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Bailey McCann, Opalesque New York:

Hedge fund manager Daniel Loeb, head of Third Point, and Jeremy Grantham of Grantham, Mayo, Van Otterloo & Co. have both released their quarterly investor letters today. While news is positive on some fronts, and both men see pockets of opportunity, they also have rising concerns about parts of the economic landscape.

Loeb pointed to Japan and sluggish Abenomics as the biggest source of losses for the year. Still, he is cautiously optimistic noting that if the situation turns around "headwinds will become tailwinds." But, he writes, if that turn around doesn't happen soon, the investment opportunity will be lost.

He also noted that maintaining dry powder going into yearend could be beneficial, and that he sees rising opportunity in Argentina, especially if the government makes an agreement with bond holders. The largest bondholder is another hedge fund - Elliot Management.

Grantham led off his first market essay with by noting the strange economic circumstances market participants find themselves in. "Despite a shocking 2.9% setback in first quarter GDP (quarterly decline at annualized rate), the extent of which was forecast by no one, and despite a substantial decline in NIPA corporate earnings, the market has climbed slowly but steadily in recent months. Market volatility has declined to very low levels despite these setbacks and despite Middle Eastern problems. (The negative January Rule this year has, for that matt......................

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