including the semiannual 5.5% coupons, the total return is about 34% in the past year, he said in an email. The call: The provider of human resources and business support services to Japanese companies was trading at a sizable discount to peers, said Zennor Asset Management LLP founding partner David Mitchinson. It had a track record of organic growth, yet its goals weren't ambitious enough and it could benefit from a coherent capital strategy, he said. The outcome: The stock edged up 3.6% in the past year, which left Mitchinson to 'hope for rather better' in time. Government contracts it won during Covid rolled off, while tepid China growth has also been a drag in recent years. But organic growth is finally picking up again, and the company has improved disclosure and its shareholder return policy, he said. Still, it's being run with a lot of cash and more group restructuring is needed, he added. The call: Oasis Management's Seth Fischer highlighted the drugmaker as an activist opportunity in Japan, where its recalled red yeast health supplements led to scores of deaths and hospitalizations. Fischer laid out three options for Kobayashi: bolster board oversight and shareholder returns, go private, or work with Oasis to improve governance. The outcome: The stock slipped another 8.2% since last year's event. Kobayashi's move to fix governance flaws 'is still a work in progress,' said Fischer. A motion in March to appoint an independent chairman was thwarted by the founding family. Having amassed a 10% stake, Oasis filed a lawsuit in April against current and former Kobayashi directors. While it wants an independent probe into the scandal, an encouraging sign is that the management and shareholders are now aligned against the founding family, Fischer said. With legal liability mounting, he's optimistic this will have a successful conclusion. The call: Japan Catalyst Inc. President Taro Hirano saw potential to generate more value in the company, whose businesses ranged from electric-vehicle battery pouches to bottling services for Coca-Cola Co. Japan's corporate management style, with employees often staying for life and chief executives picked in-house, made firms reluctant to divest assets, Hirano said. The outcome: The stock has fallen almost 10%. Dai Nippon's intrinsic value is 'still in the process of being recognized by the market,' Hirano said in an email. Revelations in November that Elliott Investment Management had significantly cut its position less than two years after building a stake contributed to the stock price decline. The call: Palliser Capital founder James Smith urged the mining giant to consider dropping its primary listing in London and unify its corporate structure in Australia. Palliser in December publicly called on the Rio Tinto board to begin an 'independent, comprehensive and transparent' review into the matter, saying the dual listing has led to about $50 billion in value destruction for shareholders since its inception. The outcome: The stock retreated about 21% in London trading and 15% in Australia over the past year. Both still beat the 23% decline of the Bloomberg EMEA 500 Metals and Mining Index. Singapore futures on iron ore, Rio Tinto's cash cow product, have fallen 20% since last year's event as demand from China dropped. Even with the backing of key proxy advisers, Palliser failed to win enough shareholder support to force the review, which Rio Tinto said would cost hundreds of millions of dollars. Still, Palliser is holding out hope that a leadership transition later this year would act as a catalyst for structural reform, parallel to events before the collapse of a dual listing for BHP Group Ltd. in 2022. The call: Tybourne Capital Management CIO Eashwar Krishnan said the stock price could more than double in three years, as the growing adoption of AI drives demand for the company's memory chips. Integrating advanced AI features on devices such as mobile phones would spur demand for DRAM memory, he said. The outcome: Krishnan didn't respond to messages seeking comment. The stock slumped 28% since last year's event, after hitting a high in July. Samsung hasn't secured certification from Nvidia Corp. for the supply of the most advanced AI chips, allowing rivals, especially SK Hynix Inc., to grab a larger share of the market for high-bandwidth memory that AI accelerators depend on. 'Industry-wise, AI is growing, but the benefit went to SK Hynix, instead of Samsung,' Bloomberg Intelligence analyst Masahiro Wakasugi said. More stories like this are available on
Global News
28-05-2025
- Global News
Edmonton senior survives moose attack in own yard: ‘I could be dead'
An Edmonton senior is beaten and bruised, but alive, after being attacked by a moose in his yard. A female moose and her calf have been roaming the river valley in northwest Edmonton near Hye Kyu Sohn's house for the past few weeks — that is, until the mom got a lot closer to him. While working in his backyard last Saturday, the 75-year-old came face to face with momma moose protecting her calf. 'We made eye contact and then she just runs at me,' Sohn said. 'I tried to run behind the tree, but then I lost consciousness.' Tweet This Click to share quote on Twitter: "I tried to run behind the tree, but then I lost consciousness." Sung says he can't believe he survived a moose attack. 'My experience? Horrible hahaha. I am thinking I'm a lucky guy. I'm still standing here talking to you,' Sohn said. Story continues below advertisement Sohn suffered three broken ribs, a bump on the head and two black eyes, along with a large gash in his leg that needed stitches. A female moose and her calf in a backyard in east Edmonton in May 2025. Credit: Jess Strashok Sohn's neighbours, Freddy Bergeron and his wife Renee Brodie, saw Sohn after the attack and called an ambulance. Get daily National news Get the day's top news, political, economic, and current affairs headlines, delivered to your inbox once a day. Sign up for daily National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy 'So I got some first aid, got some bandages and taped him up a little bit for his leg and then my wife called 911,' Bergeron said. Alberta Health Services said on May 24 around 5:30 p.m., EMS responded to a home near Rowland Road and 106A Avenue, and took a patient to hospital in stable condition. Edmonton police said over the past few days, there have been intermittent moose sightings in southeast Edmonton, in and around Fulton Ravine Park and Wayne Gretzky Drive. Story continues below advertisement 'The EPS wants to remind people that if you come across the moose to keep a safe distance away and not to approach it,' police said on Tuesday. Unfortunately, the calf was hit in a collision with a vehicle overnight. Alberta Fish and Wildlife officer Mitch Visser said it happened around midnight Tuesday along Wayne Gretzky Drive. 'The calf did not survive, so it's just a cow now that we're trying to relocate,' Visser said. 'The baby was just so new — like little gangly legs — just going so it was sad, it's sad,' Renee Brodie said. A number of trails in east Edmonton near Wayne Gretzky Drive and Rowland Road are closed as Alberta Fish and Wildlife search for the moose. A trail closed in east Edmonton due to an aggressive mother moose and her calf in the area in May 2025. Alberta Fish and Wildlife Sohn was already back working in his yard Tuesday. Story continues below advertisement 'I was in hospital. I was laughing, 'Jesus, What am I doing?' My kids came to me and they couldn't believe it,' Sohn said.
