Observations & Insight
Trucking Freight and Power: Not as Different as You Think – Paul Cusenza, Nodal Exchange
March 29th marks the launch of Nodal Exchange’s trucking freight futures. In this video, Nodal Exchange CEO Paul Cusenza talks about how trucking freight fits in with the rest of Nodal’s offerings and the potential for the exchange to address the financial transmission rights market.
Watch the video »
****SD: Nodal’s release on the trucking freight product can be found here.
VIX Defies Growth Panic Flashed in Bonds
Yakob Peterseil – Bloomberg (SUBSCRIPTION)
Just how long can the eerie calm in stocks defy the panic buying in bonds?
As a key pocket of the U.S. yield curve inverts and benchmark bunds sit in negative territory, a measure of interest-rate volatility staged its biggest two-day surge since 2016 this week — while the Cboe Volatility Index for the S&P 500 remains effectively unchanged for the month.
****SD: Second to last graf reads: “What happens now is anyone’s guess.” No?! Really?!
Pound Traders Fret Over Deal Versus No Deal Before Another Vote
Charlotte Ryan – Bloomberg (SUBSCRIPTION)
While the pound may have found support from talk of increased backing for Theresa May’s Brexit plan, it remains vulnerable to a fresh flare-up of no-deal risks should the prime minister be defeated again in Parliament.
Even as sterling gained Friday on speculation some members of the opposition Labour Party could back May as she brings her Withdrawal Agreement for a third vote this afternoon, it is still set for a monthly loss of 1.3 percent against the dollar, the worst since October. Odds seem stacked against the premier so far, with her Northern Irish allies in the DUP planning to oppose the plan.
****SD: I wonder what Howie Mandel thinks of Brexit? I will again point readers to our video with FIA Hall of Famer Garry Jones, who somehow managed to eloquently lay out why Brexit is a mess without referencing any of the minute to minute, day to day chaos. If your Brexit appetite still isn’t sated after that, check out the WSJ’s Friday Was Meant to Be Brexit Day, but Britain Is Still Lost in a Maze.
SEC delays disputed plan to probe exchange pricing conflicts
John McCrank – Reuters
The U.S. Securities and Exchange Commission on Thursday delayed a controversial plan aimed at evaluating how stock exchange fees and incentives affect how brokers trade, while the exchanges sue the regulator in an attempt to kill the experiment.
****SD: Just a temporary stay of the pilot – it could still go ahead. The language in NYSE’s filing led me to think that the case would go this way: “Petitioners assert three compelling bases for vacating the Rule, each of which presents a strong likelihood of success.” WSJ on the development here.
Trump and Saudi Arabia at odds over oil prices
John Kemp – Reuters
U.S. President Donald Trump and the Saudi government have closely aligned views on most issues but they disagree significantly on the desirable level for oil prices, which could become a source of volatility in 2019/2020.
U.S. investors seek comfort in flood of data
Sinead Carew – Reuters
Wall Street will be watching next week’s economic data with a laser focus after a dismal February jobs report and recessionary warning signals from U.S. Treasury yields.
Regulation & Enforcement
UK financial services watchdog to ban binary options trading; FCA says move will stop investors losing money from an ‘inherently flawed product’
Cat Rutter Pooley – Financial Times (SUBSCRIPTION)
The UK financial services watchdog will permanently ban trading in complex derivatives by retail customers from Tuesday in a move the regulator said could save consumers up to GBP17m a year and cut the risk of scams.
Operational Risk Management Is Exciting
Paul Lashmet – TABB Forum
With the heightened expectations of regulators and the application of advanced technologies such as artificial intelligence, operational risk management has become a futuristic and exciting space in which to work. Here’s how you can evolve from a reactive program of monitoring events and establishing codes of conduct to a proactive one of prediction and prevention.
****SD: This title did make me chuckle.
Seven tips for acing the Series 7 and other financial exams
Beecher Tuttle and Dan Butcher – eFinancialCareers
…In the Series 7, a lot of candidates are guilty of spending way too much time on the options and corporate bonds sectors. “These two topics account for about 20% of the exam,” says Marks. “The old story about the Series 7 was that options and municipal bonds used to make up close to 50% of the test – that was your parent’s Series 7, but that’s not the case anymore. There’s more variety and more emphasis on clients and constructing portfolios for them. There’s a trend towards testing practical knowledge to ensure that people are well equipped to meet clients’ investment needs.”
Goldman Sachs is exploring plans to create a Netflix for data, and it marks a new frontier for Wall Street
Dakin Campbell – Business Insider Prime (SUBSCRIPTION)
At some point in the not-too-distant future, investors may find themselves ponying up monthly subscription fees to Wall Street banks in much the same way they subscribe to Netflix or Spotify.
At least, that’s the hope of bankers searching the depths of their institutions for data sources that investors may buy.
And now a job ad from Goldman Sachs provides probably the clearest picture yet for what the business model might look like.
The ‘volatility cavalry’ is coming for the stock market, other assets, according to this chart
William Watts – MarketWatch
What can’t the yield curve predict?
Not only has an inversion of the Treasury yield curve — a line plotting yields across all Treasury maturities that under usual circumstances slopes upward — sparked recession fears, it ends up that a prolonged shift to a flatter profile also portends a renewal of price volatility for stocks and other assets, according to Alan Ruskin, global macro strategist at Deutsche Bank.
Hailing a ride on the LYFT IPO? View this first.
What do you get when you add 1 part $Lyft, 3 parts Uber, a dash of Pinterest, and pinch of Slack? The return of a potential IPO frenzy, where everyday investors can get involved with some of the most well-known companies of the modern app age. That’s what’s coming for investors throughout 2019, with billions of dollars in so called Unicorns hitting the public markets while they make billionaires and 100s of millionaires out of founders, venture capital firms, and early investors. First up is the Lyft IPO, which is expected to do hit the markets on Friday and raise a cool $2 billion as it gets valued north of $20 Billion.
****SD: As of this writing Lyft is up 13 percent.
Whaley named winner of SEC Faculty Achievement Award
Robert Whaley, Valere Blair Potter Professor of Finance at the Owen Graduate School of Management, is Vanderbilt’s winner of the 2019 Southeastern Conference Faculty Achievement Award.
****SD: I jump on any chance to remind readers of this fact: Whaley built an Irish pub in his basement and it has its own website.
It’s Been a Stellar Quarter, But Worries Weigh: Taking Stock
Eric Lam – Bloomberg (SUBSCRIPTION)
Asia markets barely have any time to bask in the glow of the best start to a year since 2017, with investors already pondering where stocks will go from here amid brewing global growth concerns.
Pot Stock Volatility Is Something This Company Wants No Part Of
Sam Unsted – Bloomberg (SUBSCRIPTION)
The frenzy in Canadian pot stocks has created plenty of opportunities for short-term traders. That kind of volatility holds no attraction for one European medical cannabis company.
Palladium `Bubble Has Burst’ in Metal’s Biggest Drop Since 2010
David Caleb Mutua and Rupert Rowling – Bloomberg (SUBSCRIPTION)
Palladium fell for a third day, heading for the biggest drop in almost nine years and fueling concern that the metal’s multi-month rally has run out of steam.