More vindication for Third Point’s Dan Loeb. Yahoo Monday reported it earned $0.35 per share in the third quarter, compared with a consensus estimate of $0.25. Revenues came in slightly above estimates at the internet giant, as Marissa Mayer establishes her reputation three months into the job as the fifth CEO in four years. As a result, the stock surged about 3 percent in after-hours trading, which suggests a nice open Tuesday morning. Earlier this year, Loeb ended his threatened proxy battle against Yahoo when the internet company agreed to add three of Third Point's proposed nominees to the board, including Loeb himself.

Meanwhile, shares of Apple reversed their recent slide, closing up nearly 4 percent on Monday at $634.03. It was Apple’s best day in five months. One of the most popular stocks among hedge funds, it had hit a peak of more than $705.

Hedge funds continue to back off on the bullish bets on commodities. The latest weekly Commodity Futures Trading Commission data show that speculators cut their net-long positions in 18 U.S. futures and options last week to their lowest level since July 24. Gold showed their first decline since August 14 while silver slipped for the first time in 12 weeks.

Hedge funds believe the biggest risk is currently the fiscal cliff and elections. The twin events were lumped together and cited by more than 60 percent of the 55 large hedge funds who participated in a survey conducted by Macro Risk Advisors. The China debt crisis/housing bubble was the second most cited macro risk in the survey, cited by more than 40 percent, followed by Inflation/Deflation, which encompasses inflation expectations, fiat currencies, gold and central bank policy.

Farallon Capital’s Tom Steyer is the latest hedge fund luminary to announce his retirement. The San Francisco-based manager had been telegraphing this move ever since he brought back longtime colleague and co-chief investment officer, Andrew Spokes, to move back to the firm’s headquarters from London in 2007. Spokes will now run the $20 billion firm.