Hits & Takes
By JLN Staff
The FIA has published a primer on Brexit for their members titled “Brexit and its Impact on the Cleared Derivatives Markets: A Primer.”
Primer is an interesting word. Here are the first three definitions for the noun primer from Merriam-Webster:
1: a small book for teaching children to read
2: a small introductory book on a subject
3: a short informative piece of writing
I am going with number 3. There is also a second definition for the noun primer; a device for priming especially : a cap, tube, or wafer containing percussion powder or compound used to ignite an explosive charge.
I think I am going with the latter meaning for Brexit, igniting an explosive charge.
The Financial Times has a Special Report titled “FT 300: Top Registered Investment Advisers.” The report include the following stories with these headlines:
- How the pandemic has reshaped adviser-client meetings
- US financial advisers struggle to overcome their lack of racial diversity
- Advisers test new fee models to widen their customer base
- Firms balance reputational risk against government loan boost
- Financial advisers discard playbook of 2008 crisis
The Wall Street Journal has a story about how my alma mater, Purdue University, has closed its MBA program due to the COVID-19 outbreak.
Wearing masks does not cause COVID-19, despite what some U.S. Congressman has stated.
It is very hot in the Middle-East and it was a record 125 degrees Fahrenheit yesterday in Baghdad.
Several years back the Cboe, then the CBOE, had a university professor give a presentation on periodic auctions to a group of press at the FIA Boca Raton, FL conference. At the time I equated it with the market structure of the LME, which was viewed as a lagard for electronic trading. And now the Cboe is going to give it a try in the US. It has used periodic auctions in Europe since 2015.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Singapore Exchange Limited (SGX) reported a net profit of S$472 million in FY2020, with revenue of S$1.05 billion, up 16% from a year earlier. In a press briefing held virtually in place of its usual press lunch at FIA Boca each year, Singapore Exchange Limited (SGX) CEO Loh Boon Chye said the exchange had always planned for a “pandemic scenario” but of course had not imagined the enormity of the COVID situation, which has “upended the world.” Extreme market moves accelerated certain trends, he said, including:
- The exchange was looking for low interest rates to stay for a while and now it looks like COVID will make rates lower for quite some time.
- Cost optimization has become even more important.
- The low interest rates will accelerate passive investing. People are looking to avoid paying too much in fees.
- There will be a return to macro trading (a major strategy back in the 1990s), particularly in Asia.
- SGX will continue to expand into fixed income, currencies and commodities, following the completion of its acquisition of BidFX in June.
We hope to have an expanded report on the briefing soon.~SR
U.S. economy shrank at record-breaking 33% rate last quarter
The U.S. economy shrank at a dizzying 33% annual rate in the April-June quarter — by far the worst quarterly plunge ever — when the viral outbreak shut down businesses, throwing tens of millions out of work and sending unemployment surging to 14.7%, the government said Thursday. The Commerce Department’s estimate of the second-quarter decline in the gross domestic product, the total output of goods and services, marked the sharpest such drop on records dating to 1947. The previous worst quarterly contraction, a 10% drop, occurred in 1958 during the Eisenhower administration.
*****Forget the V recovery, how about stopping the outbreak and the recovery will follow.~JJL
Emirates will pay medical and funeral costs if travelers get COVID-19
David Slotnick – Business Insider
Emirates has a new strategy for boosting passenger demand in the midst of a global pandemic: coronavirus insurance. If one of its passengers is diagnosed with COVID-19 during their journey, the Dubai-based airline will cover their medical expenses, up to EUR150,000 (about $176,000). It will pay EUR100 ($118) per day for quarantine costs — such as a hotel room — for up to two weeks. And if the worst happens, Emirates will offer EUR1,500 (about $1,765) for a passenger’s funeral.
*****You also get to keep the earphones.~JJL
Wednesday’s Top Three
Our top story Wednesday was the Wall Street Journal’s Cboe Proposes Plan That Could Curb Advantages of Fast Traders. The exchange is proposing to launch periodic auctions lasting one-tenth of a second. Next up was CNN’s Goldman Sachs’ CEO DJ’d a party in the Hamptons that is now under investigation for “egregious social distancing violations.” Third was The New York Times’ terribly important story, How Does the Coronavirus Affect Sports Betting?
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As US passes 150,000 coronavirus deaths, experts at Johns Hopkins call for reset in national response
Steve Almasy, Jason Hanna and Madeline Holcombe – CNN
The United States on Wednesday surpassed 150,000 recorded Covid-19 deaths — a milestone that comes as the country’s number of daily coronavirus deaths is the highest it’s been since the spring. The first death in the US was reported on February 29. The country reached 50,000 deaths 54 days later on April 23, and 34 days later, on May 27, crossed 100,000 deaths. It has taken 63 days to add another 50,000 to reach the 150,000 mark.
FCA raps brokers over ‘inappropriate’ use of clients’ assets; UK market regulator makes latest in series of complaints over brokerage industry
Philip Stafford – FT
The UK market regulator is cracking down on brokers, saying it has seen evidence that some are making “inappropriate” use of clients’ assets through legal loopholes. In a so-called “Dear CEO” letter — a rare form of correspondence that signals concerns over industry-wide practices — the Financial Conduct Authority gave 357 wholesale brokerages just three weeks to attest they were abiding by the rules
Euronext rejects calls to shorten trading day across its exchanges; Group’s CEO notes lack of consensus among users on curbing hours
Philip Stafford – FT
Euronext has ruled out changes to opening hours across its six stock exchanges in Europe, in a blow to market participants who had complained that current schedules are inefficient and antisocial.
Index Giant S&P Faces Potential SEC Lawsuit Over Volatility Gauges; SEC says S&P failed to provide sufficient disclosures on certain volatility-linked indexes in 2018
Alexander Osipovich – WSJ
The Securities and Exchange Commission plans to bring an enforcement action against S&P Dow Jones Indices, one of the world’s biggest index providers for exchange-traded funds, for failing to provide sufficient disclosures on certain volatility-linked indexes in 2018.
U.S. Economy Shrinks at Record 32.9% Pace in Second Quarter
Reade Pickert – Bloomberg
Personal spending slumped by the most in records to 1940s; Separate report showed second straight gain in jobless claims
The U.S. economy suffered its sharpest downturn since at least the 1940s in the second quarter, highlighting how the pandemic has ravaged businesses across the country and left millions of Americans out of work.
Buy-side advance efforts in Libor transition; New data from the Investment Association reveals that 70% of asset managers reduced exposure to Libor in 2019.
Hayley McDowell – The Trade
Asset managers have upped efforts in the switch from the Libor benchmark before it is withdrawn at the end of 2021, according to new data from the Investment Association.
What the History of Very Low Interest Rates Can Tell Investors; The plunge in real interest rates is bad news for stocks, if historical relationships between the two hold
Mike Bird – WSJ
Real interest rates are back on investors’ minds with the collapse in yields on inflation-protected securities helping raise gold prices to records in recent days. But the impact of deeply negative real interest rates—usually defined as returns to safe government debt after anticipated inflation—doesn’t stop with precious metals.
Tweets and Articles Sent Kodak Shares Surging Before Official Announcement; Kodak sent a news advisory to media outlets without indicating the information wasn’t intended to be released publicly
Geoffrey Rogow, Alexander Osipovich and Rachael Levy – WSJ
A day before Eastman Kodak Co. KODK 318.14% received a $765 million loan from the U.S. government, shares of the onetime photography giant were already on the move. On Tuesday morning, The Wall Street Journal reported that Kodak KODK 318.14% would receive a U.S. loan to produce drug ingredients. The news, officially announced by the company and Trump administration on Tuesday afternoon, more than tripled the value of the company’s stock.
We all need to reassess what we understand by the word ‘risk’; The Covid-19 crisis has accelerated structural changes in the way financial markets work
Fiona Frick – FT
The global financial crisis of 2008, followed by the Covid-19 pandemic, has made fundamental changes to the way financial markets work. Interventions by central banks, designed to save economies from major dislocations, have shaken some of the basic concepts investors have been applying for decades. As a result, we need to revisit these ideas with fresh eyes and update them for a new era.
Hackers Are Targeting the Remote Workers Who Keep Your Lights On
Chris Martin – Bloomberg
Cyberattacks on electric grid have surged 35% during pandemic; Power companies say they’re boosting security against assault
In July alone, hackers took over the twitter accounts of U.S. politicians, stole terrabytes of coronavirus research and even infiltrated the U.K.’s Premier League soccer clubs. Can they cut off your electricity, too? They’re trying. With millions of Americans now working from home – – including the people who help keep the grid running — cyberattacks targeting the power sector have surged. In many cases, hackers use phishing emails to gain access to the computers of remote workers, looking to disable company systems for a ransom. But security experts warn that about dozen state-sponsored actors are also trying to infiltrate these networks.
Inside Goldman’s Five-Day Race to Seal a 1MDB Deal With Malaysia
Yantoultra Ngui, Elffie Chew, Hadi Azmi, and Cathy Chan – Bloomberg
Bank reaches $3.9 billion accord to settle Malaysia dispute; Goldman’s offer to guarantee $1.4 billion in assets closed gap
As negotiators from Goldman Sachs Group Inc. and the Malaysian government gathered at the Mandarin Oriental hotel in Kuala Lumpur last week, the two sides could hardly have been further apart on a 1MDB deal.
India’s IT giants are shedding thousands of jobs as they enter “survival mode”
Ananya Bhattacharya – Quartz
Indian IT bigwigs have shed people in thousands in the last three months. The staff headcount at the largest player in the sector, Tata Consultancy Services (TCS), fell by over 4,700 between March and June, when coronavirus started gripping the country. Rivals Infosys, Wipro, and Tech Mahindra, too, posted a decline in net employee headcount.
At Deutsche Bank and Barclays, European Banking Goes National; Country risk is increasingly important as European countries craft different responses to the coronavirus crisis
Rochelle Toplensky – WSJ
The main European banking story in recent years has been how to restructure businesses to drive returns. That still matters, but so too does something new: government responses to the coronavirus crisis.
Yes, the Coronavirus Is in the Air; Transmission through aerosols matters — and probably a lot more than we’ve been able to prove yet.
Linsey C. Marr – NY Times
Finally. The World Health Organization has now formally recognized that SARS-CoV-2, the virus that causes Covid-19, is airborne and that it can be carried by tiny aerosols.
Choc waves: how coronavirus shook the cocoa market; Commodity slumps amid the biggest quarterly decline in processing in six years
Emiko Terazono and Neil Munshi – FT
The Covid-19 crisis has taken a big bite out of the chocolate market, causing a collapse in demand that has sent cocoa prices sharply lower and created “disastrous” conditions for farmers.
A farming revolution is what we need in this crisis; The Covid-19 pandemic has brought a reckoning for how we feed ourselves and where we get our food
Donna Kilpatrick – FT
The writer is the head farmer at Heifer Ranch, a US agricultural training facility When I daydream about what the ranch I lead in Arkansas will look like in 10 years, I picture black soil, rich like chocolate cake, full of earthworms and fungi. The sound of song birds and quail is ever-present and livestock graze in pastures full of diverse forage. The streams all run clear. This to me is farming as it should be.
More Hong Kong restaurants shut down, shift to delivery as coronavirus dining ban poses existential threat; As many eateries struggle to survive, some are electing to make massive savings on rent by vacating their expensive premises in prime shopping areas
Pearl Liu – South China Morning Post
Restaurants in some of Hong Kong’s main commercial districts are closing down as their owners opt to open kitchens in more affordable industrial areas offering only delivery services, according to property agents. The growing trend – a result of the hardship caused by the coronavirus pandemic – is a further blow to the city’s prime retail property market, and is set to accelerate as the latest social distancing measures include a ban on restaurant dining.
U.K. Extends Self-Isolation Period to 10 Days to Quell Covid
Alex Morales and Libby Cherry – Bloomberg
There’s a ‘real’ possibility people are infectious for 9 days; Hancock hints at expanding quarantine list for travelers
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis.The U.K. lengthened the self-isolation period for coronavirus patients to 10 days from seven as health authorities seek to prevent a renewed surge in cases of the disease.
J&J Vaccine Protects Monkeys From Covid With Single Shot
Marthe Fourcade and Riley Griffin – Bloomberg
Johnson & Johnson’s experimental coronavirus vaccine protected a group of macaques with a single shot in an early study, prompting the U.S. drugmaker to start trials in humans this month.
Schools closures in spring were linked to reductions in Covid-19 cases and deaths, study says
Jacqueline Howard – CNN
School closures that swept several US states from March to May might have led to a million fewer Covid-19 cases and saved more than 40,000 lives, a new study suggests.
Daily Coronavirus Cases in India Top 50,000 for First Time
India on Thursday reported more than 50,000 daily coronavirus cases for the first time, driven by a surge in infections in rural areas at a time when the government is further easing curbs on movement and commerce.
Bill Gates says most coronavirus tests are a ‘complete waste’ because the results come back too slow
Allen Kim, CNN
Bill Gates slammed coronavirus testing in the US in an interview with CNBC, saying that most tests are a “complete waste” because it takes too long for the results to come back.
Germany’s New Coronavirus Cases Rise the Most in About Six Weeks
Andrew Blackman – Bloomberg
Germany recorded the highest number of new coronavirus cases in about six weeks and the infection rate stayed above the key threshold of 1.0. There were 839 new infections in the 24 hours through Thursday morning, up from 595 the previous day, according to data from Johns Hopkins University. That compares with almost 7,000 at the peak of the pandemic and brought the total to 208,546. There were four fatalities, taking the overall number of deaths to 9,135.
Brazil’s COVID-19 death toll surpasses 90,000
Rio de Janeiro (AFP) – Brazil registered record daily numbers of infections and deaths from the new coronavirus Wednesday, sending its overall death toll surging past 90,000 people.
Exchanges, OTC and Clearing
Cboe to launch periodic auction in US after European success; After emerging as an alternative trading venue under MiFID II in Europe, Cboe will now bring its periodic auction to the US equity market.
Hayley McDowell – The Trade
Exchange operator Cboe Global Markets has confirmed it will launch a periodic auction system in the US, after being the first to launch the alternative trading venue in Europe.
Euronext publishes Q2 2020 results; SOLID SECOND QUARTER 2020 DRIVEN BY INCREASED TRADING VOLUMES IN ALL ASSET CLASSES AND CONTINUED BENEFITS FROM DIVERSIFICATION
Euronext, the leading pan-European market infrastructure, today announced its results for the second quarter of 2020.
Half-yearly financial report 2020
Deutsche Börse Group
Below you will find the semi-annual financial report 2020 of Deutsche Börse Group for download.
Intercontinental Exchange Reports Strong Second Quarter 2020
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listing services, today reported financial results for the second quarter of 2020. For the quarter ended June 30, 2020, consolidated net income attributable to ICE was $523 million on $1.4 billion of consolidated revenues, less transaction-based expenses. Second quarter GAAP diluted earnings per share (EPS) were $0.95. Adjusted net income attributable to ICE was $584 million in the second quarter and adjusted diluted EPS were $1.07. Please refer to the reconciliation of non-GAAP financial measures included in this press release for more information on our adjusted operating expenses, adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted EPS and free cash flow.
Intercontinental Exchange Approves Third Quarter Dividend of $0.30 per Share
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today a $0.30 per share dividend for the third quarter of 2020, which is up 9% from the $0.275 per share dividend paid in the third quarter of 2019. The cash dividend is payable on September 30, 2020 to stockholders of record as of September 16, 2020. The ex-dividend date is September 15, 2020.
CME Group Inc. Reports Second-Quarter 2020 Financial Results
CME Group Inc. (NASDAQ: CME) today reported financial results for the second quarter of 2020. The company reported revenue of $1.2 billion and operating income of $638 million for the second quarter of 2020. Net income was $503 million and diluted earnings per share were $1.40. On an adjusted basis, net income was $583 million and diluted earnings per share were $1.63. Financial results presented on an adjusted basis for the second quarter of 2020 and 2019 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
SGX reports FY2020 net profit of S$472 million
Singapore Exchange (SGX) today reported FY2020 net profit of S$472.0 million (S$391.1 million), with revenues of S$1,052.7 million (S$909.8 million). EBITDA stood at S$655.7 million (S$523.5 million), while earnings per share was 44.1 cents (36.5 cents).
SGX welcomes Singapore Paincare Holdings Limited to Catalist
Singapore Exchange (SGX) today welcomed Singapore Paincare Holdings Limited to its Catalist under the stock code “FRQ”. Singapore Paincare Holdings is a medical services group at the forefront of providing accessible pain care treatment in Singapore. It focuses on the treatment of patients suffering from chronic pain, including alternative non-surgical treatment solutions.
TSX Venture Exchange Stock Maintenance Bulletins
Effective at the opening, August 5, 2020 , the Share Purchase Rights of the Company will trade for cash. The Rights expire and will, therefore, be delisted at the close of business August 7, 2020 .
BME Posts A Net Profit Of 59 Million Euros In The First Half Of The Year
The net result obtained by BME in the first half of 2020 totalled EUR59 million, down 7% on than that obtained in the same period of the previous year. In the second quarter it reached EUR25 million with a decrease of 21.6% compared to a year ago.
Top 10 Global Fintech Hubs | San Francisco Bay
Evelyn Howat – Fintech Magazine
The San Francisco Bay area – a mecca for innovators, startups, hipsters (okay, we’re guessing) and now fintechs, according to Findexable. Indeed, the metropolitan region is home to globally recognised unicorns such as Stripe, Coinbase, Credit Karma and more, as well as a host of up and coming fintechs like Robinhood.
Refinitiv acquires Advisor Software Inc., further expanding its digital capabilities for the Wealth Management industry;Acquisition of Advisor Software Inc. further enhances Refinitiv’s digital assets with digital portfolio analysis and advisory capabilities.
Refinitiv today announced the acquisition of strategic assets from Advisor Software Inc. (ASI), adding key digital functionalities to Refinitiv’s Wealth Management offering including enhanced digital advice capabilities and digital portfolio analysis. ASI’s technology is interoperable and cloud enabled and will be integrated into the recently launched Refinitiv Digital Investor.
Sucden Financial launches FX matching engine for clients in Asia; The TY3 matching engine was developed in partnership with FlexTrade to provide reduced cross-region latency for clients.
Hayley McDowell – The Trade
FX broker and liquidity provider Sucden Financial has launched a new matching engine for its clients in Asia Pacific in partnership with FlexTrade.
Clients hope to maintain new communication methods post-pandemic, finds survey; Advisors may also want to consider leveraging social media
If you changed your client communication methods in response to Covid-19, your clients may want to make that change permanent. Of investors who used new communication methods with their advisors since the pandemic, 62% said they expected to fully or partially maintain those new methods after the pandemic ends, says a client survey from New York – based Broadridge Financial Solutions, Inc., a global fintech firm.
RegTech Market Industry Size, Business Growth, Opportunities and Challanges and Forecasts (2020-2026) | COVID-19 Impact Analysis Included
Avatar Milind -Galusaustralis.com
Facts & Factors, leading market research and the consulting firm added the latest industry outlook report on “RegTech Market by Application (Compliance Management, Regulatory Intelligence, Risk Management, Identity Management, Fraud Management, and Regulatory Reporting), by Organization Size (Large enterprise and SME’s),- Global Industry Perspective, Comprehensive Analysis and Forecast, 2020-2026” consisting of 190+ pages during the forecast period 2020 to 2026 and the RegTech Market report offers comprehensive research updates and information related to market growth, demand, and opportunities in the RegTech Market.
How Payments Fintech Is Using Banking As A Service To Drive Growth
Daniel Webber – Forbes
An international payment is a commodity product. This has pushed money transfer companies globally into a race to differentiate themselves by offering more products and more features to customers. The latest product push has made these payments companies look more and more like banks as they offer banking type services ranging from checking type accounts to investments and savings. The big secret – none of these payment companies are becoming banks or plan to become banks. Instead, they are often utilizing lesser known companies who behind the scenes offer the regulatory sponsorship and banking technologies needed to provide these products. This collective product offering is known as Banking as a Service or shortened to BaaS.
Crypto Firm Diginex Set for September Nasdaq Listing, CEO Says
Eric Lam – Bloomberg
Hong Kong firm to go public via reverse merger with 8i; SEC approves a rare listing in crypto space, CEO Byworth Says
Diginex Ltd. is on track to go public in September on Nasdaq after the Hong Kong-based cryptocurrency and blockchain-services firm first announced the move via a reverse merger more than a year ago.
What’s Stopping Cryptocurrency From Reaching the Retail Economy?
Josh Tate – Nasdaq
One-third of traditional financial institutions have invested in digital assets or derivatives, according to a Fidelity survey. Yet cryptocurrency still hasn’t achieved mainstream adoption. Volatility is often blamed as the primary culprit and is certainly a barrier, but the solution to that barrier might be easier than people think. In order for cryptocurrency to become stable and scale, it must first become an acceptable payment method across the board. Universality is one of cryptocurrency’s greatest attributes, but acceptability, ironically, is absent.
Kodak Pivots to Drugs After Failing at Photography and Crypto
Eric Newcomer and Michael Tobin – Bloomberg
Eastman Kodak Co. is getting another shot at redemption. The 131-year-old company that once dominated the market for photographic film and made an ill-fated foray into cryptocurrencies is pivoting again. This time, Kodak plans to make ingredients for generic drugs, aided by a $765 million U.S. government loan, the first fruits of a Trump Administration program aimed at bolstering American drug-making capabilities in the age of Covid-19.
CoinShares Joins Blockstream’s Liquid Network; Technology Innovation a Core Driver of Growth as Firm Continues to Expand Capital Markets Footprint and is on Track to Treble Trading Volumes
CoinShares today announced that it has joined the Liquid Network, a sidechain-based settlement network designed by Blockstream that provides asset issuance capabilities, fast settlement times and transaction confidentiality for traders and exchanges.
Why Blockchain Exchanges Are Now Using Traditional Exchange Technology; An increasing number of cryptocurrency exchanges are beginning to take steps to work with traditional stock and asset exchanges.
Oluwatobi Joel – Cointelegraph
Typically, blockchain exchanges and traditional exchanges, such as the Nasdaq or London Stock Exchange, have been seen as polar opposites where blockchain exchanges are seen as a more open, community-focused option, whereas traditional exchanges are seen as relics of the old financial system — stuffy and opposed to blockchain technology and crypto.
Russian Crypto Scams Triple in First Half of 2020
Felipe Erazo – Cointelegraph
Kaspersky Labs and other malware labs have identified a sharp rise in crypto-related scams in Russia during the first half of 2020. Cybersecurity firms have identified an exponential rise in crypto-related scams in Russia during the first half of 2020.
Crypto M&A rumors swirl now that banks can hold Bitcoin
Jeff John Roberts – Fortune
Crypto entrepreneurs are in a fine mood. Digital currency prices are on a new upswing, while a federal regulator ruled last week that banks can hold customers’ Bitcoin in the same way that they safeguard gold, stock certificates, or other valuables.
The ruling is not just a reputation boost for Bitcoin. Industry vets like Messari founder Ryan Selkis also view it as setting the table for a spate of M&A activity as banks look to buy rather build crypto services. All of this has set off a wave of chatter about who might get acquired.
EU May Hit Pause on Tax Talks With Hopes of Dealing With Joe Biden
Birgit Jennen and Viktoria Dendrinou. – Bloomberg
Talks on new tax rules have slowed following U.S. opposition; European officials say negotiations may fare better with Biden
A European effort to update international tax rules has met such stiff opposition from the U.S. that some governments support waiting until after the American presidential election to try to finalize negotiations, according to an official familiar with the discussions.
This Is Not a Disaster Movie. If Congress Doesn’t Act, Though, It Could Start to Feel That Way; As lawmakers quibble over expensing business meals, the consequences for failing to move on a Phase 4 stimulus bill are vast.
Diana Ransom – Inc.
As negotiations over a Phase 4 stimulus bill hit roadblocks in Congress, the prospect of talks breaking down entirely is suddenly realistic. If they do, the consequences for the economy and U.S. businesses will be catastrophic.
Zuckerberg explains to confused congressman why Donald Trump Jr. was banned on Twitter
Jack Morse – Mashable
Leave it to a member of Congress to make Mark Zuckerberg seem relatable. The opening statements at Wednesday’s House antitrust hearing had barely cooled when Republican Congressman Jim Sensenbrenner of Wisconsin accused Facebook of temporarily suspending the account of Donald Trump, Jr. There was just one problem, which the Facebook CEO wasted no time in addressing: Congressman Sensenbrenner had confused Facebook with Twitter.
“A Used-Car Salesman, Both in Demeanor and Honesty”: Wall Street Isn’t Sold on Larry Kudlow’s Economic Delusions
William D. Cohan – Vanity Fair
Has Larry Kudlow, Trump’s director of the National Economic Council, finally lost it? That’s a question many people on and off Wall Street have after his seemingly inane, overly optimistic predictions, on national television, about the direction of the U.S. economy.
Trump Mocked For Saying Biden Aims To Reach Net-Zero Emissions For Buildings By ‘2:30’; “Carbon neutral by 2:30 tomorrow afternoon? Wow, that Biden climate change plan is ambitious!”
Josephine Harvey – Huff Post
President Donald Trump set off a bout of Twitter silliness Wednesday after he went after Joe Biden, his presumed rival in November’s election, for what he called an “impossible” plan to neutralize carbon emissions from new buildings by “two thirty”.
FCA orders finance firms to protect 24m vulnerable customers; Regulator warns Covid-19 has increased number of people at risk of being exploited
Matthew Vincent – FT
Britain’s financial regulator has ordered firms to do more to protect vulnerable customers, after finding that nearly half of all UK adults may be “especially susceptible to harm” and some have been “exploited for gain”.
Former chair of G8 Education Limited committed to stand trial
Jennifer Joan Hutson, of Red Hill, Queensland, has been committed to stand trial on 29 charges after a committal hearing before the Brisbane Magistrates’ Court. The charges were brought by ASIC following an investigation into a 2015 takeover bid by G8 Education Limited (G8 Education), of which Ms Hutson was the former chair, for ASX-listed Affinity Education Group Limited (Affinity) (18-094MR).
ASIC releases final updated guidance on complaints handling
ASIC has today released updated requirements for how financial firms deal with consumer and small business complaints – under their Internal Dispute Resolution (IDR) procedures.
Gifts/Business Entertainment/Non-Cash Compensation FAQs
Q. Would it be consistent with FINRA Rule 3220 (Influencing or Rewarding Employees of Others) and the non-cash compensation provisions of FINRA Rules 2310, 2320, 2341 and 5110 for an associated person to host a virtual business entertainment event or a video meeting with the employees of an institutional customer or third-party broker-dealer and provide food and beverage that is designed to be consumed during that event or meeting?
Small Business Capital Formation Advisory Committee Aug. 4 Meeting to Focus on How Capital Markets Are Serving Underrepresented Founders
The Securities and Exchange Commission today released the agenda for the Tuesday, Aug. 4 meeting of its Small Business Capital Formation Advisory Committee, which will be hosted via video conference.
FCA sets out views on Employer Salary Advance Schemes
This statement explains our view of the risks and benefits of Employer Salary Advance Schemes (ESAS) and what employers and employees should consider when using them.
Securities Commission Malaysia: Bursa Malaysia To Ensure Systems Integrity And Reliability
Following the trading halt on the local stock exchange on 16 July 2020, the Securities Commission Malaysia (SC) has reviewed the incident report and met with senior officials of Bursa Malaysia Berhad (Bursa Malaysia) to assess the measures being taken to address the situation.
Monetary Authority Of Singapore Announces Extension Of The US$60 Billion Swap Facility With The US Federal Reserve And The MAS USD Facility
The Monetary Authority of Singapore (MAS) announced today that it will continue to provide US Dollar (USD) via the MAS USD Facility following the extension of MAS’ US$60 billion swap arrangement with the US Federal Reserve (Federal Reserve) through 31 March 2021.  The MAS USD Facility will offer up to US$60 billion of funding to banks, to facilitate USD lending to businesses in Singapore and the region.
Investing and Trading
California Pizza Kitchen Is Latest Chain to File For Bankruptcy
Luca Casiraghi – Bloomberg
Golden Gate Capital-owned chain filed for Chapter 11 in Texas; Casual-dining chains are among worst hit by pandemic
California Pizza Kitchen Inc. filed for Chapter 11 bankruptcy in Houston on Wednesday, becoming the latest restaurant chain to try to cut debt as it grapples with the pandemic.
Shell and Total escape underlying losses on strong oil trading; Energy majors took combined writedowns of almost $25bn in second quarter
Anjli Raval and David Sheppard and David Keohane – FT
Royal Dutch Shell and Total escaped underlying losses in the second quarter after stronger oil trading results helped offset plunging energy demand triggered by the coronavirus pandemic.
Gold Surge Adds $3 Billion to Three Family Fortunes
Alexander Sazonov and Devon Pendleton – Bloomberg
The precious metal has hit a peak during the Covid-19 crisis; The Kerimovs’ wealth has risen most among gold billionaires
Tech and pharma may be getting the attention these days, but three mining billionaires are quietly padding their fortunes with an investment that’s decidedly more old school.
Women Are Going to Take Charge of $30 Trillion of Wealth in a Decade
Lananh Nguyen – Bloomberg
American women control more than $10 trillion in U.S. household financial assets, an amount likely to triple within a decade. The shift is being driven by aging baby boomers who are set to inherit wealth as they outlive their spouses, as well as by younger women who are becoming more financially savvy, according to a McKinsey & Co. survey of more than 10,000 affluent investors, almost 3,000 of whom are female financial decision-makers.
A $158 Billion CLO Bet Is Putting the Insurance Industry at Risk
Lisa Lee and Katherine Chiglinsky – Bloomberg
Insurers have dramatically boosted CLO assets in recent years; Athene, American Equity among most exposed to lower-rated debt
They’ve been billed as a solution to the rock-bottom interest rates weighing down the returns of America’s asset managers. Collateralized loan obligations — which package and sell leveraged loans into chunks of varying risk and return — have been touted as safe, high-yielding alternatives to everything from government bonds and mortgage securities to corporate debt.
Value Investors Believe Their Long Winter May Soon End; The time-tested strategy lagged for years as growth stocks led the market.
Joanna Ossinger – Bloomberg
What do you do when your money-management strategy, even one with a multidecade history of success, simply isn’t having a good run? That’s the problem facing value investors.
Canceled College Sports Games Could Cost ESPN Millions; Ad revenue will plunge, and cable subscribers may balk at paying for nothing.
Christopher Palmeri – Bloomberg
You almost feel sorry for Mark Packer and Wes Durham. The two veteran broadcasters have what might seem like dream jobs, chatting about college sports for two hours every morning for the Walt Disney Co.-owned ESPN empire. These days they air their show separately from their respective homes, and you can hear the frustration in their voices when yet another athletic league cancels its season or a high-profile school delays its start date because of the coronavirus.
ConocoPhillips sinks to $1bn loss on weak oil price; US producer gradually resumes production as market starts to strengthen
Myles McCormick – FT
US oil producer ConocoPhillips has begun to bring production back online after curtailments in the wake of the price crash pushed it to a $1bn loss in the second quarter.
Environmental, Social and Corporate Governance
Opponents Of New ERISA ESG Guidance May Inadvertently Prove DOL’s Point
Chris Carosa – Forbes
This past June, the Department of Labor (“DOL”) released new guidelines regarding the proper use of incorporating Environmental, Social, and Governance (“ESG”) factors in determining the investments within a retirement plan covered by ERISA.
This hasn’t gone over well with ESG advocates.
DOL Issues Proposed Rule on ESG Investing for ERISA Plans Part 2: Implications for Plan Sponsors and Investment Managers
K&L Gates LLP – JDSupra
ESG-themed funds and investment strategies have attracted tens of billions of dollars in recent years. However, U.S. retirement plan sponsors and other fiduciaries of private-sector retirement assets that would like to consider ESG factors when making investment decisions must consider the U.S. federal pension statute, the Employee Retirement Income Security Act of 1974, as amended (ERISA). ERISA imposes strict investment duties on fiduciaries responsible for investing private-sector pension plan assets, including fiduciaries with responsibility for selecting and monitoring investment options for 401(k) and other individual account retirement plans.
A New ESG Arrives And It’s Cheap
Environmental, social and governance (ESG) exchange-traded funds continue sprouting up. An easy way for new entrants to this increasingly crowded field to make an impression on an investor is with low fees.
What Happened: The SPDR S&P 500 ESG ETF, which debuted Tuesday, accomplishes the goal of cost-effective ESG exposure. With an annual fee of 0.10%, the new SPDR fund is one of the least expensive funds in this category. EFIV follows the S&P 500 ESG Index, the ESG carve out of the benchmark domestic equity gauge.
ESG Investor Gets Funds With $4.6 Trillion to Back Brazil Plan
Lars Erik Taraldsen – Bloomberg
Norway’s biggest private investor, Storebrand Asset Management ASA, says its pressure campaign on Brazil to protect the Amazon forest is having a “real impact.”
Deutsche Bank chief predicts consolidation for banks in Europe; Christian Sewing, CEO of Deutsche Bank, echoed comments he made at the institution’s AGM on consolidation for banks in Europe in the medium-term.
Hayley McDowell – The Trade
Deutsche Bank chief executive, Christian Sewing, has doubled down on his view that the European banking landscape will see more consolidation in the medium-term.
Carlyle Quarterly Profit Falls on Compensation Costs; Private-equity firm paid about $400 million more in performance-related compensation; revenue rose 6.6% from gains in investments and fees
Dave Sebastian – WSJ
Carlyle Group Inc. CG 2.49% said its profit fell as its performance-related compensation costs climbed in the second quarter. The private-equity firm on Thursday posted net income of $145.9 million, or 41 cents a share, compared with $154.1 million, or $1.23 a share, in the comparable quarter last year.
Start-ups for silver surfers; The pandemic has forced more over-65s online quickly — and entrepreneurs will be keen to cash in
Gillian Tett – FT
Last week an 85-year-old friend of mine raised a new investment fund. No surprise there, perhaps: Alan Patricof has spent 50 years working in venture capital and remains determined to stay in the game in a way that reflects New York’s hyperactive work culture.
Credit Suisse launches restructuring after trading profit boost; Lender announces changes to structure under new chief executive Thomas Gottstein
Owen Walker – FT
Credit Suisse unveiled sweeping changes to its structure as the bank benefited from a surge in trading in the second quarter.
Schroders takes crown of UK’s largest listed fund manager; Asset manager leapfrogs Standard Life Aberdeen despite challenging first half for groups including Man
Attracta Mooney and Laurence Fletcher – FT
Schroders has leapfrogged Standard Life Aberdeen to become the UK’s largest listed investment house after its assets under management rose 5 per cent, despite a challenging half-year that included a fall in pre-tax profits and volatile market conditions.
How Pimco’s Cayman-Based Hedge Fund Can Profit From the Fed’s Rescue; Congress said borrowers in taxpayer-backed rescue programs had to be from the United States. Wall Street has a workaround.
Jeanna Smialek – NY Times
Pacific Investment Management Company runs a hedge fund registered in the Cayman Islands, a common structure for avoiding certain U.S. taxes. But when a profit opportunity arose from the ashes of America’s coronavirus crisis, that international location did not stop it from seizing the moment.
Charles Schwab Appoints 2 New Board Members
Ross Snel – Barron’s
Charles Schwab is appointing two new members to its board: Marianne C. Brown, who most recently served as chief operating officer for Fidelity National Information Services ‘ global financial solutions organization; and Gerri K. Martin-Flickinger, Starbucks ‘ chief technology officer.
How Two Sanctioned Russian Billionaire Brothers Bought Art Anyway; Senate investigation says art collectors circumvent U.S. laws to buy, sell and launder millions through art; Rotenbergs deny the claims
Kelly Crow – WSJ
Two months after the U.S. imposed sanctions on Russian construction billionaires Arkady and Boris Rotenberg in March 2014, the brothers sent their art adviser on a shopping spree, according to a Senate investigation report released Wednesday. At a Sotheby’s auction that month in New York, the Rotenbergs, who are lifelong friends of Russian President Vladimir Putin, paid $6.8 million for 10 works of art, including a cubist still life by Georges Braque and a swirling tableau by Marc Chagall, the report said.
China’s Corn-Market Pop Could Lift American Farmers; China has already stepped up purchases of American farm goods, and forecasts record corn imports overall
Lucy Craymer – WSJ
Corn prices in China are soaring, which could be good news for American farmers. As China’s formerly bloated stockpiles shrink, prices have climbed to a five-year high. Since January, front-month corn futures on the Dalian Commodity Exchange have risen 27% to about 2,306 yuan ($329) a metric ton, a level last seen in the summer of 2015.
India Considers Amnesty for Citizens Hoarding Gold Illegally
Siddhartha Singh – Bloomberg
India’s Finance Ministry is considering an amnesty program for residents with illicit stash of gold, as part of an effort to crack down on tax evasion and cut its dependence on imports, according to people with knowledge of the matter.
Morgan Stanley’s Having a Bumper Year in Hong Kong
Julia Fioretti – Bloomberg
A record streak for share sales by health-care and biotech companies in Hong Kong is translating into a bumper year for Morgan Stanley. The U.S. bank has a 20.3% market share of equity offerings in Hong Kong this year, the biggest since 1999, according to Bloomberg League Tables. Goldman Sachs Group Inc. is next accounting for 7.88% while China International Capital Corp. is third with 6.25%.
Australia Sees $10 Billion Opportunity to Harness Solar and Wind
James Thornhill – Bloomberg
Market operator calls for step-up in transmission investment; Nearly two-thirds of coal power likely to retire by 2040
Australia will need to invest A$14 billion ($10 billion) in grid infrastructure to integrate a surge of wind and solar capacity as the transition away from coal-fired power gathers pace, according to the energy market operator.
No-deal Brexit and pandemic a ‘double-whammy’ for car makers; The sector has already seen 11,000 redundancies in the first half of 2020 with fears that many more could be at risk.
Paul Kelso – Sky New
Car production in the UK has fallen to its lowest level since the 1950s as a consequence of coronavirus, triggering many thousands of redundancies as the industry prepares for the “double-whammy” of a potential no-deal Brexit that would compound record losses this year.