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Wirecard insolvency drives stock lower

The embattled fintech firm filed for insolvency yesterday, driving its share price down 71.28% by close to trade at €3.53. The stock was trading as high as €140 in April, but crashed following allegations that the company may have misreported as much as €1.9bn and the arrest of its former CEO.

“Terminator rally” could produce decades-high quarter

Likened to Arnold Schwarzenegger’s deadly cyborg for its seemingly unstoppable nature, the current rally could lead to new market records for the second quarter, according to the Financial Times. The quarterly performance of the S&P 500, up 23% since the start of April, puts it on course for its best quarter in more than 20 years.

Earnings report: Tesco

The UK supermarket giant is due to report in a few hours, and investors will be keen to see what effect the coronavirus pandemic has had on Tesco’s figures. The stock soared during the initial stages of lockdown as panicked customers bought in bulk, but ahead of the announcement yesterday, the stock closed down by 0.40%.

Smoke and mirrors

The success of the energy and tech sectors has helped the S&P 500 rise 23% and the Dow Jones Industrial Average by 21%, for the quarter to date (through 24 June). However, these outsized successes are masking volatility and underperformance elsewhere. Utilities and real estate, both affected heavily by the pandemic, are up just 1.9% and 9.6%, respectively.

What’s driving Dalio?

Famed investor Ray Dalio should have been shaken by the $25bn loss suffered during March and April by his firm, the world’s largest hedge fund, Bridgewater Associates. However, not to be daunted, Dalio appears to be staying the course.

The common good

Debt issued for projects with positive social aims is at record levels, rising from $18bn for the whole year of 2019 to $39.7bn in the first six months of 2020. Haruna Usui of AllianceBernstein Japan, suggests the pandemic can be seen as a “litmus test” for how firms have supported staff. Bloomberg reports that asset managers will increasingly base decisions on how considerate companies were to employees and clients during this pandemic.

Quants question alternative data

Spending on so-called alternative data has increased from $1.1bn in 2019 to a forecasted $1.7bn in 2020, according to Bloomberg. However, quants warn of diminishing returns and potentially misleading conclusions. Qaisar Hasan, portfolio manager at Lombard Odier Investment Managers, told the publication of “evident biases” in 90-95% of around 800 data sets analysed in the past decade.

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