Observations & Insight
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Crypto Options Trading on Solana Has Mostly Fizzled. A New DEX Has a Plan to Change That
Danny Nelson – CoinDesk
Even for traditional finance pros, talk of “portfolio margining” is the kind of thing that’ll make most eyes glaze over. And yet it’s vital plumbing that helps make conventional markets work. A DeFi project building here at the MtnDAO hacker house in Salt Lake City is bringing the concept to cryptocurrency options, hoping that’ll make trading the derivatives on the Solana blockchain more appealing.
Tech Woes Shake Stocks Ahead of Pivotal CPI Data: Markets Wrap
Rita Nazareth – Bloomberg
Stocks retreated as a downbeat outlook from another giant chipmaker added to recession fears, with many traders taking risk off the table before Wednesday’s key inflation data.
A rally that drove the S&P 500 up more than 10% from its June lows hit a wall amid a fourth straight day of losses. The Nasdaq 100 underperformed after Micron Technology Inc.’s warning provided more evidence of the collapsing demand for chips. All 30 companies in the Philadelphia Semiconductor Index fell, with the gauge down 5%. The surge in meme shares like Bed Bath & Beyond Inc. and GameStop Corp. sputtered.
Stock Market Outlook: BlackRock Says Get Defensive for Stagflation
Carla Mozée – Markets Insider
Risks are rising that the world’s largest economy will contend with stagflation, and investors should play defense in that scenario, BlackRock said Tuesday.
“[We] think that slower growth will translate into a slower pace of earnings growth ahead, something that is not yet priced into the equity markets,” Gargi Chaudhuri, head of iShares Investment Strategy for the Americas at BlackRock, said in a note.
Inflation Hasn’t Peaked According to 50% of Investors Surveyed
Jennifer Sor – Markets Insider
Nearly half of investors say they’re stressed out over inflation and that it has still not peaked, according to a survey by State Street Global Advisors, signaling low morale as markets digest signals that the US may be headed into a recession.
About 47% of investors told the research firm that inflation was causing them stress or anxiety, State Street reported. And, 49% of investors said they didn’t believe inflation had peaked yet, showing some pessimism ahead of July’s Consumer Price Index reading due out on Wednesday.
US Inflation Could Drop to 5% by October As Gasoline Falls: Wells Fargo
Harry Robertson – Markets Insider
Wells Fargo has said US inflation could well drop as low as 5% in the next two to three months after a sharp fall in energy prices.
US inflation unexpectedly surged to 9.1% in June, but since then oil and gasoline prices have fallen sharply as fears of an economic slowdown have taken hold. Gas topped $5 a gallon in June, but stood at $4.033 Tuesday.
The stock market risks ‘swooning again’, so BlackRock prefers credit over equities
Christine Idzelis – MarketWatch
BlackRock, the world’s largest asset manager, likes investment-grade credit more than stocks as it sees “a new market regime with higher volatility taking shape,” according to a note Monday from strategists at the firm’s investment institute.
Investment-grade credit can “weather a significant growth slowdown whereas equities don’t look priced for this risk,” the strategists said in the note. “Yields look more attractive than at the start of the year,” they said, “making for improved valuations and a larger cushion against defaults.”
There are reasons to be optimistic about the US economy
Blair Effron – Financial Times
The US economy is slowing down. The main dispute among economists is whether we are in for a soft landing or a hard one, and the pessimistic perspective has dominated headlines.
But while it is clear that we are in for a difficult period ahead, there is also reason to believe that the American economy is primed for a renewed period of expansion in the years that follow. Most observers tend to view today’s economic challenges through the prism of past downturns. But the US economy operates differently today than it did 40, or even 14, years ago.
First single-bond ETFs look set to revolutionise access to Treasuries
Steve Johnson – Financial Times
The first single-bond exchange traded funds in the world have listed on the Nasdaq exchange in a development that could revolutionise how some traders access US Treasuries.
The launches follow hot on the heels of the first single-stock ETFs in the US and illustrate a growing trend for vehicles to target ever more specific exposures, eschewing the diversification at the heart of the traditional fund structure.
MEMX Gains SEC Approval to Trade Options
U.S. Options Exchange MEMX Options to Launch in 2023
MEMX, a market operator founded by a diverse group of participants to benefit all investors, today announced that the Securities and Exchange Commission (“SEC”) has approved MEMX’s rule filing to launch a platform for trading listed options. The U.S. options exchange, MEMX Options, will leverage the strengths of MEMX’s data-centric exchange architecture and state-of-the-art infrastructure. The exchange will use a price time-model and is expected to launch in early 2023.
Market Participants Can Now Gauge Volatility in Real-Time with CME Group’s Live Streaming CVOL Indexes
CME Group, the world’s leading derivatives marketplace, today announced that its suite of CME Group Volatility Indexes (CVOL) are now streaming in real-time, allowing investors to keep an up to the minute pulse on what nearly every major market is signaling about future risk.
SEOCH Reserve Fund Variable Contributions
Please be advised that The SEHK Options Clearing House Limited (SEOCH) has re-calculated the Reserve Fund Requirement pursuant to SEOCH Rule 407 and Clearing House Procedures. The new market total Variable Contribution (“VC”) of HK$635 million after the recalculation will be shared by all the SEOCH Participants based on their daily average total margin requirement and net premium paid during the period from 13 May 2022 to 8 August 2022 in accordance with Chapter 11 of the Operational Clearing Procedures for Options Trading Exchange Participants of SEOCH.
Regulation & Enforcement
BitMEX Executive Pleads Guilty to Violating Anti-Money Laundering Act
Elizabeth Napolitano – CoinDesk
A high-ranking employee at off-shore, crypto derivatives exchange BitMEX has pleaded guilty for violating a U.S. federal anti-money laundering law, the United States Attorney for the Southern District of New York announced Monday. Gregory Dwyer, who formerly served as BitMEX’s head of business development, pleaded guilty to violating the Bank Secrecy Act for “failing to establish, implement, and maintain an anti-money laundering program” at BitMEX.” .
How to Invest With Inflation Set to Peak: PineBridge
James Faris – Business Insider
Investors are on the edge of their seats ahead of the pivotal inflation report on Wednesday morning. A low reading should add fuel to the furious 13% market rally that’s been ongoing since mid-June, while a higher reading could send stocks tumbling.
Although everyone can agree that this latest inflation reading is important, besides that there’s not a consensus on where markets are heading.
These 3 ETFs Offer Yield-Hungry Investors Some ‘Options’
Mark Abssy – TheStreet
As we move through this period of uncertainty, investors have been shifting their view from being “growth” oriented to being focused on “total return,” which is the classy Pooh Bear way of saying, “I’ll take what I can get.”
Total return, of course, refers to the combination of price return and income. From an equity perspective, income comes from dividends but for some issuers, income has increasingly come from option premium in the form of covered call or buy-write strategies. Issuer Global X has some funds that I thought would be interesting to review, if only to discuss basic buy-write strategies and also some of the math behind yield calculations. Let’s check out three funds here.
Stocks Brace For Impact
Michael Kramer – Investing.com
The S&P 500 had risen by nearly 1% at the start of the day yesterday, but by day’s end, all the gains were gone, with the index finishing 12 bps. There are now two bearish trading patterns in the index that I am noticing, given yesterday’s weak close. The first is the rising wedge pattern, which I have repeatedly pointed out. The second is the 2b topping pattern that appears to be present in the S&P, Dow, and QQQ ETF.
Watch You Can Never Time the Market Well: Jenny Johnson
Franklin Templeton CEO Jenny Johnson says investors should stay in the market, even during volatile times. She’s on “Bloomberg Wealth with David Rubenstein.”