Hits & Takes
John Lothian & JLN Staff
Here is the LINK for the DTCC press release about the proposal to shorten the U.S. settlement cycle to T+1 within two years.
Former CFTC Chairman J Christopher Giancarlo has an op-ed in the Financial Times titled “Let the market determine bitcoin’s value; Well-regulated trading is the best way to sort through conflicting views of the currency’s worth.” Giancarlo is a big proponent of a digital dollar.
The New York Times reports that California has passed the 50,000-death mark for the coronavirus, the most of any state, and that a new coronavirus variant is spreading in New York, according to researchers.
However, Bloomberg is reporting that “Two-Thirds of New York City’s Arts and Culture Jobs Are Gone,” which if true is very bad for when we can return to public entertainment.
In fashion news, the New York Time has a story titled “This Is the Coat to Wear to Davos.” The topcoat is made of Norwegian wool and is as warm as the big puffy coats. They are reportedly the favorite of financiers, news anchors and the movie crowd. My only question is “How Much?” and do they come in tall, or the other way around.
The Australian Securities & Investments Commission, or ASIC, has a press release titled “ASIC sues NAB for unconscionable conduct and misrepresentations over account fees.” I know some people who feel this way about other fees charged in the industry, especially for data.
Variety is reporting that Pulitzer finalists “Tom Wright and Bradley Hope have teamed for Project Brazen, a multi-platform journalism studio that will uncover global true stories from the world of entertainment, business, crime and international politics via podcasts, books, documentaries, television series and films.”
Xavier Rolet (Non Executive Chairman), Matthew Elliott (Senior Political Adviser) and Dr Clive Black (Head of Research) have a post on Shore Capital Markets website titled “Keeping the City healthy requires a global perspective and a strategically engaged British Government.”
Scott Knudsen, the CEO of Cove Markets, which has a platform to help you get the best crypto prices, talked his position a bit but had a great point saying on a tweet, “It’s interesting that #Coinbase makes 96% of its revenue from high fees while often executing trades at inferior prices. Meanwhile most people can trade stocks for free, are guaranteed the best price in market, and often getting price improvement inside the quote. Let’s fix this.”
The Sun is reporting that Kenneth Branagh is unrecognizable as Boris Johnson for new coronavirus drama “This Sceptred Isle.” You have to see it to believe it.
Owl Labs has published a piece on ’10 Icebreakers for a remote meeting.’ I have the first meeting of the Pathway to Adventure Council (Boy Scouts of America) Development Task Force today and need to break some ice.
We had no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Today we have an Open Outcry Traders History Project video of Mike Cavanaugh, a former CBOT trader who made the transition to electronic trading and brokering and is doing very cool things today in fintech.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Jim Bell, former chief financial officer of GameStop, is resigning from his position over a “disagreement over strategy,” Bloomberg reports. From the sound of it, he was pressured to leave. Bell is an ex-Navy officer who has worked in executive roles for various companies over the years, including Wok Holdings (owners of the PF Changs restaurant chain), Harry & David Holdings Inc., and Piper Jaffray Cos. Apparently Ryan Cohen – GameStop board member, former Chewy.com CEO, and “activist investor” (whatever that means) – has been pushing for change in the company. GameStop, which has been one of the biggest retailers of hard-copy video games in the video game industry for years, has struggled to adapt to the industry’s increasingly digital nature as gaming platforms have emphasized digitally-downloaded games over games read from physical media (like CDs). Most of GameStop’s revenue tends to come not only from selling video games and consoles, but selling used games and DVDs, as well as preorders for physical media, which often come with extra bells and whistles like exclusive in-game content or free swag. From the looks of it, Cohen has been pushing for the company to transition from a brick-and-mortar business to more of an e-commerce business. It would be a smart move, though I must admit, my inner child saddens at the thought of GameStop’s retail stores, in which I used to spend hours during my youth, disappearing forever. At least it ain’t all bad for Bell, though – he’s reportedly leaving with a $30 million severance package.~MR
The January Cannabis Market Insights published by Canadian-based Nasdaq analysts highlights a few trends we’ve also seen recently. The subscriber-based report notes that in the 12 weeks between November 5, 2020 and February 6, 2021, cannabis equities as a group outpaced broader equity markets in Canada and the U.S. but also had the highest volatility. The report said the Nasdaq Yewno Equity Cannabis Index showed a 70 percent return over the three-month period, with all but one of the index’s 28 underlying securities ending higher. Nine stocks included in the index were cited in the report as outperformers, up by at least 100 percent, including Tilray, Aphria Inc. and Ligand Pharmaceuticals.~SC
The cryptocurrency trading platform Coinbase’s public filing dropped this morning on the SEC’s website. You can peruse it here. In pre-filing OTC trading of shares offered on Nasdaq Private Market the company reached a market capitalization of $100 billion. Coinbase says it has 2.8 million monthly transacting users. A date for the launch of its shares on Nasdaq has not been provided.~Thom Thompson
Mike Cavanaugh – Open Outcry Traders History Project
Mike Cavanaugh found his way to the trading industry despite his degree in political science because he had a brother-in-law in the wheat pit at the CBOT. He did a summer internship working for “one of the more prolific wheat traders” and soon fell in love with the place.
Pfizer-BioNTech Shot Could Help End Pandemic, Israel Study Shows
Naomi Kresge and Jason Gale – Bloomberg
Shot cleared hurdles for preventing spread, symptoms, deaths; Effectiveness held up under scrutiny in real-world conditions
Pfizer Inc. and BioNTech SE’s Covid-19 vaccine was overwhelmingly effective against the virus in a study that followed nearly 1.2 million people in Israel, results that public-health experts said show that immunizations could end the pandemic.
*****A light at the end of the tunnel that is not a train coming at us for the first time in a while.~JJL
SPAC and ESG Fads Are on Collision Course With Billions at Stake
Swetha Gopinath – Bloomberg
SPAC IPOs have raised nearly $140 billion over the past year; Bernstein strategists question if SPACs are good fit for ESG
Two of the hottest equity market trends are headed for a clash as some ESG investors are having second thoughts about blank-check firms that have flooded the market. Early signs show that money managers wedded to environmental, social and governance themes are reluctant to buy into special-purpose acquisition companies before a target has been identified. That could potentially cut SPACs out of an investment class that’s on course to exceed $53 trillion by 2025, according to Bloomberg Intelligence.
*****How many different words can you spell with SPAC and ESG?~JJL
New Robin Hood Report: Pandemic Response Kept 1 Million New Yorkers Out of Poverty in 2020 But Failed to Close Racial Gap; Robin Hood and Columbia University to Unveil Report Today at No City Limits 2021
Robin Hood, in partnership with Columbia University, today release the third annual Poverty Tracker report on the state of poverty in New York City, detailing economic and social disparities that have been exacerbated by the pandemic, and highlighting policies that can keep people out of poverty while improving racial equity.
*****Robin Hood strives to improve financial inclusivity, but it isn’t really inclusive if people of color are not served as well.~MR
Let the market determine bitcoin’s value; Well-regulated trading is the best way to sort though conflicting views of the currency’s worth
J Christopher Giancarlo – FT
Bitcoin’s price is bouncing around $50,000 giving it an aggregate value near $1tn. The digital currency is increasingly part of the modern financial landscape. The venerable BNY Mellon is now handling bitcoin, Mastercard is integrating it into its payments systems and Tesla bought $1.5bn of bitcoin for its corporate treasury.
*****Chris Giancarlo is not letting go of his support for digital currencies and bitcoin. Maybe he is actually Satoshi Nakamoto.~JJL
Baffled Canadians Spread Reports Of ‘Hard’ Butter
Emma Bowman – NPR
There’s something off about the butter in Canada that’s left many flustered residents looking for answers. For weeks, Canadians have increasingly churned up debate on social media with anecdotes about “hard” butter that fails to spread as easily as it once did. “Something is up with our butter supply, and I’m going to get to the bottom of it,” cookbook author Julie Van Rosendaal tweeted earlier this month, renewing speculation. “Have you noticed it’s no longer soft at room temperature? Watery? Rubbery?”
*****What is the world coming to!?~MR
Wednesday’s Top Three
Our top story Wednesday was the Wall Street Journal’s Clearinghouse Urges Faster Trade Settlement Amid GameStop Scrutiny, about the Depository Trust & Clearing Corp’s new white paper advocating moving to T+1 settlement. Second was Bloomberg’s Isolated, Bored Employees Could Use a Little TLC These Days, with some tips for bosses on how to make employees “feel valued and connected.” Third was Why London should resist the Spac craze, from the Financial Times.
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Crop Trading Giants Start Blockchain Platform With Brazil Deals
Andy Hoffman – Bloomberg
Covantis, a blockchain-powered digital operations platform backed by some of the world’s biggest agricultural commodities traders, started operations with bulk soybean and corn exports from Brazil. The joint-venture, controlled by trading houses including Archer-Daniels-Midland Co., Bunge Ltd., Cargill Inc., Louis-Dreyfus Co., Cofco and Glencore Plc’s Viterra, went live on Thursday, Geneva-based Covantis said on its website.
BoE governor warns EU over derivatives clearing power grab; Andrew Bailey says tensions will escalate if banks are forced to cut ties with City
Philip Stafford and Delphine Strauss and Sam Fleming – FT
The EU risks a “serious escalation” in tensions in its relations with the UK if Brussels attempts to force banks to move all clearing of euro-denominated derivatives from London to the eurozone, the governor of the Bank of England warned on Wednesday.
US stock clearing house proposes quicker settlements after GameStop saga; DTCC sets out plan to cut settlement times to one day after calls from brokerage Robinhood
Philip Stafford – FT
The clearing house at the centre of the GameStop trading frenzy has proposed cutting the time it takes to settle share deals, following complaints from broker Robinhood that the two-day process was a critical factor in its decision to restrict some share trading.
Fed Outage Raises Questions on Wall Street as Services Restored
Matthew Boesler and Jennifer Surane – Bloomberg
Fed website says disruptions were discovered around 11:15 a.m; Fed services handle millions of payment transactions every day
For about four hours Wednesday, Federal Reserve systems that execute millions of financial transactions a day — everything from payroll to tax refunds to interbank transfers — were disrupted by what appeared to be some sort of internal glitch. Systems were restored by the end of the day, but the outages once again raise questions about the resilience of critical infrastructure that Americans rely on to process payments. The episode follows two significant disruptions to the Fed’s payment services that occurred in 2019.
GameStop shares double in final 90 minutes of trading day; Volatility returns to favourite of the Reddit day-trading forum
Eric Platt and Aziza Kasumov – FT
GameStop shares doubled in heavy volume in the final 90 minutes of trading on Wednesday, in a return of the volatility that rocked markets last month and led to a congressional inquiry.
Robinhood CEO Criticizes ‘Runaway Chain Reaction’ of Short Sales
Misyrlena Egkolfopoulou and Spencer Norris – Bloomberg
Argument to made that same share should be shorted once; Former SEC Chair Clayton says more disclosure on shorts needed
Robinhood Markets Chief Executive Officer Vlad Tenev said short selling the same shares multiple times is creating a chaotic dynamic for markets and investors. When a stock is being borrowed over and over it “creates some sort of runaway chain reaction,” Tenev said at the New York Times DealBook DC Policy Project virtual conference Tuesday. “How many times should we let the same share be shorted? I think there’s an argument that the answer should be one.”
Munger Calls Out Robinhood, Other Brokers for ‘Dirty’ Money
Katherine Chiglinsky and Hannah Levitt – Bloomberg
Munger also says that ‘commission-free’ trading is a lie; ‘No question’ that Wells Fargo let down investors, Munger says
Charlie Munger, the long-time business partner of Warren Buffett, said Robinhood Markets and other brokerages that attract inexperienced retail investors are essentially offering “gambling services” and have found a “dirty way” to make money.
Dave Portnoy Hurls Insults at Robinhood’s Vlad Tenev in Livestreamed Chat
Misyrlena Egkolfopoulou – Bloomberg
Robinhood has been criticised for curbing trading in GameStop; Tenev says curbs were necessary to prevent liquidity crunch
Vlad Tenev, speaks virtually during a House Financial Services Committee hearing on Feb. 18.
Robinhood Markets Chief Executive Officer Vlad Tenev went into his interview with Dave Portnoy looking forward to discussing Bulgarian pizza. Within the first few minutes of their chat, he was called a “rat” by the brash Barstool Sports founder.
GameStop Jumps After Finance Chief Pushed Out Over Strategy
Olga Kharif – Bloomberg
GameStop Corp. shares more than doubled after Chief Financial Officer Jim Bell was pushed out in a disagreement over strategy, a move investors took as a sign the video-game retailer is on the comeback trail. Bloomberg News reported Tuesday that Bell was ousted to make way for an executive more in line with the vision of activist investor and board member Ryan Cohen. Insider also reported on the split Wednesday and investors on the Reddit discussion site seized on the news, helping send the shares up 104% to $91.70 before they were halted. Cohen has been pushing to transform GameStop from a brick-and-mortar retailer into an e-commerce company, and he’s been consolidating power at the chain.
GameStop CFO Was Forced Out as Activist Investor Pushes New Strategy; Chewy co-founder Ryan Cohen is seeking a digital transformation of the videogame retailer
Nina Trentmann and Mark Maurer – WSJ
GameStop Corp.’s finance chief was forced out of his role as activist investor Ryan Cohen pushes for a digital transformation of the ailing videogame retailer, people familiar with the matter said.
Goldman CEO Warns Remote Work Is Aberration, Not the New Normal
David Solomon wants to make sure you don’t get too attached to your Rona Rigs. The Goldman Sachs Group Inc. chief executive officer on Wednesday repeated his desire to see the firm’s offices fill up again. “This is not ideal for us and it’s not a new normal,” Solomon said at a Credit Suisse Group AG conference. “It’s an aberration that we are going to correct as quickly as possible.”
Why Texas Broke: The Crisis That Sank the State Has No Easy Fix; When the cold spell plunged the energy powerhouse into darkness, Texans found profound flaws in their infrastructure. Meaningful change may be a long time coming.
Rachel Adams-Heard – Bloomberg
The Houston skyline was lit pink for Valentine’s Day. It was cold—really cold, at least by the standards of the Gulf Coast, where wintertime lows are generally around 50F. That Sunday night it was below freezing; the forecast called for the first snow in years. Earlier in the day, the Electric Reliability Council of Texas, better known as Ercot, the nonprofit that manages the state electricity grid, had gently urged Texans to be mindful during the storm. “We know it’s cold. But if you turn down your heat to 68 degrees and put on a fleece, you can help keep the power flowing for everyone,” the group tweeted earlier in the day. Another post showed a picture of a KitchenAid stand mixer: “Unplug the fancy new appliances you bought during the pandemic and only used once.”
Australia sovereign wealth fund chief warns of stock market ‘clean-out’; Some asset prices are ‘unsustainable’, says Peter Costello, as concerns rise over inflation
Jamie Smyth in Sydney and Robin Wigglesworth – FT
The world’s big central banks are inflating a bubble in technology stocks that will lead to a “clean-out” on global equity markets, the chairman of Australia’s $135bn sovereign wealth fund has warned.
McKinsey partners sacrifice leader in ‘ritual cleansing’; Sven Smit and Bob Sternfels compete to run the consultancy but the question of reform looms large
Andrew Edgecliffe-Johnson and Andrew Hill – FT
The news this week that Kevin Sneader would be McKinsey’s first global managing partner since 1976 not to win a second three-year term stunned many of the consultancy’s partners and influential alumni.
Rich Countries Borrowed $18 Trillion in 2020. Few Seem Worried About Them Paying It Off; Developed-world governments sold bonds in record volumes in the first year of the coronavirus pandemic, but their borrowing costs fell
Paul Hannon – WSJ
Rich countries’ governments borrowed $18 trillion from bond markets in 2020—more than ever before—but their borrowing costs hit a record low, due to a big rise in bond purchases by central banks, as well as a lack of concern about public debt levels among private investors.
Hong Kong signals wider Connect scheme, counting on Chinese funds to get stock market’s mojo back after raising stamp duty; Stock Exchange will consult on how to let smaller, non-tech firms can have secondary listing; A-shares derivative and more connect schemes may be launched
Enoch Yiu – South China Morning Post
Hong Kong will expand its market reforms and cross-border investment channels with Shanghai and Shenzhen to tap investment from the world’s second-largest capital market, as the city battens down the hatches to raise funds for government coffers through a 30 per cent hike in trading stamp duty.
JPMorgan Exits Mexico Private Banking, Refers Clients to BBVA
Michael O’Boyle, Michelle F Davis, and Cyntia Aurora Barrera Diaz – Bloomberg
Bank to serve clients from Mexico via platform outside country; Decision follows similar move by the firm in Brazil last year
JPMorgan Chase & Co. is shutting its private banking business in Mexico, according to people with knowledge of the matter, as wealthy clients in some of Latin America’s largest economies move their money to international financial capitals.
Former Mining Exec Details Suitcase Full of Cash He Used to Seal Deals
By Jack Farchy and Javier Blas – Bloomberg
Top commodity traders discuss industry ‘plagued’ by corruption; Comments come as largest trading houses face bribery probes
A former Glencore director said he used to fly the world carrying a bag full of cash to secure deals for the commodity trader, evidence of the industry’s longstanding history of corruption, a problem it’s still grappling with today. “I used to go with 500,000 pounds to London,” Paul Wyler who was one of Glencore’s most senior executives and a board director until 2002, said in an interview for The World for Sale, a book on the history of the commodity trading industry.
Stop Worrying About Extremely Unlikely Covid Risks; After nearly a year, we’ve learned some things about how the virus spreads — and doesn’t.
Faye Flam – Bloomberg
The USDA has now announced that there’s “no credible evidence” that people can get Covid-19 from touching packages in the grocery store. At first blush, this sounds like a breakthrough — but there was no evidence of this in the spring of 2020 either.
Pfizer Details Plans for Studying Booster Shots Against Variants
Robert Langreth – Bloomberg
Clinical trial of third shot for Covid-19 vaccine has begun; Strain-specific vaccine study could begin in about a month
Pfizer Inc. and partner BioNTech SE have begun a clinical study to see if a third shot of their existing Covid-19 vaccine can stimulate stronger immune responses against new variants. The clinical trial will examine safety and immune responses of a third dose of the vaccine in as many as 144 people who participated in the companies’ Phase 1 study. The dose is being given six to 12 months after the initial two-dose regimen, and researchers will test blood from the participants to see if it enhances levels of antibodies produced against new strains from South Africa and elsewhere.
Moderna Plans Multi-Pronged Approach on Virus Variants
Robert Langreth – Bloomberg
Moderna Inc. is planning to study multiple approaches to vaccine booster shots that could protect against emerging coronavirus variants, while gearing up to produce more doses of its shots this year and next.
A New Survey of New Yorkers Exposes Pandemic Inequality; Black and Latino New Yorkers have suffered food hardship, housing insecurity and unemployment at far higher rates than white New Yorkers since the start of the pandemic.
Nimra Shahid and Marie Patino – Bloomberg
Ever since New York became one of the first U.S. cities forced to contend with coronavirus, the pandemic’s inequality was abundantly clear: There were those who worked from home or fled to second homes, and there were those who risked essential work or found themselves unemployed.
Bitcoin’s Second North American ETF Just Started a Price War
Claire Ballentine – Bloomberg
Evolve cuts price on product just one week after debut; Move makes Evolve fund cheaper than more popular Purpose ETF
Just a week after the first Bitcoin exchange-traded funds in North American started trading, the underdog firm just kicked off a fee war. Evolve Fund Group in Canada lowered the price on its Bitcoin ETF, ticker EBIT, to O.75% from 1%, according to a statement. That’s now cheaper than the 1% expense ratio of its competitor the Purpose Bitcoin ETF (BTCC), which starting trading just a day before Evolve’s offering but has already attracted far greater interest.
J&J vaccine performs well against variants in boost for Covid battle; FDA report finds single-dose shot effective in preventing severe symptoms in US, Brazil and South Africa
Hannah Kuchler – FT
US Food and Drug Administration staff have confirmed data showing Johnson & Johnson’s single-shot Covid-19 vaccine is safe and effective, and found it worked nearly as well at preventing severe disease caused by the variant first discovered in South Africa.
India turns to private sector to boost sluggish Covid-19 vaccine drive; Government’s early struggles are reminiscent of the days of the socialist ‘Licence Raj’
Amy Kazmin – FT
I first arrived in India in the mid-1990s at the tail-end of its socialist-style “Licence Raj”. New Delhi was relaxing control over the country’s economic life, but basic amenities — long the monopoly of the state providers — were still in short supply.
‘V.I.P. Immunization’ for the Powerful and Their Cronies Rattles South America; A wave of corruption scandals is exposing how the powerful and well-connected in South America jumped the line to get vaccines early. Public dismay is turning into anger.
Mitra Taj, Anatoly Kurmanaev, Manuela Andreoni and Daniel Politi – NY Times
The hope brought by the arrival of the first vaccines in South America is hardening into anger as inoculation campaigns have spiraled into scandal, cronyism and corruption, rocking national governments and sapping trust in the political establishment.
New Findings on 2 Ways Children Become Seriously Ill From the Coronavirus; A large study found that young people hospitalized with acute Covid-19 have symptoms and characteristics that differ from those with a Covid-linked inflammatory syndrome.
Pam Belluck – NY Times
A large nationwide study has found important differences in the two major ways in which children have become seriously ill from the coronavirus, findings that may help doctors and parents better recognize the conditions and understand more about the children at risk for each one.
Johnson & Johnson’s Vaccine Works Well and May Curb Virus Spread; F.D.A. studies show the shot strongly protects against severe illness and may reduce spread of the virus. But the drugmaker has fallen short of initial production goals.
Carl Zimmer, Noah Weiland and Sharon LaFraniere – NY Times
The coronavirus vaccine made by Johnson & Johnson provides strong protection against severe disease and death from Covid-19, and may reduce the spread of the virus by vaccinated people, according to new analyses released Wednesday by the company and the Food and Drug Administration.
Exchanges, OTC and Clearing
Inter(n)view: Axelle Requien
In our “Inter(n)view” series, our interns, trainees and students share their insights into Deutsche Börse Group. Up next is Axelle Requien, who supports the Business Strategy & Analytics team in Deutsche Börse Group’s Trading & Clearing division and talks about her experiences in hindsight.
DTCC Proposes Approach to Shortening U.S. Settlement Cycle to T+1 Within 2 Years | DTCC; New white paper highlights the benefits of moving to a T+1 settlement cycle, and details plan to continue building industry support ; Paper also provides updates on efforts already underway to increase settlement efficiency and reduce risk
The Depository Trust & Clearing Corporation (DTCC), the premier market infrastructure for the global financial services industry, today released a two-year industry roadmap for shortening the settlement cycle for U.S. equities to one business day after the trade is executed (T+1). In its latest paper, “Advancing Together: Leading the Industry to Accelerated Settlement,” DTCC highlights the immediate benefits of moving to a T+1 settlement cycle, including cost savings, reduced market risk and lower margin requirements as well as the firm’s plans for galvanizing the necessary support for the project across a wide range of market participants.
DTCC outlines two-year roadmap for transition to shorter settlement; A new white paper highlights the benefits of moving to a T+1 settlement cycle and details plans to achieve this in two years.
Jonathan Watkins – The Trade
DTCC has released a two-year industry roadmap for shortening the settlement cycle for US equities to one business day after the trade is executed.
Goldman, Nasdaq, BoA invest $14 million in US start-up institutional trading venue; The major market participants were joined in the series A funding round by BMO Financial Group, AllianceBernstein and MaC Venture Capital.
Annabel Smith – The Trade
Goldman Sachs, Nasdaq Ventures and Band of America Merrill Lynch have invested $14 million in US start-up alternative trading system (ATS), PureStream Trading Technologies.
Liquidnet appoints program trading sales executive to spearhead Americas portfolio trading; John Emmert joins Liquidnet as head of the Americas trading desk after spending 10 years with Deutsche Bank as director of its global program sales and trading group.
Annabel Smith – The Trade
Institutional trading network and dark pool operator Liquidnet has appointed John Emmert, a 20-year program sales and trading executive to head up its trading operations for the Americas.
TSX Venture Exchange Announces the 2021 Venture 50; TSXV’s top performing companies to celebrate with virtual market open today
TSX Venture Exchange (TSXV) today announced the 2021 Venture 50, the Exchange’s annual program showcasing the top performing listed companies from five industry sectors: Clean Technology and Life Sciences, Diversified Industries, Energy, Mining, and Technology
ICE Announces Rapid Growth in Marine Fuel and Wet Freight Complex a Year on From IMO 2020; Marine Fuel OI up 75% y/y as customers adopt it for hedging; Wet Freight hits record OI of more than 106,000 lots; 2.3 billion barrels of marine fuel and 600 million tonnes of wet freight traded on ICE in 2020
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, announced record growth across its Marine Fuel and Wet Freight complex, a year on from the implementation of the sulphur cap by the International Maritime Organization (IMO) in January 2020.
ADNOC to base OSPs for crude exports on Murban futures contract from June: ICE; Murban futures contract to be launched March 29; Contract will trade for physical delivery two months ahead; Murban OSP based on futures, other grades at differentials
Official selling prices for Abu Dhabi National Oil Co.’s crude exports will be based on the soon-to-be-launched ICE Murban Futures Contract from June, the Intercontinental Exchange said Feb. 24.
CME STP Notices: February 25, 2021
CME STP FIXML API Connectivity Documentation
CME Globex Notices: February 22, 2021
Critical System Updates
iLink 2 on MSGW Decommission – Migration Deadline This Week
Update on Order Routing and Front-End Audit Trail Requirements for iLink 3
iLink 3 SBE Schema Update – March 7
Update – Anchor Leg Pricing Enhancement – March 21 UPDATE
CME FX Link Enhancements – March 28
Update – GLink Network Infrastructure Upgrade at Aurora Co-Location Facility – March 27 UPDATE
CME FX Link Enhancements: Drop Copy Impact – March 28
Posting the news on JPX-LEI portal site
Upon the request of GLEIF (Global Legal Entity Identifier Foundation), JPX/TSE provides “Information on European Union’s Securities Financing Transaction Regulation and its implications for issuers in non-EU countries” on the JPX-LEI portal site. Please see the following page for details.
LGX Expands To Welcome Climate-Aligned Issuers
In the presence of Climate Bonds Initiative’s CEO Sean Kidney, the Luxembourg Stock Exchange (LuxSE) today announced the latest development of the Luxembourg Green Exchange (LGX): a brand-new section of LGX dedicated to Climate-Aligned Issuers (CAI), built on Climate Bonds Initiative’s issuer screening and research. As the world’s leading platform for sustainable finance, LGX is now adding to its labelled bonds section a new section dedicated to issuers of debt securities that are active in climate-aligned sectors such as clean energy, low-carbon transport and sustainable land use, but that may not have issued bonds in the labelled format.
KRM22 Partners with Kintail Consulting to Address People and Culture Risk.
KRM22 is pleased to announce a partnership with Kintail Consulting, the consultancy dedicated to supporting organisations in the development of resilient leaders and giving people the skills and behaviours to help them and their organisation grow, to address the critical area of People and Culture Risk in Capital Markets.
Head of EY Germany set to step down amid Wirecard scandal; Hubert Barth is expected to take on a new role at the Big Four audit firm
Olaf Storbeck – FT
The head of EY Germany, the longstanding auditor of disgraced payments firm Wirecard, is expected to step down from the role, according to people familiar with the matter.
Stitch emerges from stealth with $4M for its API fintech play in Africa
Tage Kene-Okafor – TechCrunch
Over the years, there has been a growing trend of fintech infrastructure players around the world. In Africa, a handful of startups have launched in the past three years to provide such services. Stitch, a South African fintech startup, is one of them and today, it is coming out of stealth and announcing its seed round of $4 million. This makes it the largest round raised by any API fintech startup in Africa at the moment. Founded by Kiaan Pillay, Natalie Cuthbert, and Priyen Pillay, Stitch wants to provide full API access to financial accounts across Africa starting from its first market, South Africa. With its API, developers can connect apps to financial accounts. This allows users to share their transaction history and balances, confirm their identities, and initiate payments.
Indonesian FinTech Builds Bridges Between Banks And Workers
There are roughly 270 million people living and working in Indonesia today, roughly 92 million of whom do not have bank accounts. That leaves a little over a third (34 percent) of the nation’s population unserved by the banking system. It’s a reality that makes providing value for the Indonesian consumer a challenge, GajiGesa Co-Founder Vidit Agrawal told PYMNTS in a recent conversation, and also a tremendous opportunity to build a bridge between those excluded customers and the banks. GajiGesa is a newly founded FinTech designed to offer workers access to their wages as they earn them. Agrawal believes that in time it can connect Indonesian consumers to the formal financial system, particularly blue collar consumers who have been largely overlooked by banks due to their relatively small asset value.
Kabbage Co-Founder Muses On Alt Lending, Fintech Trends, And More
Cheryl Winokur Munk – Forbes
Last year was a tumultuous one for many individuals and small businesses, but fintechs have helped expand access to financial services during the pandemic. A recent study, which garnered data from 1,385 fintechs in 169 jurisdictions from mid-June to mid-August, showed most firm types in this space reported strong first-half growth compared with the pre-pandemic period a year earlier. Notably, on average, firms in areas such as digital asset exchanges, payments, savings, and wealth management reported growth in transaction numbers and volumes of 13 percent and 11 percent respectively, according to the study. Digital lending dropped 8 percent by volume of transactions and experienced a 9 percent jump in outstanding loan defaults.
How Coinbase Is Worth $100B
Lex Sokolin – Coindesk
The capital markets feel like one giant game. With the profound volatility of crypto assets, the billions of issuance in special purpose acquisitions companies (SPAC) trying to take fintechs public and incredible monetary printing by the U.S. government, it is hard to know whether anything has real value. The animal spirits are on full display.
Coinbase’s IPO docs have just dropped; Ceci n’est pas un ICO.
Jamie Powell – FT
Just when you thought you’d seen it all in SEC filings, along comes the Coinbase IPO prospectus.
Coinbase Files to Go Public on Nasdaq Via Direct Listing
Crystal Tse – Bloomberg
Coinbase Global Inc., the biggest U.S. cryptocurrency exchange, filed to go public via a direct listing, in what’s anticipated to be a break-through moment for the industry. The company won’t raise any proceeds in the transaction, Coinbase said in a filing with the U.S. Securities and Exchange Commission on Thursday.
An outage at the Fed leaves multiple crypto exchanges unable to settle
Aislinn Keely – The Block
An outage at the Federal Reserve is creating settlement issues for many financial institutions and exchanges. The Fed’s service status page shows that most of its services are currently down, including its settlement network. The central bank itself and its messaging system, FedMail, are both still available, according to the outage page. The Fed’s Automated Clearing House (ACH) payment system and FedWire Funds, the real-time settlement network that connects U.S. banks, are down among other key services.
It’s Gates Versus Musk as World’s Richest Spar Over Bitcoin
Yoojung Lee – Bloomberg
The third-wealthiest person said he’s not a Bitcoin fan; Elon Musk has been a vocal supporter of the cryptocurrency
Unless you’re the world’s richest person, you shouldn’t be buying Bitcoin. That’s the message from Bill Gates – the third richest. With a rally of more than 400% over the past year, Bitcoin has become increasingly mainstream, and everybody including prominent investors and policy makers have been talking about it. Elon Musk’s Tesla Inc. recently invested $1.5 billion in the cryptocurrency and said it would accept it for payments.
Beware the Bitcoin-ARK-Tesla Connection; With day traders swarming, regulators need to keep their guard up.
Lionel Laurent – Bloomberg
Regulators and policy makers must sometimes feel their task is thankless when it comes to reining in the consumer-led euphoria sweeping cryptocurrency and financial markets amid Covid-19. This week’s reaction to crypto exchange Bitfinex reaching a $18.5 million settlement with New York’s Attorney General over allegations that it covered up losses and lied about reserves has pretty much been to carry on as before. “On the grand scale of things, it’s less than a speeding ticket,” one investor told Bloomberg News. The exchange and its affiliated stablecoin, Tether, pegged to the U.S. dollar and traded widely in Asia, have been banned in New York — yet Tether’s $36 billion market value is seven times what it was at the probe’s start.
Fed’s Digital Dollar Would Look Nothing Like Bitcoin; Fedcoin wouldn’t need the massive computations of cryptocurrencies, but it would effectively nationalize the payment industry, competing with banks, credit cards and Venmo.
Noah Smith – Bloomberg
Treasury Secretary Janet Yellen recently mentioned the idea of creating a so-called digital dollar — a new form of electronic currency that would make the payment system easier for Americans and presumably compete with Bitcoin and other cryptocurrencies. But there’s little rationale for a government-managed online dollar that looks anything like Bitcoin. There are probably better ways for the Federal Reserve to make it easier and cheaper for Americans to pay for things.
Powell says the Federal Reserve will engage the public on a digital dollar this year
Aislinn Keely – The Block
The Federal Reserve will be engaging with the public on the question of a digital dollar, according to Chair Jerome Powell. Powell made his comments during Wednesday’s House Financial Services Committee hearing in response to questions on the digital dollar concept from Representative Patrick McHenry (R-NC). “This is going to be an important year,” he said. “This is going to be the year in which we engage with the public pretty actively.” This engagement will come in the form of public events, according to Powell. He did not elaborate further but said the central bank is working on the rollout of these events.
Novogratz’s Galaxy Reaches $1.2 Billion in Asset Management Unit
Derek Decloet – Bloomberg
Billionaire’s firm sees $325 million fourth-quarter income; Assets managed include Bitcoin fund with CI Financial
Billionaire investor Mike Novogratz’s Galaxy Digital Holdings Ltd. said its asset management unit has grown to about $1.2 billion after launching new products, including a Bitcoin mutual fund in partnership with Canada’s CI Financial Corp.
Hedge funds’ bitcoin trade helps lift Grayscale assets to $38bn; Cryptocurrency investing group has garnered a deluge of inflows, driven in part by arbitrage bets
Eva Szalay – FT
Assets at cryptocurrency investing firm Grayscale have shot up to almost $38bn — for crypto enthusiasts, a sign of accelerating institutional interest in what has long been a speculative bet. But analysts say the build-up has been fuelled in part by a lucrative hedge fund trade that exploits a quirk in its flagship product.
Craig Wright is taking legal action to recover $3.5bn of “stolen bitcoin”; Craig-toshi Nakamoto is back. And he means business.
Jemima Kelly – FT
Fresh from our inboxes on Wednesday: Litigation law firm ONTIER LLP has today begun ground-breaking legal proceedings against a number of Bitcoin developers on behalf of Tulip Trading Limited (TTL), a Seychelles company whose primary beneficial owner is Dr Craig Wright.
DEX monthly volume figures reach new high for February
Michael McSweeney – The Block
Decentralized exchanges (DEXs) are set to finish February with the highest monthly volume on record, according to data collected by The Block. With several days remaining in the month, February’s monthly volume figure is currently $64.83 billion — just edging out January’s $61.16 billion, as shown in the graph below:
Canada’s CI Global Files for What Would Be World’s First Ether ETF; If approved, the ETF would trade on the Toronto Stock Exchange under the ticker “ETHX.”
Tanzeel Akhtar – Coindesk
The world’s first Ethereum exchange-traded fund (ETF) may be on the way, after CI Global Asset Management filed a preliminary prospectus in Canada on Thursday. In an announcement, the firm said its proposed “CI Galaxy Ethereum ETF” would be the first ETF in the world to invest directly in ether (ETH, +0.08%), the native cryptocurrency of the Ethereum network. If approved, the ETF would trade on the Toronto Stock Exchange (TSX) under the ticker “ETHX.” Galaxy Digital Capital Management LP will act as the ether sub-advisor and execute trading on behalf of the ETF.
Biden Revokes Trump Orders on Financial Regulation, Immigration
Justin Sink – Bloomberg
President’s move is his latest effort to undo Trump’s legacy; Biden withdraws measure that halted issuance of green cards
President Joe Biden revoked a series of executive orders and memos issued by Donald Trump, affecting policies on financial regulation, immigration, funding for so-called “anarchist” cities and architecture. The actions were Biden’s latest to erase Trump’s legacy and reset the nation’s course, without any involvement by Congress. In Biden’s first week in office alone, he issued 39 executive actions, many of which overturned Trump orders.
The EU Should Ditch Its Fiscal Rules and Try This; All sorts of financial rules are becoming too rigid and complex for the real world. There’s a better way to regulate.
Andreas Kluth – Bloomberg
If you thought the European Union’s bickering about fiscal policy was bad in recent decades, get ready for an epic squabble once this pandemic is over. Owing to the coronavirus, the EU’s rules on debts and deficits have been suspended and most member states have vastly overshot their normal limits. But at some point next year we’ll have to talk about how fast to apply the rules again. Given the extraordinary macroeconomic situation, it’ll be tempting to tweak them — for the umpteenth time.
SEC attorney defends personal information in the Cat; Regulators will need biographical information to get the most out of the Consolidated Audit Trail, advisor said, as broker-dealers and exchanges argue over liability for breaches.
Joanna Wright – Waters Technology
Broker-dealers are terrified that the sensitive data of their customers could end up in the hands of hackers, but an attorney from the US markets regulator said it is necessary to collect this data to give regulators the power to perform detailed analysis on equities and options transactions, and spot financial crime.
Silver and Natural Gas Scrutinized by CFTC After Price Spikes
Daniel Avis – Bloomberg
Regulator closely monitoring markets, acting chairman says; Silver posts on social media a big focus, Behnam says
U.S. regulators are closely monitoring derivatives markets after silver surged and the crippling Texas storms prompted a spike in spot prices for natural gas, the acting chairman of the Commodity Futures Trading Commission said.
BoE Governor warns of rising tensions as EU derivatives clearing power struggle continues; Andrew Bailey says the UK must “resist very firmly” the EU’s attempts to force all euro-derivatives clearing into the bloc.
Annabel Smith – The Trade
The governor of the Bank of England, Andrew Bailey, has warned that tensions between the UK and the EU will escalate quickly if the EU forces euro-derivatives clearing out of the UK. Speaking to the Treasury Committee this week, Bailey said that following Brexit the UK was at risk of losing all euro-derivatives clearing if the EU attempts to force banks to move their clearing to the bloc.
ASIC sues NAB for unconscionable conduct and misrepresentations over account fees
ASIC has commenced proceedings in the Federal Court against National Australia Bank Ltd (NAB), alleging that NAB charged fees for making certain periodic payments when it was not entitled to under the bank’s contracts with its customers.
ESMA consults on methodology to calculate a benchmark in exceptional circumstances
The European Securities and Markets Authority, the EU’s securities markets regulator, has launched a consultation on draft guidelines detailing the obligations applicable to administrators that use a methodology to calculate a benchmark in exceptional circumstances under the Benchmarks Regulation (BMR).
Fabrizio Planta delivers statement on Cum-Ex/Cum-Cum at EP Subcommittee on Tax Matters
ESMA Head of Markets and Data Reporting Department, Fabrizio Planta, addressed yesterday the Members of the European Parliament Subcommittee on Fiscal Matters regarding the “Cum-Ex/Cum-Cum” tax fraud scandal. He referred to the past and prospective role of ESMA, and the recommendations and conclusions of the Final Report on the inquiry.
ESMA publishes first Q&As on crowdfunding
The European Securities and Markets Authority (ESMA), the EU securities markets regulator, has published a Questions and Answers (Q&A) regarding the understanding of Special Purpose Vehicle (SPV) aspects under the Regulation on European crowdfunding service providers for business.
ESMA appoints new chair of its Corporate Reporting Standing Committee
The Board of Supervisors of the European Securities and Markets Authority (ESMA) has appointed Annemie Rombouts, Deputy Chair of the Belgian Financial Services and Markets Authority, as Chair of the Corporate Reporting Standing Committee (CRSC).
The COVID-19 pandemic significantly affected firms’ day-to-day operations across the securities industry, including requiring firms to transition most or all their staff to remote work environments and implement remote supervisory practices. Firms adjusted their branch inspection programs to accommodate remote work requirements and travel restrictions. Join FINRA staff and industry panelists as they share how they implemented their remote branch inspection plan using zoom, electronic documentation review and other technological tools. Panelists also discuss written supervisory procedures, red flags, and how they prioritize inspections.
FINRA OTCE and OTC Transparency Data Websites Availability
FINRA will be performing scheduled maintenance to the OTCE.FINRA.org and OTCTransparency.FINRA.org websites on Saturday, February 27, 2021, from approximately 10 a.m. to 4 p.m. ET. During this time, these websites will be unavailable to users.
SEC Charges Gas Exploration and Production Company and Former CEO with Failing to Disclose Executive Perks
The Securities and Exchange Commission today announced settled charges against an Oklahoma-based gas exploration and production company, Gulfport Energy Corporation, and its former CEO, Michael G. Moore, for failing to properly disclose as compensation certain perks provided to Moore, as well as failing to disclose certain related person transactions.
The Financial Conduct Authority (FCA) makes senior appointments to drive its transformation
As part of its transformation programme to build a data-led regulator able to make fast and effective decisions, the FCA announced a restructure in December. This brought together two supervision divisions with the FCA’s policy and competition functions. Following rigorous and wide-ranging recruitment processes, Nikhil Rathi, Chief Executive of the FCA since October, has now made four further appointments to the FCA’s executive team:
FCA censures Premier FX for payment rule breaches
The FCA has publicly censured Premier FX Limited (Premier FX) for failing to safeguard its customers’ money and for misuse of its payment accounts under the Payments Services Regulations. In doing so, Premier FX seriously misled its customers about the services it was authorised to provide and how it held customers’ money.
Corporate Climate Disclosures to Get Aggressive Scrutiny by SEC
Saijel Kishan and Andrew Ramonas – Bloomberg
Acting chair Lee to direct staff to focus on global warming; Move could lead to new rules, update of 2010 SEC guidance
The U.S. Securities and Exchange Commission is boosting scrutiny of how well companies disclose risks that climate change poses to their businesses, one of its first moves to confront an issue that’s key to the Biden administration’s policy goals.
Investing and Trading
Family Trust-Tied Novo Stock Soars Over 900% After Move to Nasdaq
Cristin Flanagan – Bloomberg
Novo Integrated Sciences Inc., a stock controlled by a family trust tied to its chief executive, surged as much as 276% on Wednesday, a day after it switched trading to the Nasdaq. “The uplist to the Nasdaq Capital Market creates the opportunity for the company to have more visibility from a much broader pool of investors and, in turn, increased liquidity,” Robert Mattacchione, the company’s CEO, said in a statement earlier this week.
Dot-Com Survivors Have Wisdom for the GameStop Crowd
Joe Nocera – Bloomberg
In October 1999, five months before the internet bubble burst, I wrote a cover story for Fortune magazine titled “Trader Nation.” It was about how middle-class Americans were embracing the stock market, with some even quitting their jobs to become day traders. I’ve mentioned this article before, but given the Reddit/meme stock craziness about companies such as GameStop Corp. and AMC Entertainment Holdings Inc., I thought it would be worth talking to some of the people I interviewed then to glean some lessons about how living through a stock bubble can affect investors for the rest of their lives.
The Fed May Need to Head Off a Money-Market Mess; Some short-term interest rates could go negative unless the central bank acts.
Bill Dudley – Bloomberg
Investors are worried that a flood of cash could soon disrupt U.S. money markets, as the Treasury rushes to rid itself of money that Congress won’t allow it to keep. It’s a possibility that the Federal Reserve would do well to anticipate. Two phenomena have converged to create the impending deluge. For one, to ensure the funds needed to deliver trillions of dollars in pandemic relief, the Treasury has built up a huge cash balance at the Fed — currently about $1.6 trillion. Also, back in August 2019, Congress suspended the federal debt ceiling for two years — and has stipulated that when the ceiling comes back into effect on August 1, Treasury should be holding no more than about $120 billion in cash. This constraint was intended to prevent Treasury from preparing for the debt limit by accumulating an extraordinarily large cash balance.
Blank-Check Buyers Set Sights on Corporate Spinouts as Next Prey
Kiel Porter and Crystal Tse – Bloomberg
Ardagh is listing its beverage-can unit via SPAC deal; Carveouts can be more complex to list than other SPAC targets
Blank-check companies, flush with cash and on the hunt for a private business to take public, have started adding corporate carveouts to their list of potential purchases.
GameStop Revival Extends as Meme Stock Mania Kicks Up Anew
Katherine Greifeld, Sarah Ponczek, and Paul Jarvis – Bloomberg
Shares soar 83% premarket in extension of Wednesday’s surge; Theories include Cohen tweeting photo of McDonald’s ice cream
GameStop Corp. continued its resurgence in U.S. premarket trading, rising as much as 83% after more than doubling on Wednesday in a move that spread to a host of other meme stocks at the center of last month’s day trader-driven frenzy.
Remote Workers Face Higher, Messier Taxes This Filing Season; At worst, telecommuters can be struck with double taxation, with two or more states each trying to tax the same income.
Ben Steverman, Misyrlena Egkolfopoulou, and Donna Borak – Bloomberg
Taxes could go up this filing season for a significant number of Americans who worked at home during the pandemic, as states make competing claims to their paychecks.
Cathie Wood’s Tesla Noise Is Deafening Investors; Moves this erratic drown out the market’s signal and are cause for concern.
John Authers – Bloomberg
Stop Making Sense
Just because event A is followed by event B, it doesn’t follow that A caused B. Indeed, the chances are that B had many causes. But Wednesday’s succession of events was odd, to put it mildly, and lend themselves to a narrative.
Pimco boss warns of inflation ‘head fake’; Dan Ivascyn says bond market could be anticipating price rises that never come
Michael Mackenzie – FT
One of the most powerful US bond managers has warned of an “inflation head fake”, where misplaced concerns about a rise in consumer prices cause a jump in bond yields. The comments by Dan Ivascyn, chief investment officer at Pimco, which has $2.2tn under management, come after long-dated US Treasury yields climbed to their highest level in a year.
Anglo American refuses to be ‘seduced’ by higher commodity prices; Miner reports big turnround in second-half profits as raw materials markets soar
Neil Hume – FT
Anglo American chief executive Mark Cutifani said the global miner would not be “seduced” by rising commodity prices and splurge cash on deals or new projects after reporting its highest second-half profit since 2011.
Gamestop: meme-cry; Time is a flat circle
Jamie Powell – FT
It’s been posited by many great minds who have dabbled in Eastern philosophy that time is cyclical. From historian Oswald Spengler to Hermann Hesse, the German author favoured by wanderlust graduates, the view that the past is due to repeat can be found in a litany of texts over the past few centuries.
Red-Hot Stock Market Pushes More Companies to Go Public; The number of firms listed on U.S. exchanges surges the most since the dot-com bubble, reversing a two-decade slump
Amrith Ramkumar – WSJ
The number of publicly traded companies is rising after a two-decade slump, a shift that highlights how businesses are clamoring to capitalize on the buoyant investor sentiment that has carried everything from stocks to bitcoin to record highs.
Lumber Prices Are Soaring. Why Are Tree Growers Miserable? Sawmill operators harvest gains while Southern landowners struggle with tree surplus; ‘I’m not making anything’
Ryan Dezember and Vipal Monga – WSJ
The pandemic delivered an unexpected boon to the lumber industry. Hunkered-down homeowners remodeled en masse and low mortgage rates drove demand for suburban housing. Lumber supplies tightened up and prices smashed records.
Environmental, Social and Corporate Governance
Exelon to break up; It’s separating its regulated utilities business from its power generation unit in the biggest breakup of a local company in nearly a decade.
Steve Daniels – Crain’s Chicago Business
Exelon said this morning it would split into two publicly traded companies, separating its regulated utilities business from its power generation unit in the biggest breakup of a local company in nearly a decade.
Energean Plans $500 Million Carbon Storage and H2 Facility
Paul Tugwell – Bloomberg
Project could help cut Greece’s carbon emissions by 4%; Funding for facility to come from EU’s pandemic recovery fund
Energean Plc submitted a proposal to the Greek government to build a carbon dioxide storage facility and a hydrogen plant in northern Greece close to its old Prinos oil field.
Carbon bulls will not wait on the EU; Prices for pollution allowances surge in anticipation of tighter emission standards
David Sheppard – FT
It’s unusual to find an asset class where almost every trader and analyst active in the sector agrees the price is set to rise. But that is the case in Europe’s carbon market, where analysts are projecting the price could more than double in the coming years.
Gender funds collectively underperform the wider market, data show; Research shows only one in nine funds globally outperformed over the past three years
Emma Boyde – FT
Friday will mark the end of what was supposed to be an inspiring story. The Legal & General Future World Gender in Leadership UK Index fund, known as the Girl fund, has failed to attract inflows and its remaining assets, which amounted to just £6.1m on February 23, will be folded into a broad LGIM “sustainable” index fund.
Odey’s Shrinking Hedge Fund Exposes a Pile of Illiquid Assets
Nishant Kumar – Bloomberg
Decline in assets puts spotlight on fund’s unquoted securities; Huge bets against bonds have fueled a 45% rebound this year
Crispin Odey’s long decline is exposing a new risk for the investors who are left: as his troubled money pool gets smaller, a larger slice is in hard-to-sell holdings. After a flood of redemptions and losses, the share of unquoted securities in his main fund jumped to almost 25% of its long equity holdings as of January, according to an investor document seen by Bloomberg. That’s up from 16% in November when Odey started disclosing the figures.
Cathie Wood Funds Whipsawed Amid Record Outflows, Rate Spike
Sam Potter – Bloomberg
Investors pulled $465 million from ARKK in one day, data show; Flagship ETF fell for third session as Treasury yields climbed
Cathie Wood’s main exchange-traded funds whipsawed on Wednesday as bond yields surged anew and data showed investors pulled a record amount of cash from the firm during this week’s tech selloff.
Deutsche Bank Targets 450 Jobs in First Round of Branch Closures
Steven Arons – Bloomberg
Deutsche Bank AG is seeking to eliminate between 400 and 450 jobs at one of its two retail networks in Germany as a result of branch closures announced last year. Germany’s largest lender expects an agreement on the cuts, which will affect its Deutsche Bank-branded branches in the country, in the next few weeks, according to people familiar with the matter. An exact number hasn’t been decided and the figure may still change as talks with works councils continue, they said, asking not to be identified because the negotiations are ongoing.
Toronto-Dominion Tops Estimates on Gain in Canadian Banking Unit
Kevin Orland – Bloomberg
Toronto-Dominion Bank earnings beat analysts’ estimates as a rebound in the Canadian economy helped drive profit up in the company’s domestic banking business.
Vanguard Charts a Narrow Path in China, Staking Its Future on a Fledgling Venture; The asset manager is betting that its partnership with China’s Ant will give it some reach over the roughly one billion users of its Alipay
Dawn Lim and Jing Yang – WSJ
Wall Street has long cultivated China’s biggest investment institutions to make inroads there. Vanguard Group is betting more singularly on the Chinese consumer.
Rich Asian Families Are Pouring Millions Into Impact Investing; I(x) Investments, a firm co-founded by Warren Buffett’s grandson, is among those turning East to put private capital to work addressing issues such as climate change.
K Oanh Ha – Bloomberg
Veronica Chou, the 36-year-old heiress to the Chou family fortune that helped build the Michael Kors and Tommy Hilfiger brands, says there’s more to life than pursuing the latest styles in the fashion world. So Chou, who grew up working in her billionaire family’s factories and later ran a business that helped introduce global fashion brands including Ed Hardy and Madonna’s Material Girl to China, has started her own line of sustainable clothing, Everybody & Everyone. Chou says she became interested in sustainable business after seeing firsthand China’s challenge with pollution and after the birth of her children. She now steers her family’s investments into technologies that combat climate change.
French Benchmark Yield Turns Positive For First Time Since June
James Hirai – Bloomberg
10-year government bond yield rises five basis points to 0.01%; Selloff comes as safe haven debt loses favor among investors
The yield on French 10-year bonds climbed above zero for the first time since June, adding to an intensifying global bond selloff. Government debt is losing favor as a safe haven for investors, as authorities step up the pace of vaccinations, offering hope that economies can escape the pandemic-induced gloom that has hovered over markets for the past year. Yields are also rising following a slower pace of bond purchases by the European Central Bank since the start of this year.
ECB Soothsaying Does Little for Bonds Caught in Global Rout
Carolynn Look and James Hirai – Bloomberg
Chief economist Lane says ECB monitoring longer-term yields; Euro-area sovereign bond selloff gathered pace after remarks
The European Central Bank’s pledges to fight back against unwarranted increases in bond yields are falling on deaf ears among investors. A selloff in bonds, which pushes up yields, was stemmed only temporarily on Thursday when ECB chief economist Philip Lane said officials will use the flexibility of their emergency bond-buying program to prevent any undue tightening in financial conditions. His colleague Isabel Schnabel gave a similar message earlier in the day.
Italy, Greece Caught in Bond Rout Pose ECB With Another Headache
John Ainger – Bloomberg
Greek bond yields set for biggest weekly rise since April; Italian debt unwinds Draghi’s relief rally as yields rise
When the bonds of Europe’s peripheral countries lead a selloff, it’s not normally a good sign. Greek securities are on course for their worst week since April, while Italy’s 10-year yield spread over Germany — a key gauge of risk in the region — climbed above 100 basis points for the first time since Mario Draghi became prime minister earlier this month.
U.K. Assets Are Rationally Exuberant, for Now; The pound, gilt yields and stocks are on a tear amid plans to lift lockdown. Investors should keep sight of the things that can go wrong.
Mark Gilbert – Bloomberg
U.K. Plc is off to a roaring start to the year. Its currency, bonds and shares are all topping the charts. So a lot is riding on the government’s accelerated plan to get the economy out of lockdown, both societally and financially. The risks associated with any misstep are high — and rising.
Chinese brokerage makes $1bn copper bet; Buying frenzy by Shanghai Dalu turbocharges price gain but brokers are wary of a correction
Neil Hume – FT
A Chinese brokerage has helped fuel the sharp rally in the price of copper since the end of the Lunar Year Holiday by amassing a $1bn bet in less than a week.
U.S. Farmers are Planting More Row Crops Than Ever; Planters wager that rallies in crop prices are just getting started
Kirk Maltais – WSJ
U.S. farmers are expected to plant a record amount of acres this year to take advantage of high agricultural prices after years of tough market conditions.
Squeezed by China’s Tariffs, Australian Farmers Cultivate New Markets; Barley exports are forecast to rise as the industry adapts, showing the limits of Beijing’s trade pressure
Rhiannon Hoyle – WSJ
Alan Sattler had been in his tractor for three hours one morning last May, sowing hundreds of kilograms of barley seeds in Western Australia’s arid wheat belt, when he received a text from his grain broker. China, his biggest market, was placing a punitive tariff on Australian barley.
U.K. Companies Say Brexit Paperwork Is Biggest Headache
Lizzy Burden – Bloomberg
British companies say new customs forms required following Brexit are the biggest hurdle to trading with the rest of the world, official data show. About 38% of exporters and 39% of importers identified form-filling as their main hurdle, according to a survey conducted by the Office for National Statistics. While half of exporters reported no difficulties trading internationally, the concerns on paperwork exceeded those about disruption at U.K. borders and transportation costs. The findings add to evidence that friction at ports is weighing on Britain’s ability to trade following after the nation left the European Union’s common customs system. Importers are warning they face even more red tape when new regulations come into force in April and July.
Brexit: NI leaders at odds on Irish sea border meeting
John Campbell – BBC News
A meeting of the EU-UK body overseeing the NI Brexit deal aimed at resolving issues with the Irish Sea border was “hugely disappointing”, First Minister Arlene Foster has said. But Deputy First Minister Michelle O’Neill said the meeting had been “constructive and pragmatic”. No breakthrough was reached on requests by the UK to extend grace periods. The grace periods mean checks and controls on goods going from GB to NI are not yet fully implemented. The first of the grace periods, which covers food and parcels, is due to end in April. The UK government, with the support of business groups, has asked the EU for an extension until 2023.
Five things shaping Britain’s financial rulebooks after Brexit
Huw Jones – Reuters
Britain is conducting a review of its financial rulebooks and policies to see how it can keep its 130 billion pound ($184 billion) finance sector competitive after Brexit left it largely cut off from the European Union. The government is due to issue papers in the coming days outlining its approach to financial technology (fintech) and capital markets, while further down the line it’s expected to propose changes to the funds and insurance sectors.
Post-Brexit trade: Boris Johnson calls for eat British fish campaign
Brian Wheeler – BBC News
Boris Johnson believes a campaign to encourage people to eat British-caught fish could help the industry combat post-Brexit disruption. The prime minister backed calls for a campaign in a video conference with Conservative MPs from coastal areas. He also promised to do more to address concerns about quotas and the ban on shellfish exports to the EU. Labour said it also wanted people to eat more British fish – but that in itself would not save the industry. Industry leaders have accused the government of being “in denial” about the scale of the problems facing it.
Brexit trade delays getting worse at UK border, survey finds
Lisa O’Carroll – The Guardian
Delays importing and exporting goods to and from the EU have worsened since Brexit was introduced at the start of the year and will result in stock shortages and price rises for consumers, according to a report. A survey of 350 supply chain managers found that two out of three had experienced delays of “at least two to three days” getting goods into the UK, compared with 38% who reported delays in a similar survey in January. A third of this group said the delays were “significantly longer” than in January, 28% said “slightly longer” and 15% reported delays of a similar length to January. Just 18% of those surveyed by the Chartered Institute of Procurement & Supply (CIPS) said they experienced no delays or fewer delays.
BOE’s Bailey Slams EU Stance on Swaps Clearing After Brexit
Silla Brush – Bloomberg
Bank of England Governor Andrew Bailey warned the European Union against demanding that euro derivatives are settled by clearinghouses inside the bloc, saying such a move would be a “very serious escalation” and that it would draw a U.K. response. The EU appears to be moving towards a policy of insisting such trades are located in the bloc, Bailey said during a hearing with U.K. lawmakers on Wednesday. A so-called location policy of forcing banks and dealers to move clearing business to the EU would be “very controversial,” Bailey said. “I have to say that that would be something we would have to, and want to, resist very firmly.”
How a Barbie Makeover Led to a Pandemic Sales Boom
Kelly Gilblom – Bloomberg
New skin tones, body types revive a classic toy for the 2020s; Doll joins streaming, video games as Covid lockdown favorites
One of the biggest consumer hits of the pandemic, alongside Netflix and the Nintendo Switch, is a 61-year-old doll once mocked as outdated and sexist. Long written off by many parents and kids — and criticized for promoting an unrealistic body image — Mattel Inc.’s Barbie generated its best sales growth in two decades in 2020. Years of planning and a bit of luck have turned the baby boomer of toys into a go-to item for millions of kids.
Oil Heiress’s $150 Million Art Collection Could Ease a Market Crunch; Anne Marion, who inherited one of the largest ranches in Texas, collected art for most of her life.
James Tarmy – Bloomberg
This Spring, Sotheby’s New York will auction off about $150 million worth of art and jewels from the estate of the late oil heiress Anne Marion, who died last year.