Cash, Money Market Funds etc.

Re: Cash & Money Market Funds

Postby winston » Wed Sep 14, 2016 8:09 pm

There’s a $300 Billion Exodus From Money Markets Ahead

by Liz McCormick

Final wave of cash set to move from prime, muni funds
Shift seen before Oct. 14 compliance date for floating NAVs

Their assets have already plunged by almost $700 billion since the start of 2015, to $789 billion, Investment Company Institute data show.

The outflow has rippled across financial markets, shattering demand for banks’ and other companies’ short-term debt and raising their funding costs.


While Yi sees the additional outflow from prime-fund investors potentially reaching $200 billion in the next 30 days, TD Securities predicted in a Sept. 7 note that it may tally as much as $300 billion.


Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... -era-dawns
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Re: Cash & Money Market Funds

Postby winston » Wed Sep 21, 2016 6:05 pm

US firms hoard $2.5 trillion overseas: Research

by Matt Clinch

The amount of cash held overseas by U.S. firms has risen to $2.5 trillion, according to new research by independent advisory firm Capital Economics, which suggests it's very unlikely to be ever repatriated.


Apple now has $91.5 billion of earnings permanently reinvested overseas. General Electric (GE) and Microsoft (MSFT) have more than $100 billion each


"The U.S. requires firms to pay the full 35 percent corporate tax rate – the highest in the developed world – on all worldwide income, but only if those funds are repatriated. This gives firms a clear incentive to keep earnings overseas"


Source: CNBC

http://finance.yahoo.com/news/us-firms- ... 28517.html
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Re: Cash & Money Market Funds

Postby winston » Fri Sep 23, 2016 7:48 am

U.S. money market rules already affecting markets, sparking debate

Mutual funds face an Oct. 14 deadline to comply with Securities and Exchange Commission rules inspired by the 2007-09 financial crisis, when the net asset value of a large money market fund fell below $1 per share and spooked large investors into rapidly pulling money from the funds.


The rules require institutional prime money market funds, which primarily invest in corporate debt, to have floating net asset values, but allow other funds, such as those invested in government securities, to have a stable $1 per share value.


New data from a federal monitor for financial risk showed that money is racing out of prime funds into government ones, and the pace has picked up as the deadline nears.


Assets of prime funds have decreased more than $700 billion since the start of the year, and those of government funds have increased by the same amount


Source: Reuters

http://www.reuters.com/article/us-usa-r ... r%20Update
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Re: Cash & Money Market Funds

Postby winston » Sat Sep 24, 2016 9:34 am

The Unintended Consequences of These New Rules Could Kill the Rally – Or Worse

By Shah Gilani

Starting October 14, 2016, institutional prime money market funds won’t be able to price themselves at a constant $1.00 a share.

New SEC rules will require these giant funds to value shares based on actual market prices for underlying assets in their portfolios.

That means their per-share prices will fluctuate on a daily basis.

While that’s not exactly good news, it gets worse.

The rules allow funds to charge up to a 2% redemption fee when investors want out.

But the killer is, funds can put up “gates” that prevent investors from selling shares.

Besides problems investors will have with the new rules, unintended consequences affecting companies and municipalities that rely on selling their commercial paper and other short-term debt instruments to these big funds could end up killing the market.


Retail and government money market funds are exempt and can still price their shares at a constant $1.00 per share.


Source: Wall Steet Insight

http://wallstreetinsightsandindictments ... -or-worse/
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Re: Cash & Money Market Funds

Postby winston » Wed Oct 05, 2016 6:38 pm

How to Profit When Negative Rates Push Cash to Extinction

By PETER KRAUTH

Aside from Japan, negative interest rates are already in effect in the Eurozone, Switzerland, Sweden, and Denmark.


Source: Money Morning

http://moneymorning.com/2016/10/05/how- ... xtinction/
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Re: Cash & Money Market Funds

Postby winston » Thu Oct 13, 2016 6:29 pm

Cramer reveals the No.1 reason he outperformed the market as a money manager

by Abigail Stevenson

Jim Cramer uncovered the importance that cash plays in a portfolio, and why he considers it the most underrated investment on Wall Street.

The biggest mistake Jim Cramer sees investors make is that many think they are supposed to be fully invested at all times.

Heck, even some money managers have told him that they are supposed to have all their money in stocks.

This is complete nonsense!

Having cash on hand when a market correction occurs is the key to protecting a portfolio. Sometimes the market will stink, and there is nothing to do but just sit in cash.

"In fact, one of the chief reasons that I outperformed pretty much every manager in the business during my 14-year run as a professional money manager is that there were substantial blocks of time when I was largely in cash," the " Mad Money " host said.

Cash is the perfect hedge in an environment when the market hits dangerous highs and could protect from devastating losses.

Cramer considers cash the most underrated investment of all. Whenever he sees the market spike, he starts to sell a little and trim here and there to build up a supply of cash. He sells on strength and buys on weakness.

Otherwise, Cramer fears that investors could wind up selling their best stocks just to hang onto their worst stocks because the higher-quality stocks stopped going up — a big mistake.

However, investors must be aware that there are many circumstances that will cause the stock market to plummet. That means they need to be ready for a correction.

Having a pile of cash in your back pocket could mean the difference between good and bad stocks in your portfolio. And keeping a solid portfolio that will ensure that it will be able to bounce back from a correction. That means having cash to subsidize, instead of selling high-quality stocks, so you can outperform the best money managers out there, too.

Source: CNBC
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Re: Cash & Money Market Funds

Postby winston » Tue Oct 18, 2016 11:11 pm

Investor Cash Levels Jump Toward Levels Not Seen Since 9/11

by Sid Verma and Luke Kawa

Fears of a bond-market crash, a breakdown in globalization, a new crisis in the euro area?

There were a bevy of reasons for fund managers to push their cash balances to 5.8 percent of their portfolios in October, up from 5.5 percent last month, matching levels not seen since the aftermath of the Brexit vote.

The share of cash hasn't been higher than that since November 2001, shortly after the terrorist attacks in the U.S.

The amount of dry powder in portfolios is above that seen during both Europe's sovereign-debt crisis and the U.S. debt-ceiling debacle, according to Bank of America Merrill Lynch's monthly survey of money managers.

“This month’s cash levels indicate that investors are bearish, with fears of an EU breakup, a bond crash and Republicans winning the White House jangling nerves,” said Michael Hartnett, the bank's chief investment strategist.

There are no shortage of risks on the investor horizon, according to market participants surveyed, with 18 percent fearful of a disorderly adjustment in the bond market.

The monthly survey solicits the views of investors with more than half a trillion dollars in cumulative assets under management.

Over the past year and a half, Hartnett has advised investors to hold more cash in their portfolios or be outright long paper money on multiple occasions.

In mid-September, a Goldman Sachs Group Inc. team led by Managing Director Christian Mueller-Glissman downgraded bonds on a three-month basis while also retaining an overweight position on cash.

Elevated cash balances potentially sets the stage for a stock-market rally, according to the Bank of America analysts.

"When average cash balance rises above 4.5 percent a contrarian buy signal is generated for equities. When the cash balance falls below 3.5 percent a contrarian sell signal is generated," writes Hartnett's team in Tuesday's report.

In the three months following 9/11 and the Brexit referendum, the S&P 500 rose by 4.1 and 2.4 percent, respectively.

Merrill Lynch suggests greater clarity on U.S. and euro-area political developments, signs of corporate-earnings momentum and confidence that bond-market repricing will happen in an orderly manner would buoy global stock markets.

The survey also highlights that inflation expectations are at a 16-month high, while stagflation fears have reached their highest level since April 2013, with the latter perhaps, in part, driven by events in the U.K.

Source: Bloomberg

http://finance.yahoo.com/news/investor- ... 44299.html
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Re: Cash & Money Market Funds

Postby winston » Fri Oct 28, 2016 1:18 pm

Getting to know the right "going to cash" philosophy

by Joe D'Allegro

Source: CNBC.com

http://www.cnbc.com/2016/10/27/5-facts- ... yptr=yahoo
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Re: Cash & Money Market Funds

Postby winston » Sat Nov 05, 2016 6:24 am

5 tech giants have a half-trillion overseas stash — and it's growing

The five companies holding the largest cash reserves overseas are all in the technology sector, and four are based in Silicon Valley: Apple, Alphabet, Cisco and Oracle. Washington-based Microsoft rounds out the list.


Source: Silicon Valley Business Journals

http://www.bizjournals.com/sanjose/news ... yptr=yahoo
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Re: Cash & Money Market Funds

Postby winston » Sat Nov 05, 2016 9:10 pm

US Corporate Cash Balances Set to Rise 5% to $1.77 Trillion by End of 2016

By Jon C. Ogg

Source: 247 Wall Street

http://247wallst.com/technology-3/2016/ ... Newsletter
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