Greenlight Capital says betting against U.S. corporate debt as growth slows (updated)

Tesla Exploration

25/07/2019 18:19

(Adds details on Einhorn's moves in second quarter)
    BOSTON, July 25 (Reuters) - David Einhorn's hedge fund
Greenlight Capital said on Thursday that it is betting that U.S.
corporate debt, both investment grade and high yield, will fall
as the country's economic recovery slows.
    The fund said the move is attractive on its own, coming at a
time that protections for creditors are shrinking, and offers a
hedge to its bets that certain stocks will climb, according to a
letter to investors seen by Reuters.
    "We have taken a new macro position against U.S. corporate
credit, both investment grade and high yield," the letter said. 
    Einhorn took the bet as analysts project corporate earnings
will soften into the second half of the year.
    Recent data shows that private employers are adding fewer
than expected jobs to their payrolls and new orders for
manufactured goods dropped in May https://www.reuters.com/article/us-usa-economy-manufacturing/u-s-factory-orders-fall-for-second-straight-month-idUSKCN1TY1XS
 for a second straight month, signs the economy may be slowing
down.  urn:newsml:reuters.com:*:nL2N24P18Y
    Einhorn's fund has rebounded in 2019 with a gain of 17.4% in
the first half, after sinking 34% in 2018. For months, the fund
manager, whose picks are closely watched in the investment
world, has been overhauling his portfolio.
    In the same letter, Einhorn said the New York-based hedge
fund made new bets on chemical company Chemours  CC.N , retailer
Dillard's Inc.  DDS.N  and gambling products company Scientific
Games Corporation  SGMS.O  in the second quarter.
    News that the fund had invested in those three stocks sent
their share prices higher. He described the Chemours stake as
"medium sized" and called the other two "small positions."
    A bet against Tesla  TSLA.O , and bets on gold, car maker
General Motors  GM.N , aircraft leasing company AerCap  AER.N 
and automotive seat maker Adient  ADNT.N  helped the fund to
appreciate 5.8% in the second quarter.    
    

 (Reporting by Svea Herbst-Bayliss
Editing by Nick Zieminski and Bernadette Baum)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))