Banks Are Fine, but the Economy Isn’t

Jul 15, 2020

First Read

The D-Limit Order Type of IEX Has My Support
By John J. Lothian

Most of you know I prefer markets that are listed. You also know I prefer markets that are not dark. I also prefer markets that have many and a multitude of participants, in numbers and size. These are all features of a proposal from IEX before the SEC for its D-Limit order type. Thus, it was not a surprise to me when representatives from IEX asked me to take a look at the order type, the proposal and the arguments for and against.

D-Limit is a new innovative order type aimed at protecting lit markets from predatory market behavior tied to latency arbitrage strategies. Fighting latency arbitrage strategies is what helped create IEX and their speed bump.

The D-Limit Order is an artificial intelligence order type that protects displayed lit orders from being picked off by latency arbitrage players. The D-Limit Order aims to benefit displayed equity market quotes with better prices, larger displayed sizes and more competition among liquidity providers. I like all of that, and regulators and legislators should too. Innovations that promote liquidity and transparency by encouraging market participants to display their trading interest are good innovations in my book.

To read the rest of this commentary, click here.

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Hits & Takes
By JLN Staff

The Chicago Marathon for the fall has been cancelled due to the pandemic. The Boy Scouts of America have postponed indefinitely their 2021 National Jamboree for next summer. Also, the extended Lothian family has postponed indefinitely a trip to its historic homeland of Scotland for the summer of 2021. The good news about that is we won’t have to fight off all those Outlander tourists.

I made the argument to my family that travel will not return to any kind of normalcy for five years, unless something changes dramatically. I questioned which travel firms, hotels, etc. or even airlines one could use given the uncertainty of the pandemic and the risk of bankruptcy. Already the local travel firm in Elmhurst we used to book our trip to Oberammergau for this summer has closed up after 30 years in business. I hope I am wrong, and my older brother wanted to short my prediction, but I am sticking to my prediction.

Correction: Yesterday a story by Alexander Osipovich titled “Blank-Check Boom Gets Boost From Coronavirus; Volatility prompts companies to go public through SPAC deals rather than traditional IPOs” incorrectly identified the publication the story was from as Bloomberg. Mr. Osipovich is a highly talented reporter who works for the Wall Street Journal. We apologize for our mistake.

Speaking of talented journalists, Jeremy Grant has left PWC and is now a part-time partner of Derwent Advisory, an international advisory group with a presence in New York, Chicago, London, Amsterdam, and Singapore. He has also hung out his shingle as a freelance journalist, according to his LinkedIn profile. If you ever wanted to hire Jeremy for a project, now is your chance.

The CFTC’s Technology Advisory Committee, of which I am a member, will meet on Thursday to discuss, you know, technology stuff. Tune in.

The summer edition of The Trade magazine is out.

I am so out of pop culture that when I saw the headline from Bloomberg “Lady Gaga Dethrones Bad Bunny as the World’s Biggest Pop Star,” my first reaction was, “Who in the heck is Bad Bunny?”

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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How T3 Index’s “VIX-Like” Index for Bitcoin Works
By Matt Raebel

T3 Index, the creators of the SPIKES Volatility Index have created a new volatility index, which uses bitcoin options to track the volatility of the world’s first and most widely-traded cryptocurrency, bitcoin (BTC).

The index, called the BitVol Volatility Index (“BitVol”) uses strike prices from tradable bitcoin options on a popular cryptocurrency derivatives exchange to determine the expected 30-day implied volatility of bitcoin, the world’s first and biggest digital asset by market cap. Simon Ho, the CEO of T3, said via email that BitVol currently sources its data directly from Deribit, a Panama-based cryptocurrency derivatives exchange that produces the lion’s share of bitcoin options trading volume globally (at time of writing). Ho also said that T3 Index is currently working on building out an aggregated data feed from multiple digital asset exchanges, but that data from institutional platforms like the CME’s bitcoin options and Bakkt will “likely not be used at this stage.” Ho declined to comment on this topic further.

To read the rest of this story, click here.

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Central bankers say now is the time to get ready for end of Libor
Reuters
Top central bankers in the United States and Britain said the end-2021 deadline for dropping the Libor benchmark interest rate would not be extended because of the COVID crisis and lenders and borrowers had to have their transition plans in place now.
/reut.rs/30doqev

***When you have to guess what the levels are, maybe something with real data would be better.~JJL

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Wall Street Regulator Will Watch Markets From Home Until October
Ben Bain – Bloomberg News
The U.S. Securities and Exchange Commission will allow most employees to continue working from home at least until October as the Wall Street regulator extends accommodations initiated in response to the coronavirus pandemic. SEC Chairman Jay Clayton said in an email to staff late last week that the agency had been functioning well with employees working remotely and that the extension would allow time to see how schools and other organizations approached reopening after the summer. The 4,000-person SEC in March was one of the first federal agencies to tell employees to stay home due to the public health emergency.
/bit.ly/2OlgdiU

*****JLN is right there with you, SEC.~JJL

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Leading with Culture in the Time of COVID-19
Brian Mehta via LInkedIn
Throughout my career I’ve always believed that if you lead with cultivating a positive culture you can achieve so much more as an organization. Now more than ever, having a strong and tight-knit company culture is so important for the well-being of your teams and the success of your business.
/bit.ly/2DJF3XJ

*****Brian Mehta is a thought leader worth reading.~JJL

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BSA postpones 2021 National Jamboree because of COVID-19 pandemic
Michael Freeman – Bryan on Scouting
The Boy Scouts of America is committed to the safety of all youth in its programs. The unpredictability of the ongoing COVID-19 pandemic coupled with the impact it has had on BSA councils so far prompted the difficult decision to postpone the 2021 National Jamboree. This decision was not made lightly. Being prepared for the largest national gathering of Scouts takes years to do. The pandemic and the unresolved issues surrounding it has made it exceedingly difficult to plan for this event and do so in a way that would keep the safety of Scouts, volunteers, staff and communities at the forefront.
/bit.ly/3gTJA8i

*****My daughter Katherine’s fall job teaching at the site of the Jamboree is also postponed until spring at best. She is at the Bechtel Family Summit working as the head lifeguard this summer.~JJL

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Dodgers Offer Fans Opportunity To Purchase Cardboard Cutout For Display During 2020 Season
Wyatt Smith – KHTS
The Los Angeles Dodgers announced an opportunity for fans to purchase a cardboard cutout of themselves to be displayed during Dodgers home games in the 2020 MLB season.
With fans unable to attend MLB games in person in California for the foreseeable future, teams have been on the lookout for opportunities to liven up the atmosphere in the stadium for their television broadcasts.
/bit.ly/3h61h4F

*****Could we get multiple pictures of Steve Bartman in the stands?~JJL

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Tuesday’s Top Three
Our top story Tuesday was, once again, Seven Rules of Zoom Meeting Etiquette From the Pros, from the Wall Street Journal. Of course, “the pros” are just a number of random executives the author chose to quote, so take it with a grain of salt. Second was the New York Times op-ed The Pandemic Could Get Much, Much Worse. We Must Act Now. I can’t argue with that one – at least the headline. Third was the breaking news Queen Elizabeth II sells gin made from leaves found at Buckingham Palace after tourist revenues crash, from MarketWatch.

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Lead Stories

Banks Are Fine, but the Economy Isn’t; The biggest banks proved their ability to generate revenue through tough times, but they said little that would indicate the economy is poised for a sharp recovery
Telis Demos – WSJ
Two of the three big banks that reported results on Tuesday still earned a lot of money in the second quarter. That is less reassuring than investors might hope. Underlying the banks’ relative resilience in the second quarter were some arguably temporary benefits that don’t really address the long-term economic risks. Reserve builds in anticipation of future credit losses remain a major swing factor for earnings at Citigroup, C -3.93% JPMorgan Chase, JPM 0.57% which turned profits, and Wells Fargo, WFC -4.57% which didn’t. But bankers stressed that their provisioning remains highly subjective and they lack much visibility into the true health of consumers, the biggest source of credit risk.
/on.wsj.com/3h2vX6J

In the Fog of Pandemic, Companies Are Embracing Epidemiology; Without clear guidance from government authorities, companies big and small are left to fend for themselves.
John Tozzi, Riley Griffin – Bloomberg
On the last day of February, when health officials in Washington state announced some of the earliest known Covid-19 cases in the U.S., a Microsoft Corp. executive emailed officials at the King County health department to ask for help. Seattle business leaders were meeting the next day, and “they would like someone that can best speak to what businesses should do,” wrote Colleen Daly, a senior benefits executive. In a follow-up the next morning, she wrote that companies were “spinning on” questions of whether to cancel events, restrict travel, or send workers home. “Since this is an emotional situation we are seeing businesses struggle to stay grounded,” she wrote.
/bloom.bg/3eqEzlW

Banks Stockpile Billions as They Prepare for Things to Get Worse;l JPMorgan Chase, Citigroup and Wells Fargo said that as long as the economy behaved according to their forecasts, they were braced for more pandemic-induced pain.
Emily Flitter, Stacy Cowley and Gillian Friedman – NY Times
Three of the nation’s biggest banks revealed Tuesday that they had set aside billions of dollars to cover potential losses on loans, signaling that they don’t expect consumers and corporations to be able to pay their debts in the coming months as the pandemic continues to gut employment and commerce.
/nyti.ms/3iZyXCN

What Hong Kong Losing Its U.S. ‘Special Status’ Means
Iain Marlow and Daniel Flatley – Bloomberg
Under the United States-Hong Kong Policy Act of 1992, the U.S. treated Hong Kong, a semi-autonomous part of China with its own legal and economic system, differently than the Chinese mainland in trade, commerce and other areas. President Donald Trump, punishing China for moves to tighten its grip on the city after a year of pro-democracy street protests, says Hong Kong’s special status is now a thing of the past. At its most extreme, that could mean the global financial hub is treated the same as any other Chinese city — a seismic shift that could harm both economies at an already difficult time.
/bloom.bg/2WCITbV

Farewell, Fees? How Zero-Cost Investing Caught On
Claire Ballentine and Annie Massa – Bloomberg
Investors have gotten used to paying lower fees to buy and hold stocks and funds. But the trend entered a whole new phase this past year as U.S. brokers and fund managers began offering stock trades and investments at zero cost. Any suspicion that zero-cost investing was a gimmick was quashed in October when industry titan Charles Schwab Corp. announced plans to eliminate commissions for U.S. stocks, exchange-traded funds and options. Its competitors soon followed suit — but it soon turned out that the trend could have some limits.
/bloom.bg/2WloqYU

Big banks prepare for protracted recession, report significant drop in profits; JPMorgan Chase, Citigroup and Wells Fargo set aside billions in capital as they prepare for customers to default on loans
Renae Merle – Washington Post
The recession triggered by the coronavirus pandemic will be deeper and longer than initially expected, according to three big banks that reported significant decreases in quarterly profits Tuesday.
/wapo.st/3j5PDsb

‘This Is Not a Normal Recession’: Banks Ready for Wave of Coronavirus Defaults; JPMorgan, Citigroup and Wells Fargo stockpile $28 billion to cover potential loan losses
Ben Eisen and David Benoit – WSJ
The largest U.S. banks signaled that the worst of the coronavirus recession is yet to come, opting to stow away tens of billions of dollars to prepare for an expected wave of loan losses. JPMorgan JPM 0.57% Chase & Co., Citigroup Inc. C -3.93% and Wells Fargo WFC -4.57% & Co. said Tuesday they took large hits to their second-quarter profits to collectively stockpile $28 billion to cover losses as consumers and businesses start to default on their loans.
/on.wsj.com/30bAxZE

Fed’s Brainard Sees Substantial Economic Risks and Slow Recovery; ‘A thick fog of uncertainty still surrounds us, and downside risks predominate,’ says Fed governor Lael Brainard
Nick Timiraos – WSJ
A top official at the Federal Reserve said difficulty suppressing the new coronavirus will pose substantial risks for the U.S. economy, including a possible double dip in economic activity, and warned that the nation faces a long, slow recovery even if those hazards are avoided.
/on.wsj.com/309PGdS

U.K. Bars Huawei for 5G as Tech Battle Between China and the West Escalates;Banning the use of the Chinese tech giant’s equipment in high-speed wireless infrastructure is a major reversal by Prime Minister Boris Johnson — and a big victory for the Trump administration..
Adam Satariano, Stephen Castle and David E. Sanger – NY Times
Britain announced on Tuesday that it would ban equipment from the Chinese technology giant Huawei from the country’s high-speed wireless network, a victory for the Trump administration that escalates the battle between Western powers and China over critical technology.
/nyti.ms/2WoDdlD

Cash-Strapped Businesses Hit Tax Day With New Reasons to Worry
Laura Davison – Bloomberg
Filing deadline coincides with date for estimated tax payments; Taxpayers were given extra time to file because of pandemic
U.S. taxpayers were given an additional three months to file tax returns this year because of the coronavirus crisis, but even the extra time hasn’t been enough for some businesses struggling to pay the government as the pandemic threatens to worsen.
/bloom.bg/30bwht3

The Dutchman UBS Is Counting On to Disrupt Wealth Management; Ralph Hamers turned ING into a digital leader. Can he do the same at the safe-and-steady Swiss giant?
Marion Halftermeyer, Ruben Munsterman – Bloomberg
The headquarters of UBS Group AG sits on Zurich’s toniest shopping street, flanked by the likes of Chanel, Louis Vuitton, and Prada. The century-old stone colossus is fronted with pillars that evoke the Parthenon, the floors inside are marble, the walls are oak, and executives can use a special side entrance and elevator to whisk them to their offices. Everything about the place projects an image of quiet wealth, the gravity of serious people with serious money, and above all discretion in their efforts to preserve fortunes for generations.
/bloom.bg/2CcVOtX

A Stay-at-Home Stock Market Kept Investors Afloat; There’s a rational explanation for the buoyancy of U.S. equities even in a capsized coronavirus economy.
Matthew A. Winkler – Bloomberg
The coronavirus stock market, like Covid-19 itself, is something never experienced before. Get used to it. Since March, when the global pandemic became an American catastrophe, the U.S. economy has been a shadow of its 2019 self. Yet some of the most-followed measures of equity set records while an explosion in infections showed no sign of peaking and the 14.7% unemployment rate in April was the worst since the Great Depression. The seeming contradiction of simultaneous exuberance and disaster reflects a durable change in the way investors look at U.S. companies even as wishful politicians yearn to return to an old normal.
/bloom.bg/2DCa3Zw

How to Turn Negative Equity Into a $30 Billion Market Cap; Call it the Tesla effect. The slightest whiff of electric vehicle ambition, and this Chinese company’s stock goes through the roof.
Shuli Ren – Bloomberg
For weeks, those of us in Asia watched the U.S. stock frenzy with amazement — how a video game-like trading interface could lure millennials, cost fortunes and some even their lives; how Tesla Inc. founder Elon Musk became richer than Warren Buffett; and why on earth retail investors were rushing to buy shares of Hertz Global Holdings Inc., even though the car rental company had filed for bankruptcy.
/bloom.bg/32m40Tw

Wirecard Gets a Win as U.K. Court Dismisses Fraud Case Over Deal
Karin Matussek – Bloomberg
Commercial Court rejects case over Hermes unit without trial; Suit’s allegations contradicted by other evidence, judge rules
Wirecard AG, the insolvent German payments processor engulfed in the country’s biggest accounting scandal, won dismissal of a U.K. fraud case over its 2015 purchase of an Indian company.
/bloom.bg/3epwVby

At Evercore, a Dean of Wall Street and Washington Elevates New Leaders; Roger Altman names Ralph Schlosstein, John S. Weinberg co-CEOs, co-Chairmen
By Liz Hoffman – WSJ
Roger Altman founded Evercore Inc. EVR 0.23% in 1995 after a long career on Wall Street and Washington. He’s now laying the groundwork to make sure it thrives after he exits. Evercore will elevate a pair of executives, Ralph Schlosstein and John S. Weinberg, to be co-chief executive officers and co-chairmen of the board, allowing the 74-year-old Mr. Altman, Evercore’s senior chairman, to take another step back from the firm he built into a small but notable player on Wall Street.
/on.wsj.com/2DNHXuJ

ESG Investing in the Pandemic Shows Power of Luck; Multiplicity of environmental, social and governance grading schemes sows confusion
By James Mackintosh – WSJ
Does ESG investing make money? The trouble with asking about environmental, social and governance investing is that it isn’t a thing that can be measured—or rather, it is lots of things all measured differently. That hasn’t stopped the U.S. Department of Labor proposing a new regulation to prevent pension funds from using an ESG approach unless they expect it to make more money.
/on.wsj.com/3hdW1ft

‘Gotham Refuses to Get Scared’: In 1918, Theaters Stayed Open; With an influenza pandemic and a war on, New York’s health commissioner took an unorthodox stand, declining to shutter public entertainment.
By Laura Collins-Hughes – NY Times
War plays were big on Broadway in the fall of 1918. With the nation sending soldiers to Europe to fight in World War I, spectacles like the “Ziegfeld Follies” wrapped themselves in patriotism.
/nyti.ms/2DL38gR

Coronavirus

EU Resists Further Travel Opening With New Virus Wave a Risk
Jonathan Stearns – Bloomberg
U.S., most other nations remain blacklisted for two more weeks; Bloc completes first review of July 1 easing of border closure
The European Union recommended keeping its external borders shut to Americans and most other foreigners for at least two more weeks as fears grow of a second coronavirus wave, according to officials familiar with the matter.
/bloom.bg/32fA2Aq

Why Covid-19 is a gift for cyber criminals; ‘This crisis has left us so distracted and disoriented that our defences are down, even as we depend more than ever on all things digital’
Gillian Tett – FT
A few weeks ago I took part in a ­webinar designed to help US Hispanic-led businesses survive the economic shock of Covid-19. One of the speakers at this “Hispanic Recovery” event was Jesus Mantas, an IBM executive, who issued a heartfelt warning.
/on.ft.com/3h5THGX

Best Buy to Require Shoppers to Wear Masks Inside Its Stores; Electronics chain joins Starbucks and Costco in requiring masks to combat spread of coronavirus
Sharon Terlep – WSJ
Best Buy Co. BBY 1.51% will require customers to wear face coverings inside all U.S. stores to protect against the new coronavirus, including in places without mask mandates.
/on.wsj.com/2C5lQ2p

Navigating Monetary Policy Through The Fog Of COVID, Federal Reserve Governor Lael Brainard, At The Perspectives On The Pandemic Webinar Series, Hosted By The National Association For Business Economics, Washington, D.C. (Via Webcast)
Mondovisione
The COVID-19 contraction is unprecedented in modern times for its severity and speed. Following the deepest plunge since the Great Depression, employment and activity rebounded faster and more sharply than anticipated. But the recent resurgence in COVID cases is a sober reminder that the pandemic remains the key driver of the economy’s course. A thick fog of uncertainty still surrounds us, and downside risks predominate. The recovery is likely to face headwinds even if the downside risks do not materialize, and a second wave would magnify that challenge. Fiscal support will remain vital. Looking ahead, it likely will be appropriate to shift the focus of monetary policy from stabilization to accommodation by supporting a full recovery in employment and a sustained return of inflation to its 2 percent objective.1
/bit.ly/2WlMcDT

Walking the Coronavirus Containment Tightrope: How Countries Balance Saving Lives and the Economy; A reopening strategy should boost ability to test, trace and isolate carriers and manage social-distancing while allowing the economy to breathe
Marcus Walker – WSJ
As the world relaxes its lockdowns against the coronavirus pandemic, the early results range from fragile success to worsening crisis.
/on.wsj.com/2Wnk1oi

Frieze’s London Fairs Are Art World’s Latest Cancellations; The premiere fairs are off, and a gallery-based Frieze Week looks doubtful because of the “continued unprecedented challenges” of the pandemic.
Scott Reyburn – NY Times
This October’s Frieze London and Frieze Masters art fairs, the double-headed centerpiece of the British capital’s busiest art market week, have been canceled “in light of continued unprecedented challenges regarding Covid-19 (coronavirus),” the organizers said Tuesday.
/nyti.ms/3h2gVxI

‘Hero’ Pay Raises Disappear for Many Essential Workers; Several retailers have ended the pay raises and bonuses they gave to employees as an appreciation for their courage and commitment in showing up to work during the pandemic.
Michael Corkery – NY Times
Many retailers across the United States have quietly stopped providing their workers with the pay raises they had dispensed at the start of the pandemic, despite surging virus numbers in many states.
/nyti.ms/2WgFJdB

Automakers Are Making Cars, but Virus Surge Puts That at Risk; Some workers are calling on the industry to shut down plants in states where virus cases have increased sharply in recent weeks.
Neal E. Boudette – NY Times
Automakers are back to building cars and trucks at full speed — at least for now. But as coronavirus cases rise across much of the country, it may become difficult for the companies to keep at it.
/nyti.ms/2WlRC21

Covid has exposed society’s dysfunctions; If we wish to avoid a political breakdown we should not seek to suppress markets, but instead temper their gales
Martin Wolf – FT
We are living in an era of multiple crises: Covid-19; a crisis of economic disappointment; a crisis of democratic legitimacy; a crisis of the global commons; a crisis of international relations; and a crisis of global governance. We do not know how to deal with all of these. This is partly because it is hard to develop the needed ideas for reform. Yet it is far more because politics cannot deliver the necessary changes.
/on.ft.com/3h5V5cV

Jump in Coronavirus Cases Could Jeopardize Oil Market Recovery, OPEC Says; Cartel sees the global economy shrinking by 3.7% this year—more than previously forecast
David Hodari – WSJ
Even a record-breaking rise in oil demand next year won’t be enough to spur a recovery back to pre-coronavirus levels, according to the Organization of the Petroleum Exporting Countries.
/on.wsj.com/32k5c9N

Florida, Haven for NBA and Trump, Sets Covid Death Record
Jonathan Levin, Brandon Kochkodin, Olivia Raimonde, and Emma Kinery – Bloomberg
Sports leagues and politicos relocated. Now, it’s dangerous; DeSantis stays the course with virus case count burgeoning
Florida was supposed to be the solution: a virus-fighting success story that could relaunch stalled professional sports and host the relocated Republican National Convention. Instead, the coronavirus wildfire is raging just as National Basketball Association games are supposed to start and the GOP puts the final touches on its party.
/bloom.bg/2Wm7OjG

France to give $9 billion in pay raises to health care workers
Niamh Kennedy and Alexander Durie – CNN
(CNN)France will give health care workers across the nation $9 billion in pay raises in recognition of their work during the pandemic, the country’s Prime Minister Jean Castex has said.
/cnn.it/3gYmbCA

CDC director offers bleak public health outlook for fall and winter
Amanda Watts – CNN
Dr. Robert Redfield, director of the US Centers for Disease Control and Prevention, said he thinks “the fall and the winter of 2020 and 2021 are going to be the probably one of the most difficult times that we experienced in American public health.” Speaking Tuesday during a webinar with the Journal of the American Medical Association (JAMA), Redfield said this is all due to the potential co-occurrence of Covid-19 and the flu.
/cnn.it/2DESmbL

Immunity to covid-19 could disappear in months, a new study suggests
TechnologyReview.com
The lowdown: Immunity to covid-19 may be short-lived, according to a new longitudinal study of people who have caught the disease and recovered.
/bit.ly/3h4eVVE

More than 1,000 CDC employees sign letter decrying ‘toxic culture’ of racism in agency; A letter issued to Director Robert Redfield details the need to overhaul a racist system within the CDC.
Alexandra Kelley – The Hill
As Americans look to the U.S. Centers for Disease Control and Prevention (CDC) to navigate the country out of the COVID-19 pandemic, more than 1,000 employees at the CDC have penned a letter documenting “ongoing and recurring acts of racism and discrimination” against Black employees, according to NPR.
/bit.ly/30dQPkM

Tokyo Lifts Virus Alert to Highest Level, Urges Caution in Bars
Gearoid Reidy – Bloomberg
Tokyo says avoid bars, restaurants flouting virus guidelines; Koike says government should review regional tourism campaign
Tokyo raised its alert level for coronavirus to the highest on a four-point scale as authorities urged people to modify their behavior in order to prevent a further spread of infection within the capital.
/bloom.bg/3j2HXqB

South African Regulator Sees No Systemic Risk From Virus Claims
Roxanne Henderson – Bloomberg
South Africa’s Prudential Authority expects that business-interruption claims linked to the Covid-19 pandemic poses little systemic risk to the insurance industry.
/bloom.bg/2OpIip8

Serbia Makes Wearing Masks Mandatory, Limits Public Gatherings
Gordana Filipovic – Bloomberg
Serbia imposed a new series of social-distancing and other restrictions to combat a resurgence in new cases of coronavirus. Authorities made wearing face masks mandatory, even outdoors, said people should keep 1.5 meters apart whenever possible, and restricted public gatherings to no more than 10 people, the state crisis committee said Wednesday.
/bloom.bg/3fzdBd6

Sweden’s light-touch Covid-19 approach spared economy, says SEB chief; Johan Torgeby believes lack of formal lockdown helped domestic companies
Richard Milne – FT
Sweden’s light-touch response to coronavirus has helped its economy and limited loan losses for the banking sector, the head of one of the country’s largest lenders has said.
/on.ft.com/3hdU2b1

Dr Fauci deserves better from US administration; Donald Trump ignores the importance of independent minds
The editorial board – FT
Dr Anthony Fauci is not running against Donald Trump for the White House in November. That this needs clarifying attests to the negative attention bestowed on America’s top infectious-diseases expert by its president. It is not just that Dr Fauci has been frozen out: he last briefed Mr Trump eight weeks ago, as he revealed to the FT over the weekend. The administration has also spun against him as a Covid-19 pessimist, blocking the reopening of schools and commerce. Officials have sent journalists a “gotcha” list of his allegedly erroneous past remarks. Mr Trump himself has criticised him by name on television. Even Joe Biden, the president’s Democratic challenger, has received less of his animus of late.
/on.ft.com/2CdhG8v

Exchanges, OTC and Clearing

CME Group Announces Aug. 31 Launch of Micro E-mini Options
CME Group
CME Group, the world’s leading and most diverse derivatives marketplace, today announced options on its Micro E-mini S&P 500 and Micro E-mini Nasdaq-100 futures contracts will be available for trading Aug. 31, 2020, pending regulatory review.
/bit.ly/2C5iTPn

CME Group Adds Access to Delayed and JSON Formatted Data Via Google Cloud
PR Newswire
CME Group, the world’s leading and most diverse derivatives marketplace, today announced that customers can now access its delayed and JavaScript Object Notation (JSON) formatted futures data through Google Cloud. With the addition of these native cloud solutions, it is easier than ever for customers to consume CME Group’s valuable suite of market data products.
/prn.to/2Zw1QyC

ESG Data Coming to U.S. Via Nasdaq
MarketsMedia
ESG data is coming to the U.S. – ASAP. North American Investors and traders interested in gaining exposure to Environmental Social and Governance (ESG) markets are about to gain a competitive advantage thanks to Nasdaq via its recent alliance with TrackInsight. TrackInsight (www.trackinsight.com) is a leading global independent ETF analytics platform that operates a global platform dedicated to ETF search, analysis and selection aimed at professional investors.
/bit.ly/2WjKpiE

Centennial Securities selects RBC Correspondent Services as new clearing partner
RBC Wealth Management
RBC Correspondent Services, one of the largest clearing providers in the U.S., today announced that Centennial Securities, a registered broker-dealer and investment advisor firm headquartered in Grand Rapids, MI, has chosen the firm as its new clearing and premier service provider.
/bit.ly/30cjVkw

SIX Exchange Regulation AG: Sanction Proposal Against The Native SA
Mondovisione
SIX Exchange Regulation AG (SER) has submitted a request for a sanction to the Sanctions Commission of SIX Group against The Native SA concerning alleged violations of the applicable accounting standards Swiss GAAP FER in the 2017 annual and 2018 interim financial statements.
/bit.ly/2CcU1oI

Tadawul Announces The Launch Date Of The Derivatives Market
Mondovisione
The Saudi Stock Exchange (Tadawul) announces that the launch date of the Derivatives Market will be on Sunday, 30 August 2020. This will mark the beginning of trading in the Saudi Futures 30 (SF30) Index Futures Contract, Saudi Arabia’s first exchange-traded derivatives product.
The launch of The Derivatives Market is a significant step to further advance the Saudi capital market, providing investors with a full and diversified range of investment products and services. The SF30 Index Futures Contract is based on the MSCI Tadawul 30 (MT30) Index. The SF30 will provide investors with hedging tools to more effectively manage risk and will deliver expanded opportunities to gain exposure to the Saudi capital market.
/bit.ly/2C41Lti

ICE sees record ETF Hub volumes in second quarter; The ICE ETF Hub saw record notional volume in the second quarter, after welcoming Credit Suisse and Wells Fargo as authorised participants.
By Annabel Smith – The Trade
US derivatives exchange group ICE has confirmed that its exchange traded funds (ETF) hub traded record notional volume of $148 billion in the second quarter this year.
/bit.ly/3gYxJWz

REGIS-TR UK Ltd. appoints John Kernan to Board of Directors
Gruppe Deutsche Börse
REGIS-TR UK, the UK company within the European trade repository’s franchise, has appointed John Kernan to the Board of Directors. Kernan will also assume the role of Chief Executive of the company.
/bit.ly/2WgVwsT

Fintech

Exchange Data International (EDI) Partners with Securities Quote Xchange (SQX) to Offer Structured-Note Pricing
EDI
SQX, developer of the first broker-quote aggregation service for the US bond market, today announced a partnership with Exchange Data International (EDI) to distribute broker-quoted, structured-note pricing.
/bit.ly/2WikrfD

Barchart Releases API-based Market Alerts Service for Third-Parties
Barchart
Barchart, a leading provider of data and technology services to the financial, media, and commodity industries has announced the release of a new market Alerting Service for third-parties. This data-driven alert distribution service provides firms with the ability to easily integrate event-based alerts using any data that is available within Barchart’s ecosystem into their websites, software, mobile apps and internal systems. As an API-based managed service, third-parties can easily build their own interface around the service which then monitors user specified conditions in real-time and notifies users via text message, email notifications, iOS/Android push notifications, or a web service, when an alert is triggered.
/bit.ly/2OpCPid

BIS: CPMI Report Identifies Steps To Enhance Cross-Border Payments
Mondovisione
The CPMI report comprehensively sets out the necessary elements to improve cross-border payments to make them faster, cheaper, more transparent and inclusive; The CPMI is committed to taking a leading role in developing and implementing a global roadmap as part of the G20’s mission to tackle this multidimensional task.
Resolving the longstanding frictions and challenges in cross-border payments would boost global trade, development and economic growth.
Cross-border payments suffer from a number of frictions – they can be slow, expensive, unreliable and unavailable in some countries. These shortcomings are longstanding and have been thrown into sharp relief by improvements in domestic payments and by developers of proposals for new payment arrangements, like Libra.
/bit.ly/3j5vrqA

Xignite Introduces New Development Program Offering Financial Data APIs to Early Stage Fintechs; Market and financial data solutions provider offering support to next wave of entrepreneurs during these especially challenging times
Xignite
Xignite, Inc., a provider of market data distribution and management solutions for financial services and technology companies, announced today it has created a new program to assist early stage and start-up financial technology companies during the COVID-19 pandemic. To apply for this program visit https://www.xignite.com/fintech-development-program/.
/bit.ly/2Zs8PbX

Fiserv To Release Second Quarter Earnings Results On August 5, 2020
Mondovisione
Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions, will announce its second quarter financial results after the close of regular market trading on Wednesday, August 5, 2020.
/bit.ly/3h0vEt5

Google Cloud Chief Finds Opportunities in Pandemic for Customer Connection; ‘Every week, there’s a new set of dimensions, and we have to adapt,’ said Thomas Kurian
Sara Castellanos – WSJ
Google Cloud is racing to roll out new features and services aimed at helping its enterprise customers maintain business continuity during the coronavirus pandemic, including a new security product expected to launch Tuesday, said Thomas Kurian, chief executive of the Google LLC unit.
/on.wsj.com/32jmljS

Jack Ma’s fintech giant tops 1.3 billion users globally
Rita Liao – Techcrunch
The speculation that Alibaba’s fintech affiliate Ant Group will go public has been swirling around for years. New details came to light recently. Reuters reported last week that the fintech giant could float as soon as this year in an initial public offering that values it at $200 billion. As a private firm, details of the payments and financial services firm remain sparse, but a new filing by Alibaba, which holds a 33% stake in Ant, provides a rare glimpse into its performance.
/tcrn.ch/2Wn99Xt

FlexTrade adds Liquidnet targeted invitations to EMS; Traders can access targeted actionable liquidity from Liquidnet via the FlexTrade EMS under new partnership.
By Hayley McDowell – The Trade
Trading systems provider FlexTrade has confirmed the addition of targeted invitations in its multi-asset trading blotter for equities. The move will provide traders using the FlexTRADER execution management system (EMS) with targeted natural liquidity from other buy-side members and brokers that are part of the Liquidnet ecosystem.
/bit.ly/3j1xD2l

Cryptocurrencies

Huobi Futures to launch bitcoin options trading in Q3; Following the successful launch of perpetual swaps in Q2 of this year, Huobi Futures will be aiming to launch bitcoin options trading in Q3.
Hedgeweek.com
Bitcoin options are a form of financial derivative that gives the trader the right, but not the obligation, to buy or sell Bitcoin at a specific price at a certain date of expiry.
/bit.ly/2ZuUxaC

This New Coding Language Could Help Unlock Bitcoin’s Smart Contract Potential
Alyssa Hertig – Coindesk
Bitcoin Core contributor Jeremy Rubin has revealed his work on a new smart-contract language for Bitcoin, which he hopes will increase the “financial self-sovereignty” of users.
/bit.ly/306OdVK

Russian Activists Use Bitcoin, and the Kremlin Doesn’t Like It
Anna Baydakova – Coindesk
No government can stop bitcoin transactions, which suggests the cryptocurrency is an ideal way for dissidents and activists to raise funds. This should be especially true in Vladimir Putin’s Russia, where independent politicians and civic groups have been under increasing pressure from the Kremlin. Opposition politicians, human rights groups and independent media are routinely harassed by law enforcement raids, steep fines and bank account freezes. Bitcoin, which allows pseudonymous donations, would in theory be a lifeline for political activists. The reality, however, is more complex.
/bit.ly/3eDnENj

Jack Abramoff Pleads Guilty in Illegal Investment Promotion
Joel Rosenblatt – Bloomberg
Lobbyist Jack Abramoff pleaded guilty by telephone Tuesday to criminal charges that he illegally promoted to investors a cryptocurrency called AML BitCoin. The former Washington insider, who went to prison in a 2006 lobbying scandal, joined a teleconference with a federal judge in San Francisco to enter his plea instead of appearing in person because of the coronavirus pandemic.
/bloom.bg/3j1szLn

Japan is seriously considering to issue digital currency – report
Yogita Khatri – The Block
Japan’s government is said to be seriously considering issuing a central bank digital currency (CBDC). Japan’s largest financial newspaper Nikkei reported the news on Tuesday, saying that the government will include the CBDC plan in its policy framework this year. The inclusion of such a plan in Japan’s policy framework would make it official government policy, per the report.
/bit.ly/2Wm3aCp

Does China actually control Bitcoin?
Daniel Phillips – Decrypt
Chinese Bitcoin miners currently control 65% of the Bitcoin network hash rate, enough to perform a successful 51% attack. Such an attack would require collusion between potentially tens of thousands of individual Chinese miners, and remains extremely unlikely. By minting almost two-thirds of new Bitcoin, China has strong, but not absolute control over Bitcoin’s market price.
/bit.ly/305LMCE

The parent company of BitMEX has restructured, and it points to ambitions outside of crypto
Frank Chaparro – The Block
HDR Global Trading, the parent company of popular crypto trading venue BitMEX, announced Tuesday evening it would restructure and create a new holding company to sit on top of the firm’s existing operations. Dubbed 100x Group, the entity will “pursue a broader vision to reshape the modern digital financial system into one which is inclusive and empowering,” a press release said. “100x will become the holding structure for HDR and all their other assets, including the BitMEX platform.”
/bit.ly/2OtTZLA

China to Test Digital Yuan on Tencent-Backed Food Delivery Platform
Paddy Baker – Coindesk
China wants to trial its digital yuan on online food seller Meituan-Dianping, as well as another two Tencent-backed companies. The Beijing-based company has held talks with the research wing at the People’s Bank of China (PBoC) over trialing the digital yuan on their platform, according to sources speaking to Bloomberg. The exact details of the collaboration are not yet known; the digital yuan is formally known as the Digital Currency Electronic Payment (DCEP) Listed in Hong Kong, Meituan-Dianping’s 400 million active users make it one of the largest food delivery platforms in the world; revenues in 2019 increased nearly 50% to RMB97.5 billion (~$14 billion).
/bit.ly/30jg5pU

Revolut teams up with Paxos to launch crypto service in the US, and it points to broader trends in the fintech space
Frank Chaparro – The Block
Count this as the latest sign that fintech companies see cryptocurrency as a promising way to expand their business. European fintech unicorn Revolut announced Wednesday that it is set to gate-crash the U.S. market, offering crypto trading services in the country via its platform which spans stock trading and checking account services in Europe. But unlike rivals like Bitstamp and eToro who recently ventured into the U.S. market, Revolut is partnering up with Paxos in a move that might set the foundation for other fintech firms to dive into the market.
/bit.ly/390Tkus

*****Here is another story on this topic from Coindesk.MR

Texas man charged with using coronavirus relief funds to invest in crypto
Michael McSweeney – The Block
A Texas resident has been charged by U.S. officials with using government funds from a coronavirus-related relief program to trade cryptocurrencies. In a June 14 press statement, the Department of Justice alleged that Joshua Thomas Argires “fraudulently obtained more than $1.1 million in Paycheck Protection Program (PPP) loans” by filing false applications on behalf of two companies, Texas Barbecue and Houston Landscaping. CoinDesk first covered the charges.
/bit.ly/32joHPH

Cryptocurrencies Have ‘No Way’ to Comply With US Anti-Encryption Bills
Benjamin Powers – Coindesk
Multiple bills that threaten encryption are moving through the U.S. Senate and could pose a threat to technology that protects users’ privacy, industry pros say. These bills include the Lawful Access to Encrypted Data (LAED) Act and the Eliminating Abusive and Rampant Neglect of Interactive Technologies (“EARN IT”) Act. While the LAED was only recently introduced to the Senate, the EARN IT act has been in the works for months, and has been amended a number of times.
/bit.ly/3etmmEb

Darknet use of bitcoin mixers surged in 2020’s first quarter: report
Michael McSweeney – The Block
New data published by blockchain analytics service Bitfury Crystal shows a significant increase in the use of bitcoin transaction mixers between the last quarter of 2019 and the first quarter of this year. In dollar terms, the jump represents an increase of 294%. The Crystal report notes the significant rise seen year-over-year as well.
/bit.ly/32x9R8D

Politics

Different Names, Same Address: How Big Businesses Got Government Loans Meant for Small Businesses; ProPublica found at least 15 large companies that received over half a billion dollars in PPP loans using the same technique: Getting multiple loans sent to smaller entities they own.
Paul Kiel and Jack Gillum – Propublica
The Paycheck Protection Program was launched to rescue the little guy, the millions of small businesses without the deep pockets needed to survive the COVID-19 shock.
/bit.ly/3gVgWDE

Republican Tests Positive for COVID, Becomes 9th Confirmed or Presumed Case in Congress
Emily Czachor – Newsweek
Virginia Rep. Morgan Griffith tested positive for the novel coronavirus on Tuesday, becoming the ninth congressional member with either a lab-confirmed or presumed case of the respiratory infection.
/bit.ly/3j4vO4p

If you aren’t filled with rage at Trump, you aren’t paying attention
Paul Waldman – Washington Post
Let me take you for a moment to a fantasy land. In this place, the coronavirus pandemic was bad for a couple of months but now it is largely under control. If you lived there you’d still be a little uncertain about going to a concert or a movie, but your life would have largely returned to normal.
/wapo.st/2C6vB0e

HHS confirms coronavirus hospital data will now be sent to DC instead of CDC
Jim Acosta and Devan Cole, CNN
Washington (CNN)Hospital data on coronavirus patients will now be rerouted to the Trump administration instead of first being sent to the US Centers for Disease Control and Prevention, the Department of Health and Human Services confirmed to CNN on Tuesday.
/cnn.it/2C6uHRo

Mnuchin’s Bailout Mistakes Keep Multiplying; The Treasury secretary doesn’t seem to care about transparency, oversight and how many paychecks the Paycheck Protection Program protected.
Timothy L. O’Brien – Bloomberg
Email
“I guess I should take that as a compliment that I look like a villain in a great, successful James Bond movie. … I was very excited of having my signature on the money. It’s obviously a great privilege and a great honor and something I’m very proud of, being the secretary, and look forward to helping the American people.” — Treasury Secretary Steven Mnuchin, 2017
When Team Trump took the reins in Washington three years ago, it promised to bring managerial prowess and private-sector know-how to a federal bureaucracy it repeatedly derided as inefficient and inept.
/bloom.bg/2DESI25

Trump administration drops restrictions on online-only instruction for foreign students
Priscilla Alvarez byline
Priscilla Alvarez, CNN
The Trump administration has rescinded its policy that would bar international students who only take online courses from staying in the US, a federal judge announced Tuesday in Boston.
/cnn.it/2DDZ9T6

****Reality set in and they corrected a wrong decision.~JJL

A $2 Trillion Rescue Leaves America’s Black Neighborhoods Behind; On Cleveland’s East Side, a pastor finds “all the doors are shut.”
Shawn Donnan – Bloomberg
Everywhere Miriam Scott looks, she sees an unrelenting crisis closing in on her church and her flock. On a Saturday in June, her First Love Outreach Ministries handed out more than 20,000 pounds of food, just shy of what it would typically distribute in an entire year. She’s counseled members of her congregation in Cleveland’s impoverished East Side whose relatives have been struck down by Covid-19 and those who’ve lost jobs and are struggling to pay rent. She’s worried she’s falling out of touch with the parade of vulnerable men who head straight from prison to the homeless shelter and used to fill her pews for Sunday services now held on Facebook. She’s not quite sure how she’s going to pay for the new boiler and roof her church needs. Or the past-due electric bill. Every time she flicks the light switch, she does so with a little prayer that there will be light.
/bloom.bg/2Wm6g9m

Trump Ends Hong Kong’s Special Status With U.S. to Punish China
Jordan Fabian and Iain Marlow – Bloomberg
Trump signs bill to sanction Chinese officials over Hong Kong; China vows to sanction U.S. officials, gives no other details
Donald Trump ordered an end to Hong Kong’s special status with the U.S. and signed legislation that would sanction Chinese officials responsible for cracking down on political dissent in the city, drawing a rebuke from China and adding fresh uncertainty for businesses including banks in the financial hub.
/bloom.bg/2Wog6Ya

Regulation

SEC Issues $3.8 Million Whistleblower Award
SEC
The Securities and Exchange Commission today announced a $3.8 million award to a whistleblower who provided significant information that helped the SEC disrupt an ongoing fraudulent scheme. The resulting enforcement action returned millions of dollars to harmed investors.
/bit.ly/2WmbvWA

SEC Charges Wind Turbine Company and Individuals With Defrauding Investors
SEC
The Securities and Exchange Commission today announced charges against Thunderbird Power Corp., an Arizona-based company claiming to be developing a wind turbine technology, and three individuals for defrauding investors out of more than $1.9 million in the unregistered offer and sale of Thunderbird stock.
/bit.ly/2DNtRcN

CFTC’s Technology Advisory Committee Releases Agenda for Upcoming Public Meeting
CFTC
The Commodity Futures Trading Commission today released the agenda for the upcoming Technology Advisory Committee (TAC) public meeting that will be held via phone conference July 16, 2020 at 10:00 a.m. CFTC Commissioner Brian Quintenz is the sponsor of the TAC. [See CFTC Press Release No. 8189-20]
/bit.ly/2WmdgTy

EU to Probe German Watchdogs’ Handling of Wirecard More Closely
Nicholas Comfort – Bloomberg
The European Union’s top markets cop will take a closer look at how German regulators handled oversight of Wirecard AG, the payments company whose collapse rattled financial markets.
/bloom.bg/2WkJLBN

Deutsche Bank CFO Has One More Item on Wish List for Regulators
Nicholas Comfort – Bloomberg
Deutsche Bank AG praised regulators for rushing to help Europe’s lenders in the pandemic, but said there was one thing on its wish list that didn’t make the cut: suspending contributions to region’s fund for winding down failed banks.
/bloom.bg/32iVsMS

US regulator investigates oil fund disclosures; Chairman of CFTC wants to move beyond Dodd-Frank to focus on more recent market issues
Kadhim Shubber- FT
The US Commodity Futures Trading Commission is examining disclosures by managers of commodity funds that are popular with retail investors, the chairman of the derivatives regulator told the Financial Times, the latest sign of scrutiny for a sector shaken by the oil price crash this year.
/on.ft.com/32k3jd3

ESMA to assess German financial reporting system following Wirecard collapse
ESMA
The European Securities and Markets Authority (ESMA) is to launch an assessment of the supervisory response in the financial reporting area by BaFin and the Financial Reporting Enforcement Panel (FREP) to the events leading to the collapse of Wirecard AG. It will be completed by 30 October 2020.
/bit.ly/3gYyv5V

ESMA promotes consistent application of prospectus disclosure requirements
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published today its final Guidelines on disclosure requirements under the Prospectus Regulation.
/bit.ly/2Woc6XJ

Investing and Trading

‘I can’t keep doing this’: Small-business owners are giving up.
Emily Flitter – NY Times
It was harrowing enough for small businesses — the bars, dental care practices, small law firms, day care centers and other storefronts that dot the streets of every American town and city — to have to shut down after state officials imposed lockdowns in March to contain the pandemic.
/nyti.ms/2DLk2vN

Tesla Is No Berkshire, but Mom and Pop Might Buy Anyway; Companies joining or departing the S&P 500 tend to rise and fall before the fact, costing index-fund investors. Now Tesla threatens to make a real dent.
Spencer Jakab – WSJ
The tortoise eventually beats the hare in the stock market. The wealthiest investors are those who regularly put money into low-cost index funds such as those popularized by Vanguard Group and ignore the shiny, new thing—the polar opposite of the Robinhood crowd. The fast-money poor could soon pick the pockets of the patient rich, though.
/on.wsj.com/305BwdC

Federal Reserve’s $3 trillion virus rescue inflates market bubbles
Kate Duguid – Reuters
The Federal Reserve’s $3 trillion bid to stave off an economic crisis in the wake of the coronavirus outbreak is fuelling excesses across U.S. capital markets.
/reut.rs/32i0wkM

Father of the Z-Score Predicts a Surge in ‘Mega’ Bankruptcies
Denise Wee – Bloomberg
Companies seem to be exploiting market rebound, Altman says; Global corporate defaults on track to exceed 2009: Fitch
The New York University professor who developed one of the best-known formulas for predicting corporate bankruptcies has a warning for U.S. credit investors: this year’s spate of “mega” insolvencies is just getting started.
/bloom.bg/32h0jhP

‘Wow’: Tesla’s share price rise stuns Musk and his fans; Electric carmaker has added 1.2 Toyotas, or 27.5 Renaults, in market cap this year
Richard Waters, Brooke Fox and Camilla Hodgson- FT
Elon Musk summed up his reaction to Wall Street’s latest bout of euphoria over his electric car company in one word this week: “Wow.”
/on.ft.com/2Ch0Jdc

A brief history of time for investors; Choose companies that stick to what they are good at and make sure you understand how much debt they are carrying
Simon Edelsten – FT
Albert Einstein allegedly described compound interest as the eighth wonder of the world. “He who understands it earns it; he who doesn’t pays it,” he reportedly said. Who needs unified field theory?
/on.ft.com/3j3ko0V

New ETF launches show resilience in face of pandemic; Analysts disagree over whether sector is due for a setback as Covid-19 effects are felt more deeply
Steve Johnson – FT
Covid-19 has paralysed business activity across the globe, but the ETF industry appears to be made of sterner stuff. The pandemic has, so far at least, had a limited impact on the pace of listings of shiny new exchange traded funds.
/on.ft.com/3h69GFf

Environmental, Social and Corporate Governance

Going ‘Deep Green,’ Office Buildings Give Back to the Planet; As technology costs have declined, more developers are creating buildings that can benefit the Earth by tackling pollution and save money by producing their own power.
Jane Margolies – NY Times
For a couple of decades, many in the real estate industry have been trying to make buildings “green,” replacing conventionally made materials with sustainable ones and installing energy-efficient systems. Buildings have a heavy environmental footprint, so the upshot of all this tinkering has been structures that are less harmful to the planet.
/nyti.ms/2WmNNJF

Brazil Central Bank Director Says Environment Key for Investment
Mario Sergio Lima – Bloomberg
Investors demand transparency on climate issues, Nechio says; Central bank making efforts to support green investment
Brazil must come up with a clear strategy to prevent environmental crimes in the Amazon or risk losing international investments, according to a central bank director. The warning by Fernanda Nechio, the central bank’s director for international affairs, comes on the heels of a call for action on the environment made by international fund managers who oversee about $3.7 trillion in assets. In a letter sent to the government last month, they said Brazil’s failure to protect its forests could force them to reconsider investments in the country.
/bloom.bg/32iGruu

Barclays Targeted by Fresh Climate Protests Over Coal Support
Suzy Waite and Alastair Marsh – Bloomberg
Climate activists have taken aim again at Barclays Plc for its support of the coal industry. Protesters gathered outside the bank’s Piccadilly Circus branch in London on Wednesday, holding replica smokestacks and dressed in suits with hard hats, with signs that criticized Barclays as the “U.K.’s Number 1 Coal Bank.”
/bloom.bg/3j5lKIB

Low-Methane Meat Has Finally Arrived; But it’s only a stop-gap. The best way to reduce Big Meat’s global warming problem is to stop eating meat.
Emily Chasan – Bloomberg
Low-methane meat is a thing now. Earlier this week, fast-food chain Burger King unveiled a climate-friendly burger it plans to offer in some U.S. locations. The limited-supply meat comes from cows that are fed lemongrass to reduce the atmospheric impact of their methane-laden belches.
/bloom.bg/3gTEdpE

BNP Paribas Starts a Fund to Bet Against Polluters
Lucca De Paoli and Nishant Kumar – Bloomberg
Fund will bet against firm failing to shift to sustainability; BNP managers Fugmann, Lees to start with $50 million of assets
A BNP Paribas SA fund has gained 35% this year by wagering on winners in the renewable energy industry. Now its managers plan to bet against the losers.
/bloom.bg/30bvs3r

How oil majors bought into green energy; A tipping point has been reached as investment in renewables technology gathers pace
Nick Butler – FT
This year will be remembered as the point when the long-anticipated energy transition to a low-carbon future moved unequivocally from being a topic of debate to a shift of substance.
/on.ft.com/2DLwFqH

Investors pull green levers to reshape energy sector; Selective stockpicking, boycotts and engagement are all methods gaining ground among environmental stakeholders
Alice Ross – FT
Investing in energy is not what it was. Oil and gas companies like BP and Royal Dutch Shell were traditionally reliable dividend payers, the stalwart of any respectable income investor’s portfolio.
/on.ft.com/3j5ZWwn

Institutions

Citigroup reports a 73 percent drop in quarterly profit.
Gillian Friedman – NY Times
Citigroup said Tuesday that its quarterly profit fell 73 percent as it set aside $5.6 billion to cover future loan losses triggered by the widespread unemployment caused by the pandemic.
/nyti.ms/2DE4v0E

Wells Fargo reports first quarterly loss in more than a decade.
Stacy Cowley – NY Times
Wells Fargo on Tuesday reported its first quarterly loss since 2008, losing $2.4 billion as the pandemic’s economic shocks ravaged nearly every line of its business.
/nyti.ms/3h4Y4lV

Pandemic preparations cut JPMorgan’s second quarter earnings in half.
Emily Flitter – NY Times
JPMorgan Chase on Tuesday revealed that it had earned $4.7 billion during the months of April, May and June, just under half of what it earned during the same period a year ago, as it diverted billions of dollars to a reserve fund in order to prepare for a potential economic shock.
/nyti.ms/32gPI6x

Goldman Traders’ Best Result in Years Spurs Surprise Profit Gain
Sridhar Natarajan – Bloomberg
Trading revenue almost doubles, surging past analyst estimates; Underwriting fees hit a record as debt markets open up
Goldman Sachs Group Inc. made the most of a historic market rebound in the second quarter as the Federal Reserve’s stimulus efforts handed a bonanza to Wall Street trading desks. Revenue from trading stocks and bonds surged 93%, surpassing what analysts had expected by about $2.5 billion and mirroring similar gains reported Tuesday by JPMorgan Chase & Co. and Citigroup Inc. The bank also raked in record fees from helping companies raise cash needed to weather the coronavirus pandemic.
/bloom.bg/305H9Zi

Goldman Sachs profits bolstered by bond trading boom; Surge in revenues tempered by rise in loan loss provisions and litigation charge
Laura Noonan – FT
Goldman Sachs defied the coronavirus crisis to earn as much in the second quarter of 2020 as it did a year earlier after a bonanza in bond trading offset a surge in loan loss provisions and another round of legal charges.
/on.ft.com/30dPGJL

Regions

Russia’s rookie investors fuel stock market trading boom; Rate cuts and savings tax raid prompt millions to pour cash into shares and bonds
Henry Foy and Max Seddon – FT
Millions of Russians are pushing their savings into local stocks and bonds, helping to steady a market that has long been at the mercy of swings in sentiment among foreign investors. A campaign of rate cuts by the central bank has pulled the country’s benchmark interest rate down from 17 per cent five years ago to 4.5 per cent last month — a post-Soviet low that dents the appeal of savings. On top of that, president Vladimir Putin announced a 13 per cent tax on interest from all bank deposits over 1m roubles ($14,000) in March, to help fund the state’s response to coronavirus.
/on.ft.com/2Wm9V7g

Saudi bourse unveils derivatives product to lure foreign investors; Launch is part of financial sector reforms under the banner of Saudi Vision 2030
Ahmed Al Omran – FT
The Saudi Stock Exchange has announced that trading in its first exchange-traded derivatives product will start at the end of next month, as the kingdom seeks to draw more foreign investors into its capital markets.
/on.ft.com/30aWeJb

New ETF listings offer “building blocks” for Kiwi investors
Press Release
15 July 2020 – The listing today of four new Exchange Traded Funds (ETFs) on the New Zealand sharemarket will broaden investment options for Kiwis, and reflects the rising global popularity of index-tracking funds.
NZX Chief Executive, Mark Peterson, said the Smartshares Core Series will add depth and breadth to the choices for local investors on their local market – further driving the growth of ETFs in New Zealand, which has jumped 243% in terms of the total value of trades in the first half of 2020.

Brexit

Goldman, Nomura Send About 10% of Staff Back to London Offices
Viren Vaghela – Bloomberg
Finance workers cautious even as Boris Johnson urges return; JPMorgan’s M&A bankers said to have trickled back this week
Goldman Sachs Group Inc. and Nomura Holdings Inc. are sending about 10% of their London staff back to the office as the U.K. government urges firms to repopulate the City financial district.
/bloom.bg/3fwFLWl

Britain’s Brexit boosterism masks slow progress in talks with EU; Lack of trust between Brussels and London is a barrier to a breakthrough
Martin Sandbu – FT
Boris Johnson’s government this week indulged in some trademark boosterism about the UK’s post-Brexit future. In addition to an upbeat advertising campaign urging people to prepare for exciting new opportunities (including extra red tape to trade with the continent and the need to buy health insurance to travel there), ministers set out new immigration and border rules for when standstill arrangements with the EU expire at the end of 2020.
/on.ft.com/30gFD73

Brexit was meant to make Britain global. It has made us friendless
Rafael Behr – The Guardian
It is not a secret that Britain is leaving the EU. The coronavirus crisis has dominated 2020 but not obliterated memory of the years before. Still, to be on the safe side, the government is spending £93m on a Brexit refresher campaign with the slogan “check, change, go”. This is aimed at people who have dealings with Europe and might be under the illusion that it will be as easy in the future as it has been in the past. No one has done more to cultivate that misapprehension than Boris Johnson. The government’s new message on Brexit is to disregard what the prime minister used to say on the subject.
/bit.ly/3ev3fKe

Irish deputy PM sees Brexit deal but maybe not until December
Conor Humphries – Reuters
Britain is likely to agree a new trade deal with the European Union but agreement could come as late as December, just weeks before its EU exit transition ends, Ireland’s deputy prime minister Leo Varadkar said on Tuesday.
/reut.rs/2Opjgqb

Miscellaneous

Vox Media Prepares to Lay Off Some Furloughed Employees; Media company’s lucrative events business has been hit hard by the coronavirus pandemic
Lukas I. Alpert – WSJ
Vox Media, the publisher of New York magazine, the Verge and SB Nation, is preparing for a round of layoffs as its financial situation continues to suffer from the economic effects of the coronavirus pandemic, people familiar with the matter said.
/on.wsj.com/30eZkvM

Disney Parks Are Practically Empty and That Seems to Be the Idea
Christopher Palmeri – Bloomberg
The wait times are five minutes or less on many rides; ‘It seems to be slow by design,’ amusement-park tracker says
Walt Disney Co.’s just-opened theme parks in Florida are so deserted that visitors are waiting five minutes or less to get on many rides — an eerie experience for people accustomed to long lines.
/bloom.bg/2DERdkt

Hazmat Suits for Air Travel Are Here; They may be completely brilliant. Or they may be too good to be true.
Jen Murphy – Bloomberg
After the Centers for Disease Control and Prevention officially recommended widespread use of face masks to help slow the spread of the Covid-19 coronavirus, the minimalist medical mask quickly got reimagined as a fashion accessory. Then model Naomi Campbell—a famous germaphobe—and musician Erykah Badu stepped it up a notch, sporting custom hazmat suits for stylish social distancing. Now, with the novel coronavirus pandemic showing no sign of slowing, travelers are taking note.
/bloom.bg/3j4yRtx

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