Could stock market volatility return in 2020?

Feb 14, 2020

Lead Stories

Could stock market volatility return in 2020?
Bloomberg
Stock market volatility, as measured by the Cboe Volatility Index, is near 5-year lows even as instability in the Middle East and the coronavirus have led to pockets of turbulence.
“We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,” Federal Reserve Chairman Jerome Powell told U.S. lawmakers Feb. 11. However, the top U.S. central banker said that the Federal Open Market Committee “believes that the current stance of monetary policy will support continued economic growth, a strong labor market and inflation returning to the committee’s symmetric 2% objective.”
/bloom.bg/2wcLdvz

Nancy Pelosi’s Husband Scooped Up Amazon, Facebook Stock
Ed Lin – Barron’s
House Speaker Nancy Pelosi recently disclosed that her husband, Paul, has acquired more Amazon. com and Facebook stock. Paul Pelosi, a businessman and investor, used options to acquire Amazon stock, and sold Amazon options. He also used options to acquire Facebook stock. The disclosure was made in a form Speaker Pelosi filed on Feb. 11 with the Office of the Clerk of the U.S. House of Representatives.
bit.ly/3bFBBcX

Nasdaq options exchanges revoke self-help against NYSE Arca
April Joyner and Saqib Iqbal Ahmed – Reuters
Options exchanges run by Nasdaq Inc resumed normal processing of trades from NYSE Arca on Friday after having declared “self-help” alerts against the exchange. A “self-help” alert is a notification issued by a trading exchange when another exchange is dealing with internal problems processing trades and orders are routed through alternate venues. The “self-help” alerts, which began shortly before 10:00 am EST (1500 GMT), were revoked roughly 40 minutes later, reflecting a resolution of the processing issue.
/reut.rs/2SubAG9

Inflows From India Bond Index Entry Depend on What it Sells
Subhadip Sircar – Bloomberg
India is hoping to lure billions of dollars by getting its bonds included in global indexes. The inflow, according to Deutsche Bank AG, hinges on the strategy Prime Minister Narendra Modi’s government uses for the issuance, and its size.
/bloom.bg/3bCjXHh

Bullish Tech Bets Fuel Options Frenzy
Dani Burger – Bloomberg (Video)
A frenzy of bullish bets are swirling around the biggest U.S. tech names. Since the start of the year, U.S. option volume has surged 77% to a record, according to data from Goldman Sachs. Now call options on heavyweights like Microsoft have become more expensive than those protecting against declines for the first time since early 2018.
/bloom.bg/39AR8t0

Morgan Stanley FX loss leaves ill-feeling, questions in wake
Lukas Becker Ben St. Clair – Risk.net (Subscription)
Traders caught in the wash from Morgan Stanley’s ill-fated options trades last year are trying to piece together the events that led to a reported $170 million loss for the US bank, and upended Turkish lira options books across the Street. Based on a series of options trades that started around March – at prices that surprised other traders – the US bank is believed to have been trying to manage a complex and highly illiquid underlying position.
bit.ly/39B6gGQ

Strategy

How To Protect And Capitalize During Volatile Markets
Rob Isbitts – Forbes
Playing the game of “Where’s Voldo”to save your assets Market volatility is rising sharply following a long layoff. Like the kids’ game ”Where’s Waldo,” you might have been wondering where the wild swings of the stock market have been. After all, 2019 was a low-volatility, upwardly-mobile year for stock markets around the globe. Until the last week or so, you could have been excused for wondering, ”Where’s Voldo?” Look no further Voldo (volatility) has returned.
bit.ly/2UNqrNz

Miscellaneous

The numbers suggest the green investing ‘mega trend’ is here to stay
Elliot Smith – CNBC
2019 saw a total of 479 green bonds issued worldwide, up by a quarter compared to the previous year. And 2020 is set to be a “bumper” year for green bonds, according to Linklaters. Hedge fund managers are also feeling the ethical squeeze, with growing investor demand the key driver in hedge fund ESG investing.
/cnb.cx/31UhlzR

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