Coronavirus Pandemic Likely to Last Two Years, Report Says; The Pandemic’s Long-Term Pain Is Just Becoming Clear to Markets

May 1, 2020

First Read

Viewpoint: Community in a time of need
By Walt Lukken – FIA

Greetings from my home office/laundry room on Capitol Hill in Washington DC. The laundry is clean and put away! And thanks for all who posted photos of your home offices.

Last week FIA again took the extraordinary step of canceling upcoming conferences to protect the health and safety of our attendees due to the Coronavirus outbreak. The growing list of canceled FIA events, which began with our Boca flagship conference in March, now includes FIA’s IDX conference in London, Law and Compliance conference in Washington D.C., and the U.S. Commodities Forum in Houston.

I call this announcement ‘extraordinary’ because it is unprecedented, but truthfully these cancellations come as no surprise to anyone. The fact that these decisions were anticipated does not lessen the feelings of sadness and loss.

Each of us are experiencing loss and sacrifice in our daily lives due to the breadth of this crisis. First and foremost, our hearts go out to those who grieve for loved ones who have died from the Coronavirus. Theirs is the deepest.

Loss is also felt by our healthcare workers and first responders, who not only have to muster the courage to treat infected patients but do so at the expense of losing contact with their families to avoid contagion. This is an incredible sacrifice.

For the rest of this Viewpoint, click HERE

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Hits & Takes
By JLN Staff

The target date for returning to work keeps changing, depending on where you live. Some states in the U.S. say go back to work today, in modified ways. On the other hand, Amazon told employees to stay home until October 2.

Just like in trading, I recommend people to think for themselves. John Lothian & Company, Inc. will be continuing to work from home through the end of May, as things stand.

Today’s lead story says the pandemic will last for two years, which is only six months longer than my first expectations. Bill Gates says there is a chance we could have a vaccine in 9 months, but it could take some time after that to vaccinate everyone.

So we are somewhere between nine months and two years to get back to open businesses, which makes Amazon’s October 2 date not look that radical.

Head of DTCC Solutions and Chief Client Officer at DTCC Tim Keady has a commentary exclusive to JLN titled “Automation is Key to Managing Margin Calls.”

FIA President and CEO Walt Lukken talked with IOSCO Secretary General Paul Andrews on the response to #covid19, its busy standard setting agenda and of course Madrid tapas as part of his podcast series “FIA Speaks.”

Have a safe weekend!~JJL

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Automation is Key to Managing Margin Calls
Tim Keady, Managing Director, Head of DTCC Solutions and Chief Client Officer at DTCC
Since the start of the coronavirus-induced market volatility, margin calls have been a frequent headline in the news. After all, the global grab for liquidity has set off a chain reaction of asset sales, unwinding trades, and margin calls. These extraordinary conditions have in some ways created a perfect storm, and at its eye, we see a critical problem that is straining trading operations and infrastructure around the world, particularly for buy-side firms: the lack of automation in collateral processing workflows.
/jlne.ws/2Wf09mu

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Cboe Global Markets Reports Record Results for First Quarter 2020
Cboe Global Markets
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the first quarter of 2020. “The first quarter 2020 was defined by tremendous market uncertainty fueled by the COVID-19 pandemic. We took swift action to protect the health of our associates and trading floor community, while maintaining orderly markets to serve our customers and the investing public. As we’ve seen in the past, market participants leveraged the utility of our proprietary products, which neared record trading levels for the quarter, to navigate the market turbulence,” said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer.
/jlne.ws/2SpCAGm

*****Just wait until Cboe gets into the Old Post Office building in Chicago for their new headquarters and can work together again. Then they will really be posting and delivering some results.~JJL

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Lockdown has brought the digital future forward — but will we slip back? Tech groups could only have dreamt of the behavioural changes wrought by enforced staying home
Richard Waters – FT
To many observers of the tech world, the main highlights of the lockdown of 2020 have been the Zoom Boom and the great Netflix veg-out. The large numbers of people crowding on to video calls or slumped in front of streaming TV have become the symbol of a new digital dependence.
/jlne.ws/2YrLS8z

****There are lots of examples where forced adoption will make it harder to go back to the old ways we did things. Why have a phone call when you can get all your grandkids all over the country on a Zoom call? Why send an option order to the trading floor when there is an algo that will work your order better?~JJL

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The Business of Burps: Scientists Smell Profit in Cow Emissions; Cattle produce more methane than many large countries. A solution could be an ecological and financial breakthrough — and a Swiss biotech company may be on the cusp.
Adam Satariano – NY Times
Peaches, a brown-and-white Jersey cow weighing 1,200 pounds, was amiably following Edward Towers through a barn on a sunny March morning when the 6-year-old dug in her front hooves.
/jlne.ws/2Yndhsh

*****Can’t wait for the book “Burps, Belches and other Funny Cow Gas Expressions.”~JJL

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CryptoMarketsWiki Coin of the Week: Stellar Lumens (XLM)
The Stellar Foundation announced this week that XLM transactions will now be monitored by Elliptic, a blockchain analytics and data company, in an attempt to improve its KYC/AML practices.
/jlne.ws/2Sot2eT

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Thursday’s Top Three
Our top story Thursday was the ICE press release Intercontinental Exchange Commits $10 Million to Support COVID-19 Response Efforts Around the World. Second was NYSE to reopen San Francisco-based options floor next Monday, from Reuters. Third was Private Membership Clubs Still Collect Dues, Despite Closures, from Bloomberg.

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Lead Stories

Coronavirus Pandemic Likely to Last Two Years, Report Says
John Lauerman – Bloomberg
The coronavirus pandemic is likely to last as long as two years and won’t be controlled until about two-thirds of the world’s population is immune, a group of experts said in a report.
/jlne.ws/3f52qcq

The Pandemic’s Long-Term Pain Is Just Becoming Clear to Markets
Chris Anstey – Bloomberg
The best month for global equities in almost a decade may be enough to convince investors the light at the end of the coronavirus tunnel isn’t a train, but the debate on what comes next is only just beginning as they adjust their focus to a financial landscape utterly changed by the pandemic. An indisputable takeaway from the crisis is a massive expansion in global debt — given the more than $8 trillion in fiscal measures worldwide, according to a Bloomberg compilation. Corporate balance sheets will have changed, as CFOs seek to bolster their capital through equity and debt raisings. Millions will have lost their jobs at least for a time, and labor mobility between nations may be impaired. And supply lines will be reshaped, at least in some fashion.
/jlne.ws/2zGlWM2

Negative Oil Scars Will Linger for Frackers
Liam Denning – Bloomberg
April 20 didn’t start like any other day — there’s a pandemic going on — and for oil, it sure didn’t end like one either. That afternoon, the May contract for West Texas Intermediate crude settled in negative territory for the first time ever. Now we all know it was a technical, contract-rolling, Chinese-speculators-getting-eviscerated affair. After all, oil and gas producer stocks closed up that day.
/jlne.ws/2KSgc49

NYSE-owner ICE makes case for trading floor as profits rise
John McCrank, Noor Zainab Hussain – Reuters
New York Stock Exchange-owner Intercontinental Exchange Inc (ICE.N) on Thursday reported first-quarter profits that beat analysts’ expectations, helped by a surge in trading volumes as investors reacted to developments in the coronavirus pandemic.
/jlne.ws/2zPfNxl

Oil traders turn to salt caves and train cars in storage crisis; Crash into negative prices jolts producers into cutting back
David Sheppard and Neil Hume – FT
From salt caverns in Sweden to train cars in Chicago, oil traders spent the past two months stuffing unwanted crude into any available space after demand collapsed in the face of the coronavirus pandemic.
/jlne.ws/2SrQZll

MTS launches electronic trading platform for unsecured money markets in Europe; New platform from MTS aims to facilitate the need for more technology solutions in the unsecured money markets.
Kiays Khalil – The Trade
The London Stock Exchange Group’s MTS has launched an electronic unsecured money market trading platform, with the first trades already executed and settled between two Italian banks
/jlne.ws/2Yplw7o

Why the coronavirus crisis won’t mark a peak in oil demand; Transport demand will rebound while the pandemic will reboot the use of plastics
Cuneyt Kazokoglu – FT
The coronavirus crisis has thrown the oil market out of balance and like other forecasters, we expect an unprecedented contraction in oil demand this year.
/jlne.ws/2SpLRhQ

EU Court Backs Italian Transaction Tax in SocGen Dispute
Bloomberg
EU nations can make foreign firms pay transactions taxes on derivatives trades when the underlying securities are based in their territory, the bloc’s top court says.
/jlne.ws/2zRaTA1

Some traders are already excited about this year’s bonuses
Sarah Butcher – eFinancialCareers.com
It’s early in the year to be thinking about your bonus, but given there probably won’t be much in the way of summer holidays in 2020 and people like to have something to look foward to, thoughts are already straying in that direction. Curtail them if possible.
/jlne.ws/3d9VMj9

NYSE Goes All Electronic – What Does It Mean?
SIFMA
We are in unprecedented times. The emergence of the global pandemic COVID-19 in the first quarter of 2020 caused severe economic and capital markets shocks. This turmoil was evidenced by sharp price declines – yet spikes in volumes – in equities markets, which closed the first quarter with their worst performance since the financial crisis. The ultimate symbol of these unprecedented times is the closing of the floor of the New York Stock Exchange (NYSE) on March 23, 2020. With the floor closure, market participants are wondering if the NYSE is losing trading market share of equity volumes.
/jlne.ws/2YqqqRk

Miscellaneous

Vaccines for 300 Million People This Year: The Impossible Dream?
Riley Griffin – Bloomberg
J&J gearing up manufacturing for 2021, Trump eyeing this year; ‘Sheer amount of risk’ calls for government-industry tie-up
The race is on to be the first developer of a coronavirus vaccine, with global drugmakers and the White House seeking to compress into just months a process that normally takes several years. Whether it can happen remains an enigma.
/jlne.ws/2zGnrKa

Europe Prepares for Slow Return to Business as Virus Passes Peak
Arne Delfs, Alessandra Migliaccio, and Tim Ross – Bloomberg
Italy eases lockdown Monday, Germany reopens public spaces; Europe eager to end confinement after record economic downturn
Europe, which has recorded more than 100,000 deaths from the coronavirus outbreak, is preparing for a gradual return to business, although leaders remain nervous about a resurgence. Italy will start easing its two-month lockdown on Monday, while Germany is reopening playgrounds, zoos, museums and churches. In the U.K., Prime Minister Boris Johnson said the country has now passed the peak of the outbreak and pledged a “comprehensive plan” to lift the lockdown. France is gearing up for a gradual easing of restrictions starting May 11.
/jlne.ws/3bUl0SD

Coronavirus Is Killing More People in Poorest Parts of U.K.
Neil Callanan – Bloomberg
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 coronavirus is killing people in the poorest parts of the U.K. at more than twice the rate as elsewhere, according to data compiled by the Office for National Statistics.
/jlne.ws/2yiblGL

Bill Gates Says Virus Vaccine Could Take as Little as 9 Months
Nathan Crooks – Bloomberg
Bill Gates, whose foundation is focusing its efforts to fight the coronavirus, doesn’t think life will return to normal until there’s a viable vaccine that can stop its spread. The good news is that it may take less time than many have been predicting.
/jlne.ws/2YnlOvl

Exchanges, OTC and Clearing

How to IPO During Coronavirus: This Executive Helps From His Kitchen Counter; Nasdaq’s Jay Heller works on getting companies to go public, a process gone remote during the pandemic without in-person roadshows or bell-ringing ceremonies; ‘my commute is a lot better’
Corrie Driebusch – WSJ
Jay Heller, the Nasdaq Inc. NDAQ -1.73% executive who helps companies go public, is usually surrounded by hundreds of celebrating bankers, employees and their family members in the middle of Times Square when a firm starts trading. Yet last week, when Oric Pharmaceuticals Inc. went public, Mr. Heller helped the company’s stock open for trading without a hitch from his kitchen counter in Old Bridge, N.J. His Persian cat, Barley, was his main audience.
/jlne.ws/2VTIQsf

Trading Overview in April 2020; Japan Exchange Group released Trading Overview in April 2020
JPX
Cash Equity Market – In April 2020, the daily average trading value for the TSE 1st Section (domestic common stocks) was JPY 2.6294 trillion.
Derivatives Market – In April 2020, total derivatives trading volume was 34,926,471 contracts, which were the second highest number for April.
– Total derivatives trading value was JPY 150 trillion, and the trading value for equity index derivatives was JPY 113 trillion, which were the highest number for April.
/jlne.ws/2SpgWSq

Notice on Name Change of Nikkei-TOCOM Commodity Index
JPX
Nikkei Inc. (Nikkei), Japan Exchange Group, Inc. (JPX), Osaka Exchange, Inc. (OSE) and Tokyo Commodity Exchange, Inc. (TOCOM) (JPX, OSE and TOCOM collectively referred to as “JPX Group”) will change the name of the Nikkei-TOCOM Commodity Index to “Nikkei-JPX Commodity Index” effective on July 27, 2020.
/jlne.ws/3fbNKbm

MTS Launches New Unsecured Money Market Market Trading Platform
London Stock Exchange Group
MTS launches new unsecured money market trading platform, MTS Depo; Electronic unsecured money market trading now available for dealers across Europe on the same platform as MTS Repo; First trade executed and settled between two Italian banks
Launch reflects growing demand for electronic trading in unsecured money markets across Europe
MTS, part of London Stock Exchange Group, has launched MTS Depo, a new electronic multilateral exchange system for European unsecured money market trading denominated in Euros. Trading has already begun with an overnight transaction executed between two Italian banks.
/jlne.ws/2WhwlWk

Intercontinental Exchange Approves Second Quarter Dividend of $0.30 per Share
Intercontinental Exchange
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 second quarter of 2020, which is up 9% from the $0.275 per share dividend paid in the second quarter of 2019. The cash dividend is payable on June 30, 2020 to stockholders of record as of June 16, 2020. The ex-dividend date is June 15, 2020.
/jlne.ws/2y7vU96

Intercontinental Exchange Reports Record First Quarter 2020
Intercontinental Exchange
/jlne.ws/2SoVm0E

MarketAxess reveals record number of buy-side acted as liquidity providers in COVID-19 crisis; The first quarter this year has proved important in advancing all-to-all trading, according to MarketAxess chief executive, Rick McVey.
Hayley McDowell – The Trade
A record number of asset managers acted as liquidity providers on the MarketAxess Open Trading platform at the height of the COVID-19 crisis, which chief executive Rick McVey described as an important development for all-to-all trading.
/jlne.ws/2zOIIl5

Euro Clearing in Frankfurt – continued progress amid difficult conditions
Matthias Graulich – Eurex Clearing
The world has changed a great deal since my last update, in January, on our Euro Clearing initiative at Eurex. Of course, the last month or so has been exceptionally difficult for many of us – both in the financial services sector and beyond – and I hope that you and your families are all well. Circumstances have been exceptional over recent weeks – working from home these days is the norm rather than the exception, volatility has been extremely high, and Central Banks and politicians have initiated many deals to support troubled businesses.
/jlne.ws/3d3d3L0

New Data Confirms Stocks Trade Better on the NYSE
NYSE
The New York Stock Exchange is the world’s premier equity trading platform. Against both volatile and stable backdrops, data shows that stocks trade better on the NYSE. Our analysis demonstrates that even during the NYSE’s temporary Trading Floor closure, issuers and investors can rely on the innovation, stability and price discovery process of our platform.
/jlne.ws/2Wf1mtX

Fintech

Chime: Coronavirus and stimulus checks amid major growth for fintech
Callum Burroughs – Business Insider
The rapid emergence of tech-led alternatives to traditional banking in recent years has been, in part, an attempt to use digital tools to provide better customer engagement and service.
Putting the customer first is the key pillar for fintech challenger bank Chime. Founded in 2013, the startup has grown to more than eight million customers in the US as it looks to disrupt “broken” American banking. It’s part of a broader reassessment of how people use financial services, as many are forced online by government lockdowns.
/jlne.ws/2KMekdo

BMLL to deliver metrics through Derived Data desktop application on OpenFin; OpenFin and BMLL have teamed up to build a Derived Data desktop application through the OpenFin’s operating system.
Kiays Khalil – The Trade
BMLL Technologies has said it will build a Derived Data desktop application on the OpenFin’s operating system under a new partnership. The data engineering and analytics firm has teamed up with the operating system for finance, OpenFin, to create and deliver a Derived Data desktop application to buy-side clients. The companies expect the desktop app to be available by the second quarter this year.
/jlne.ws/2y5Wz69

INDATA Architect secures new buy-side client for its AI OMS; ATLAS Infrastructure goes live with INDATA Architect AI OMS, recently launched to help investment firms aggregate data for business intelligence reporting.
Kiays Khalil – The Trade
ATLAS Infrastructure, a long-only equities fund manager specialising in global listed infrastructure, has gone live with INDATA Architect’s AI OMS for automated trading, compliance and reporting functions.
/jlne.ws/2Wi9euC

Cryptocurrencies

Crypto Exchanges Boost Hiring in Wake of Coronavirus Crash
Olga Kharif – Bloomberg
Binance, Kraken, Coinbase add staff while jobless claims soar; Bitcoin halving and the Covid-19 epidemic are fueling interest
As speculation abounds around whether Bitcoin is poised for another bull run, a slew of crypto exchanges are embarking on hiring sprees while job losses are soaring.
/jlne.ws/3f92DLS

Andreessen Horowitz just closed its second crypto fund
Connie Loizos – Tech Crunch
Two years ago, the venture firm Andreessen Horowitz (a16z) took the wraps off a dedicated crypto fund from a subset of its limited partners who provided the firm with $300 million in capital commitments. Now, the firm says it has closed a second fund in the same vein, this time with $515 million in capital commitments.
/jlne.ws/35mIeyd

Crypto Leaders on COVID-19: Join us for a Free Live Webinar Monday, May 4th
Rachel McIntosh – Finance Magnates
The coronavirus has had a major impact on just about every aspect of our lives; the cryptocurrency industry has been no exception. Businesses around the globe have been forced to embrace remote work amid an ongoing pandemic of Covid-19: staying connected is now more important than ever.
/jlne.ws/3f5kNxU

The ‘Great Lockdown’ Is Boosting Demand for Bitcoin Custody Solutions
Leigh Cuen – Coindesk
Thanks in part to the uncertainty of the coronavirus crisis and rising bitcoin prices, bitcoin wallet startups have seen a sudden uptick in activity. For example, over the past two months the Austin, Texas-based bitcoin startup Unchained Capital, with over $50 million in assets under management and $150 million worth of bitcoin transactions processed, garnered several dozen new institutional clients, representing hundreds of individuals. Will Cole, Unchained’s chief product officer, said the custody product Vault saw 340% growth in Q1 2020 as compared to the previous quarter.
/jlne.ws/2Ys1hpp

Ripple posts its lowest ever XRP sales in Q1 2020
Yogita Khatri – The Block
Ripple has reported an 87% drop in sales of XRP during the first quarter of 2020, as compared to the previous quarter. The blockchain payments firm sold a total of $1.75 million worth of XRP in Q1, as compared to $13.08 million in Q4 of 2019, according to an announcement on Thursday.
/jlne.ws/2So5jLE

Brave integrates Binance’s crypto widget
Robert Stevens – Decrypt
The world’s biggest cryptocurrency-friendly browser, Brave, today integrated a trading widget that taps into the world’s biggest and — to get the PR chumps back on our side — most noteworthy cryptocurrency exchange, Binance. The widget is the “first exchange-browser integration of its kind,” Brave said in a blog post. It lets Brave users buy, convert and deposit cryptocurrency from Binance, as well as see how much cryptocurrency they have deposited on Binance. Any Americans using the widget must make do with Binance.US.
/jlne.ws/2VSgo9R

Bitcoin Whale Addresses Hit Highest Number Since August 2019
Omkar Godbole – Coindesk
Large crypto investors, popularly known as “whales,” seem to be accumulating bitcoin amid the ongoing price rally. The seven-day moving average of the number of addresses holding 10,000 bitcoins or more rose to 111 on Wednesday, the highest level since Aug. 2, 2019, according to blockchain intelligence firm Glassnode. That number has risen by more than 11% since early March.
/jlne.ws/2zOdTgo

Kraken Expands Trading Pairs to 155 with New Conversions
Aziz Abdel-Qader – Finance Magnates
Kraken, a cryptocurrency exchange operating from the United States, is adding 11 new trading pairs through expanded options for converting ether (ETH), USDT and Pound Sterling (GBP). Prior to today’s move, Kraken users had to convert their crypto holdings into fiat currencies in order to buy another crypto coin. The exchange is finally adding direct cryptocurrency-to-cryptocurrency conversions.
/jlne.ws/3bUAQg3

Stellar (XLM) transactions will now be monitored by Elliptic
Frank Cardona – Decrypt
The Stellar Foundation has partnered with blockchain forensics firm Elliptic. Stellar (XLM) transactions and wallets will be screened for money laundering risks, compliance, sanctions, and more. The move sacrifices privacy, but could be attractive to institutional investors.
/jlne.ws/3aRmYBJ

More than 77% of ETH not locked in smart contracts hasn’t been moved in six months
Yilun Cheng – The Block
More than three-quarters of the ETH in so-called externally owned accounts hasn’t moved in six months, despite wild price swings during that period, according to on-chain market analysis firm Glassnode. Glassnode data shows that investors in ETH are exhibiting strong “HODLing” behaviors, a reference to the term that bitcoin enthusiasts use to describe the act staying invested whether the market goes up, down, or sideways.
/jlne.ws/2KPnUvV

Politics

How should the Fed buy junk bonds?
Robert McCauley – FT
In a move that surprised many, the Federal Reserve announced on April 9 that it would buy junk bonds by purchasing exchange-traded funds (ETFs). This followed the announcement on March 23 that it would underwrite and buy investment grade bonds, directly and through ETFs. On April 9, the Fed also extended the March 23 programmes to bonds that had been investment grade on March 22, but had since been downgraded, so-called fallen angels like Ford.
/jlne.ws/2YnbIdT

Trump’s Latest Attack on Sweden Revives Coronavirus Controversy
Morten Buttler and Nick Rigillo – Bloomberg
Donald Trump’s latest verbal attack on Sweden has reignited a debate on whether the country’s relaxed approach to fighting Covid-19 is madness or genius. The U.S. president, who is facing criticism at home for initially playing down the threat of a pandemic, on Thursday sought to direct attention toward developments in Sweden.
/jlne.ws/2Wg2H3F

Meet the Warren-Supporting Republican Who Could Be Put in Charge of Policing Coronavirus Bailout Funds; Sheila Bair, a lifelong Republican who backed Warren’s presidential run, has emerged as a top candidate to chair the new Congressional Oversight Commission watchdog group, created by the $2.2 trillion CARES Act.
Greg Walters, Daniel Newhauser, and Liz Landers – Vice
A rare GOP ally of Sen. Elizabeth Warren (D-Mass.) is being closely considered for one of the most high-profile and politically explosive jobs of the coronavirus era: Watching over how the federal government distributes trillions in rescue funds.
/jlne.ws/2KNB6RV

Regulation

FCA seeks legal clarity on business interruption insurance alongside package of measures to help consumers and small businesses
UK FCA
The Financial Conduct Authority (FCA) has today announced it intends to seek legal clarity on business interruption (BI) insurance to resolve doubt for businesses who are facing uncertainty on their claims.
/jlne.ws/2Sks5nN

Statement on mortgage prisoners
UK FCA
The FCA has been working for some time to support mortgage prisoners. This work has continued during the disruption caused by coronavirus (Covid-19). So far, our action has resulted in reductions in mortgage payments for the vast majority of mortgage prisoners, by ensuring base rate cuts are passed on where possible.
/jlne.ws/2SqLIdJ

FCA statement – insuring SMEs: business interruption
UK FCA
Today, the FCA is announcing that it intends to obtain a court declaration to resolve contractual uncertainty in business interruption (BI) insurance cover. This is due to continuing and widespread concerns about the lack of clarity and certainty for some customers making business interruption claims, and the basis on which some firms are making decisions in relation to claims.
/jlne.ws/2y7GFbt

FINRA Securities Helpline for Seniors Marks Five-Year Anniversary; FINRA Releases Report Highlighting Helpline’s Efforts and Other FINRA Initiatives to Protect Seniors
FINRA
FINRA today released a new report illustrating the FINRA Securities Helpline for Seniors’ efforts to provide support, resources and education to senior investors over the last five years. The report also provides insight into FINRA’s ongoing work to protect senior investors beyond the Helpline – including rulemaking, disciplinary actions, and collaboration with other regulators and organizations – and shares effective practices from member firm senior investor protection programs.
/jlne.ws/3cZmQlc

Protecting Senior Investors 2015-2020
FINRA
Seniors make up an increasingly large share of the American population1 and hold higher levels of wealth than other generations. These factors, among others, make seniors an attractive target for financial exploitation, with evidence suggesting that such exploitation has been increasing in terms of both scope and magnitude.2 Sadly, while seniors sometimes fall victim to financial exploitation by strangers, they are often exploited by individuals they know and trust, such as family members or caregivers. Senior investors who are isolated or suffering from cognitive decline may be particularly vulnerable to harm.3
/jlne.ws/3d6jQDA

ESMA publishes annual bond transparency calculations, systematic internalisers calculations and new bond liquidity data
ESMA
The European Securities and Markets Authority, the EU’s securities markets regulator, has today made available, under the Markets in Financial Instruments Directive (MiFID II) and Regulation (MiFIR):
/jlne.ws/3cXrctc

U.K. Markets Watchdog Seeks Legal Clarity on Virus Insurance
Benjamin Robertson and Silla Brush – Bloomberg
FCA plans to ask court to help resolve contractual uncertainty; Regulator tells firms to consider if policies offer value
The U.K.’s top markets regulator said it will ask the courts to provide legal clarity on how insurers should handle claims made by companies battered by the coronavirus pandemic.
/jlne.ws/2WhrNiI

Investing and Trading

ConocoPhillips takes axe to production after $1.7bn loss; US oil producer pledges to reduce output by more than a third in June
Derek Brower – FT
ConocoPhillips, the US oil producer, on Thursday announced its second cut to production in less than two weeks with a drop in June output by more than a third — greater than most Opec countries pledged to remove in the cartel’s historic supply deal this month.
/jlne.ws/2ykkizk

How should the Fed buy junk bonds?
Robert McCauley – FT
In a move that surprised many, the Federal Reserve announced on April 9 that it would buy junk bonds by purchasing exchange-traded funds (ETFs). This followed the announcement on March 23 that it would underwrite and buy investment grade bonds, directly and through ETFs. On April 9, the Fed also extended the March 23 programmes to bonds that had been investment grade on March 22, but had since been downgraded, so-called fallen angels like Ford.
/jlne.ws/2YnbIdT

US stock market rally confuses liquidity with solvency; Many zombie companies will fail, no matter how much is sprayed around by the Fed
Gillian Tett – FT
Two contradictory signals have emanated from the US this week. On the one hand, economic news has been dire: gross domestic product shrank by 4.8 per cent in the first quarter and Jay Powell, Federal Reserve chair, warned of “considerable risks to the economic outlook over the medium term”. Oxford Economics now projects a peak-to-trough decline in GDP of 12 per cent in the first half of this year. That is three times worse than during the 2008 financial crisis. Ouch.
/jlne.ws/2Wj2H2H

Fed Faces Risky, Inflationary Divorce From Treasury Post Covid
Rich Miller – Bloomberg
Alliance raises new concern over central bank’s independence; Big budget deficits may cramp its room to raise interest rates
Breaking up is hard to do. The coronavirus has forged a once unlikely alliance between Donald Trump’s Treasury Department and the central bank he often derided. The close embrace is resurfacing concerns about the Fed’s independence in the long run.
/jlne.ws/2YnanUp

Stampede to Buy Euros at End-of-Month Fix Rattles FX Trading
Alyce Andres and Robert Fullem – Bloomberg
Heavy futures volume indicate bearish positions unwound; Lower volatility may have contributed to a jump in volume
Traders rushed to buy euros in a bid to rebalance their portfolios on the last day of the month, prompting a sudden spike in the currency. The euro jumped to a two-week high of $1.0972 versus the dollar around the time of the 4 p.m. London fix on Thursday as demand surged. Nearly $3.7 billion worth of euro futures contracts traded in the half hour preceding the fix, the highest for any comparable period since March 6.
/jlne.ws/35jCRzW

ECB Says Economy Could Stay Below Last Year’s Level Through 2022
Paul Gordon – Bloomberg
Central bank publishes three scenarios for virus impact; Chief economist says second-quarter slump is worse than first
The euro-area economy could shrink as much as 12% this year and fail to return to its pre-coronavirus size until the end of 2022, according to the European Central Bank. In a range of scenarios published on Friday, a day after it announced more measures to help banks fund companies and households, the ECB predicted an uncertain recovery from the crisis. Gross domestic product might rebound by only 4-6% next year.
/jlne.ws/2SrRr2W

U.S. Steel Portends More Blue-Collar Pain With 2,700 Layoffs
Joe Deaux – Bloomberg
Covid-19 forces steelmaker to shut most of its blast furnaces; Notice of potential layoffs sent to as many as 6,500 employees
One of the biggest U.S. steelmakers is signaling how the coronavirus pandemic is set to inflict pain on blue-collar America. U.S. Steel Corp. expects to lay off about 2,700 employees as the virus forces the company to idle most of its blast furnaces. Even before lockdowns hit the economy, producers were facing slowing demand in the manufacturing sector.
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Warren Buffett to Break Silence at Virtual Woodstock for Capitalists
Katherine Chiglinsky – Bloomberg
Billionaire, top deputy to field investors’ questions Saturday; Berkshire watchers expect meeting to take on a different tone
Warren Buffett calls his annual meeting a high point of the year. It’s a time when Berkshire Hathaway Inc. shareholders converge on Nebraska to eat Dairy Queen ice cream, sample See’s Candies and, most importantly, hear the wit and wisdom of one of the world’s most successful investors. The booths offering sweet treats will be missing on Saturday, as will the tens of thousands of attendees. Even the location is being kept under wraps. But Buffett and a top deputy, Greg Abel, will be there, doing their best in a virtual meeting to make sense of an economy upended by the coronavirus pandemic.
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When the Flames Go Out, the Permian’s Methane Problem Worsens
Rachel Adams-Heard and Akshat Rathi – Bloomberg
New data show 1 in 10 flares were unlit or malfunctioning: EDF; Data is based on EDF survey of over 300 sites in the Permian
The orange flames that dot the Permian Basin have sparked criticism from investment bankers and shale pioneers who say the energy industry is wasting a valuable resource by burning off natural gas. Yet the flares are proving a bigger contributor to climate change if they are unlit.
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Institutions

BlackRock hires former McKinsey partner to lead stewardship drive; Sandy Boss joins world’s biggest asset manager as it steps up sustainable investing push
Chris Flood – FT
BlackRock has recruited Sandy Boss, a former McKinsey senior partner, as global head of investment stewardship as the world’s largest asset manager steps up its efforts to promote sustainable investing among clients and investee companies.
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Royal Bank of Scotland Sets Aside $1 Billion For Bad Loans
Stefania Spezzati – Bloomberg
RBS becomes latest lender to take provision during pandemic; Banks may book more charges in case more borrowers struggle
Royal Bank of Scotland Group Plc is the latest bank to book a hefty charge as the coronavirus pandemic hits borrowers’ health and finances.
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Regions

Iran Is Hauling Gold Bars Out of Venezuela’s Almost-Empty Vaults
Patricia Laya and Ben Bartenstein – Bloomberg
The shipments are repaying Iran for help in reviving refinery; The two-long time allies are both targets of U.S. sanctions
Out of cash and desperate for help in propping up its oil industry, Venezuela is raiding its gold vaults and handing tons of bars to its long-time ally Iran, according to people with direct knowledge of the matter. Government officials piled some 9 tons of gold — an amount equal to about $500 million — on Tehran-bound jets this month as payment for Iran’s assistance in reviving Venezuela’s crippled gasoline refineries, the people said. The shipments, which resulted in a sudden drop in Venezuela’s published foreign reserve figures, leave the crisis-ravaged country with just $6.3 billion in hard-currency assets, the lowest amount in three decades.
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U.A.E. Must Do More to Stop Laundering, Watchdog Says
Abeer Abu Omar – Bloomberg
The United Arab Emirates must do more to effectively combat money laundering and terrorist funding, according to the Financial Action Task Force, a Paris-based global watchdog.
/jlne.ws/3aVP3rC

Brexit

British lawyer sues EU over her removal from its court due to Brexit
Owen Bowcott – The Guardian
The UK’s last judicial member of the European court of justice is suing the council of the European Union and the EU court over her removal from office because of Brexit. Eleanor Sharpston QC, advocate general to the court in Luxembourg, has lodged two claims challenging her replacement by a Greek lawyer before her term in office was scheduled to end next year.
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Brexit ‘could impede coronavirus contact tracing on island of Ireland’
Lisa O’Carroll – The Guardian
Brexit could put at risk the contact tracing of coronavirus patients on the island of Ireland if the UK crashes out of the EU without a trade deal at the end of the year, the health minister in the Northern Ireland assembly has conceded. Contact tracing in the region is expected to resume next week but may face challenges if the virus, as is probable, continues to threaten communities beyond the 31 December deadline for a Brexit trade deal, local politicians have said.
/jlne.ws/2VRgIWA

Brexit: Electoral Commission and Arron Banks reach settlement
BBC News
A dispute between the Electoral Commission and Brexit campaigner Arron Banks has been settled. Mr Banks, who funded Leave. EU, threatened to take the watchdog to court for defamation in October 2019. The commission had referred Mr Banks to the National Crime Agency (NCA) a year earlier, after his campaign was fined for breaking electoral law during the 2016 Brexit referendum.
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