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Franklin Templeton fund manager loses $1.8 billion in one day on Argentina bets: Financial Times

Key Points
  • A star fund manager at Franklin Templeton loses nearly $1.8 billion in Monday's market slide in Argentina, according to the Financial Times.
  • Financial markets in Argentina are in turmoil after a surprise result in primary elections over the weekend.
A view of Exchange house in Buenos Aires, Argentina. Argentina Peso weakened substantially after Primary Presidential Elections.
Federico Rotter | NurPhoto | Getty Images

A star fund manager at Franklin Templeton lost $1.8 billion on Monday due to the market slide in Argentina, according to the Financial Times.

Michael Hasenstab, a fixed-income fund manager, had several large positions in the Argentina bond market. The financial markets in the country plunged after a surprise result in primary elections. President Mauricio Macri, the center-right incumbent, lost by a larger-than-expected margin, raising concerns about populist leaders gaining control of the country.

Argentina's stock market lost more than 30% on Monday, and the Argentine peso also fell significantly.

Several funds run by Hasenstab had large positions in Argentine bonds, creating a cumulative loss of nearly $1.8 billion for the day, according to Financial Times calculations.

Franklin Templeton reported that it had roughly $715 billion in assets under management as of June 30. The company declined to comment.

Read the full story here.

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Key Points
  • The bond market is flashing its biggest recession signal yet, now that the widely watched spread between the yield on the 2-year Treasury note and 10-year note yield has inverted.
  • This so-called inverted yield curve is a reliable indicator for a recession, measured as two quarters of negative growth.
  • But the U.S. curve move is not isolated — bond markets globally are reeling, with the U.S. 30-year bond yield falling to a record 2.015%; the U.K. curve inverted and German bund yields going deeper into record negative territory.