More power to ’em: Nodal acquired by EEX
Spencer Doar – JLN
The UK doesn’t want ICE to have Trayport. The LSE/Deutsche Boerse deal looks dead in the water. But in one neck of the exchange woods ó power ó all parties appear happy. Last Friday, the energy exchange EEX (part of the Deutsche Boerse empire) agreed to buy the U.S. based Nodal Exchange in an all-share deal, instantly turning the franchise global.
**JK: Our interview with Paul Cusenza about Nodal and EEX.
Playing With No Reserves
Sean Brown – YCharts
Working at a startup or a small company is a bit like drafting your fantasy football team with no reserves ó to win, you had better make sure the players on your roster aren’t prone to injury, have complementary skills and weaknesses, and ultimately are dependable in delivering results.
**JK: An interesting read from a firm that is doing interesting things in the data and analytics space.
Prepare for Market Beliefs to Be Challenged
Mohamed A. El-Erian – Bloomberg
Deeply ingrained beliefs can be hard to dislodge — and especially in markets when they have led to high investment returns over a prolonged period. That can encourage certain behaviors to last even in the face of contradictory indicators; and it may take a very large set of inconsistent data for behaviors to change.
**JK: People love to talk about change, but rarely do.
Eight Fossil Fuel Majors Seen Polluting as Much as the U.S.
Jess Shankleman – Bloomberg
Aramco, Exxon among emitters of fifth of industrial emissions; CDP calculates direct and indirect contribution to pollution
Eight of the world’s largest oil companies are responsible for as much of the climate-damaging pollution spewed into the atmosphere as the entire U.S., according to a study by a London-based researcher.
**JK: The challenge of our time.
A $2.5 trillion asset manager just put a statue of a defiant girl in front of the Wall Street bull
Rachael Levy – Business Insider
The world’s third-largest asset manager installed a bronze statue of a defiant girl in front of Wall Street’s iconic charging bull statue on Tuesday morning as part of its new campaign to pressure companies to add more women to their boards.
**JK: I’m not sure a statue is gonna do it.
Tuesday’s Top Three
A little of this and that for yesterday’s top stories. Our top piece was Institutional Investor’s
Wall Street’s Nerds – The World’s Most Powerful Trading Executives. Second went to the Rosenthal Collins Group Appoints Matthew Straight CIO announcement. And third went to Vanity Fair’s piece on Bridgewater, What in God’s Name Is Happening at the World’s Largest Hedge Fund?
95,135,958 pages viewed; 22,372 pages; 204,194 edits
Dismantling Dodd-Frank May Have to Wait; Republicans’ big idea to keep banks safe is too loose for Democrats and too strict for banks.
Peter Coy – Bloomberg
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 looked like a goner when President Donald Trump was elected in November. During the campaign, Trump repeatedly blasted the law as a loan-killing, anti-job disaster. His party is filled with lawmakers who are even more opposed to it than he is. “On behalf of all hardworking, struggling Americans, I will not rest, and the House Financial Services Committee will not rest” until Dodd-Frank is repealed, committee Chairman Jeb Hensarling of Texas vowed last May.
How the Euro Could Break Upóor Be Saved
Ian Wishart, Mira Rojanasakul and John Fraher – Bloomberg
Talk about the breakup of the euro is fashionable again. With populists such as Marine Le Pen trying to storm the establishment and the popularity of the single currency in decline, executives and investors, including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, say nothing can be ruled out. At the same time, the euro has already survived a number of scares since its inception in 1999, with the political and economic elites proving willing to do whatever it takes to support the currency.
UK’s May defeated as lawmakers demand power to reject final Brexit terms
William James – Reuters
Britain’s upper house of parliament voted on Tuesday to give lawmakers more power to reject the final terms of the country’s exit from the European Union, ignoring pleas from Prime Minister Theresa May’s government not to hamstring their negotiations.
Corzine Blamed for MF Global’s Demise in PWC’s Trial Defense
Bob Van Voris – Bloomberg
Accounting firm defending $3 billion claim it aided meltdown; Defunct brokerage says PwC provided faulty accounting
PricewaterhouseCoopers LLP is putting the blame on MF Global Holdings Ltd.’s former chairman Jon Corzine for the New York brokerage’s collapse in 2011.
World Federation Of Exchanges & Five Partner Organisations Bring Together 43 Stock Exchanges To ‘Ring The Bell For Gender Equality’
In total, 43 stock exchanges around the world will ring opening or closing bells between 6-10 March 2017, to celebrate International Women’s Day 2017 today, Wednesday 8 March 2017.
Where Women Rule Finance and Men Think Banking Is Boring
Anuchit Nguyen – Bloomberg
Thailand beats the U.S. for having women in top finance jobs; Women flock to accounting, propelling them to finance careers
As one of four presidents at Thailand’s biggest lender, Kasikornbank Pcl, Kattiya Indaravijaya often conducts interviews for senior positions. The job candidates are impressive. And almost always, they’re women.
Mnuchin’s Treasury Staff Picks Stall as White House Scrutinizes Tweets
Robert Schmidt and Saleha Mohsin – Bloomberg
Trump aides say Mnuchin’s picks too liberal or too Wall Street; Goldman’s Donovan remains under consideration for deputy job
Steven Mnuchin’s picks for the top ranks of the U.S. Treasury are stalled due to resistance from White House aides, including one recruit whose Twitter account was scrutinized for potential criticism of Donald Trump, according to people familiar with the matter.
From Trading Floor Into App Store
Carsten Kengeter – Deutsche Bˆrse
The looming Brexit is blowing the winds of change over Frankfurt as a financial centre. We all have to be prepared for a whole new world, in which the United Kingdom and the continent of Europe are no longer walking at the same pace.
Exchanges, OTC and Clearing
SGX mandates minimum allocation of Mainboard IPOs to retail investors
Singapore Exchange (SGX) will mandate all Mainboard IPO companies to allocate to retail investors, at least 5%, or S$50 million, whichever is lower, of their offer size.
Singapore Exchange Proposes Bringing Back Lunch Breaks, Widening Bid Sizes
Andrea Tan – Bloomberg
Exchange to consult public on one-hour lunch intermission
SGX also mandates allocating IPO shares to retail investors
Singapore Exchange Ltd., which runs the city’s stock market, is proposing to bring back a lunch break and boost minimum bid sizes as it seeks to boost trading.
SGX consults on proposed equities market structure adjustments
Singapore Exchange (SGX) is consulting the public on proposed adjustments to the equities market structure aimed at addressing market conditions, while balancing the diverse objectives and interests of different segments of participants in the market ecosystem.
Why Fed Funds Futures Are More Popular Than Ever
Agha Mirza – OpenMarkets, CME Group
Fed Chair Janet Yellen remarked March 3 that a Fed Funds rate increase is “likely appropriate” at the FOMC’s March meeting. This sent market expectations of a rate rise soaring to over 80 percent, from 30 percent earlier in the week, according to CME Group’s Fed Watch tool.
Women in ETFs Opens Trading in Celebration of International Women’s Day
The Canadian chapter of Women in ETFs (WE) will tomorrow open trading at Toronto Stock Exchange (TSX) to acknowledge International Women’s Day, a global day celebrating the social, economic, cultural and political achievements of women.
STOXX licenses the next generation of low carbon indices to Scandinavian pension funds
STOXX Ltd., the operator of Deutsche Boerse Group’s index business, and a global provider of innovative and tradable index concepts, today introduced the STOXX Climate Impact and STOXX Climate Awareness Indices. This next generation of low carbon indices includes the CDP climate change scoring methodology which evaluates companies based on their progress in the transition towards a low carbon economy.
On March 16, “Day of the Share”; Private investors can buy DAX shares and DAX ETFs free of charge
For the 16th of March, Deutsche Bˆrse is calling for the 3rd “day of the share”. With the event, Germany’s leading stock market operator and the banks involved want to increase the importance of the stock as a tool for pension provision in the population. Trading on the Frankfurt Stock Exchange will be opened on this day with the traditional trading bell.
Next-Generation Market Access
Drew Shields – Trading Technologies
In my last post, I described the FIX solution provided by TT as “FIX-as-a-service” (FaaS). Indeed, one of the differentiators of TT is that it is a suite of professional trading services delivered using the software-as-a-service (SaaS) model: services that are available from anywhere, on demand, without the need for any pre-allocation of infrastructure or deployment of software.
Equinix to Buy Verizon Assets with Public & Notes Offerings
Equinix Inc. recently announced its plan of commencing concurrent public offerings of $1.75 billion of its common stock and $1.125 billion in principal amount of its senior notes due 2027. Apart from this, the company will provide a 30-day option to underwriters of equity offerings to purchase up to an additional $262.5 million of its common stock. Therefore, the company will be raising $3.138 billion in total with the equity and senior notes offerings.
AgriCharts Brings Responsive Websites and Design to Agribusinesses
Today, AgriCharts, a division of Barchart.com, Inc. and a leading provider of information and technology solutions for agribusinesses, announces the release of responsive website hosting and design services across desktop, mobile and tablet devices to its product suite.
The UK Struggles to Fill FinTech Positions
Rebecca Campbell – CryptoCoinNews
As the global FinTech hub you would think that the U.K. has no problem when it comes to recruiting new talent for its financial technology sector. Yet, it seems that the country is experiencing a skills shortage that is seeing many jobs going unfilled.
Dalton Street Capital upgrades trading system with FlexTrade
Hayley McDowell – The Trade
Dalton Street Capital in Sydney has upgraded its futures, equities and FX trading through implementing FlexTrade’s EMS system.
Swiss Exchange to use LSE’s TRADEecho service
Futures & Options World
The new service covers existing LSE member firms, as well as Boat clients
Trump’s H1-B Squeeze Threatens U.S. Tech Leadership
Leonid Bershidsky – Bloomberg
It’s hard to calculate the effect of H-1B visas — which the U.S. government is now making it harder to obtain — on the U.S. technology sector, but it’s likely rather large. If restricting H-1B visas is a Trump administration goal, and there are reasons to believe that is the case, then it’s time to imagine a world in which the U.S. has lost its technological leadership.
Going Dutch: What Elections in the Netherlands Could Mean for Markets; Geert Wilders, dubbed the ‘Dutch Trump,’ is expected to do well at the polls next week
Christopher Whittall – WSJ
Even as investors fret over the French election, they seemed relaxed about another national poll where a euroskeptic candidate could do wellóthe Netherlands. Next week the Dutch go to the polls in the first of a series of high stakes European elections.
Le Pen Says Her New Franc Would Fluctuate on Currency Markets
Gregory Viscusi and Helene Fouquet – Bloomberg
Presidential candidate has changed views on handling euro exit; Le Pen says weaker franc would help competiveness with Germany
Presidential candidate Marine Le Pen has repeatedly said the euro is bad for France but she hasn’t always been consistent about what she’d do about it.
CFTC Keeps Doing Business With Only Two Commissioners
Richard Hill – Bloomberg BNA
President Donald Trump’s decision to withdraw a pair of pending CFTC nominations isn’t likely to incapacitate the agency, thanks in part to a good working relationship between the two remaining commissioners.
Exclusive: Mexico cancels sugar export permits to U.S. in trade dispute
Adriana Barrera – Reuters
Mexico has canceled existing sugar export permits to the United States in a dispute over the pace of shipments, according to a letter seen by Reuters, in a flare-up industry sources said could temporarily disrupt supplies.
Report accuses Caterpillar of tax fraud to prop up its stock price; No charges yet; independent report says fraud was deliberate, New York Times reports
Mike Murphy – MarketWatch
A new report commissioned by the federal government accuses Caterpillar Inc. of using tax and accounting fraud to prop up its stock price, according to a report late Tuesday.
London-Based Regulators in EU’s Sights for Post-Brexit
Ian Wishart – Bloomberg
Drug, bank regulators seen relocating after U.K. leaves bloc; Governments jostle to host EMA and EBA, seeing jobs, prestige
The European Union insists on no cherry-picking by the U.K. in the coming Brexit negotiations, but many of the remaining 27 governments are jockeying for some possible plums for themselves.
CFPB director Richard Cordray sets his sights on big data at banks
Maria Lamagna – MarketWatch
If you think the only information your bank knows about you is your balance, think again.
SEC: Ponzi scheme extended to Harry Potter, Metallica, other shows
Kevin McCoy – USA TODAY
An alleged Ponzi scheme that offered bulk purchase and resale of tickets to the Broadway blockbuster Hamilton and concerts by singer Adele lured investors with similar offers for a Harry Potter play and other high-demand shows, federal investigators charged Tuesday.
Investing and Trading
A Short History: How Bitcoin Reached Parity With Gold
Jeff Desjardins – Visual Capitalist
Would you rather have one bitcoin, or a single ounce of gold? The answer used to be obvious. Even at the climax of the legendary 2013 rally, bitcoin was never able to reach unit-for-unit parity with gold.
Stocks Have Tripled Since Crisis, but Low Rates Are Still Squeezing Savers; Some retirees opt for higher-risk investment strategies to make sure they are OK for their remaining years
Corrie Driebusch and Aaron Kuriloff – WSJ
Stocks are hitting record after record as investors bet the U.S. economy will soon be booming. But that hasn’t changed the woeful environment for some retirees.
The Surprising Winners From the Rise of Passive Investing? Women
Elena Popina – Bloomberg
Female execs more likely to run passive funds than active ones; Traders moved $1 trillion from active to passive funds in 2016
On a chilly Thursday afternoon last month, several dozen women gathered at the Flywheel Sports spinning studio in Manhattan’s Chelsea neighborhood, donned tights and sneakers, and started pedaling.
Ray Dalio Stepping Down as Co-CEO at Bridgewater
Bloomberg’s Erik Shatzker reports on Jon Rubinstein’s departure from Bridgewater amid a shakeup at Ray Dalio’s hedge fund.
Wall Street CEO’s most notorious critic not ready to shut up
Kevin Dugan – NY Post
Wall Street’s most notorious critic of bank chief executives is not ready to shut up. Mike Mayo, the bank analyst who’s taken on some of the world’s most powerful CEOs during a 25-year career, lost his job last month when Hong Kong-based firm CLSA shuttered its research department.
Apollo Seeks $20 Billion by May for New Buyout Fund
Melissa Mittelman and Sabrina Willmer – Bloomberg
Pool could be largest raised for buyouts post financial crisis; Firm’s 2016 spending spree included ADT, Outerwall, Rackspaces Apollo Global Management LLC is seeking $20 billion for its latest global buyout fund, people with knowledge of the process said, setting its sights on the biggest pool of capital for private equity deals since the financial crisis.
Manager Outperformance: Is it Luck or Skill?
Aye Soe – S&P Dow Jones Indices
Over the years, we frequently hear from our SPIVA and Persistence Scorecard readers that they have found their star manager or their own Warren Buffetósomeone who can successfully beat the benchmark repeatedly. Based on our 15 years of publishing the SPIVA U.S. Scorecard, we know that, on average, around 20% to 30% of domestic equity managers successfully outperform the benchmark in any given year. We do not know, however, whether the same groups of managers outperform the benchmark over time. At the same time, the Persistence Scorecard informs us that the likelihood of a top-quartile manager maintaining the same success over three consecutive years is less than a random coin toss.
A Radical About-Face for Battle-Scarred Barclays: Take More Risk; New corporate-and-investment-banking chief Tim Throsby is looking to reinvigorate unit
Max Colchester – WSJ
Barclays PLC’s new corporate-and-investment-banking chief, Tim Throsby, recently toured his unit spreading a message that staff haven’t heard for years: Don’t be afraid to take more risk
BNY Mellon announces new European markets head
Joe Parsons – The Trade
BNY Mellon has named Dan Watkins as the new head of its markets business for Europe, Middle East and Asia (EMEA).
Central Banks Ratchet Up Foreign-Currency Reserves; ‘External reserves are a form of insurance for sovereigns against crisis and defaults,’ says an analyst
Carolyn Cui and Brian Blackstone – WSJ
Central banks around the world are increasing foreign-currency reserves, highlighting the fragile underpinnings of the global economic recovery despite a bullish mood in financial markets.
All but one major bank oppose move to name executives involved in breaches
Gabrielle Chan and Paul Karp – The Guardian
Three of Australia’s big four banks have opposed parliamentary recommendations that senior executives should be automatically named for breaches affecting customers. The chief executive of Westpac, Brian Hartzer, was the final of the big four bank bosses to appear before the house standing committee on economics reviewing past behaviour.
China Bitcoin Withdrawals on Hold, Awaiting Regulators’ Approval; Largest exchanges continue suspensions as they upgrade systems to meet PBOC requirements
Chao Deng – WSJ
China’s three largest bitcoin exchanges said their suspensions on withdrawals would continue indefinitely as they upgrade systems to meet regulators’ requirements.
Opec decides to go on speaking terms with hedge funds; Cartel chief to meet managers once denounced as speculators who distorted oil market
Gregory Meyer – FT
Opec once decried hedge funds as a malign influence on the oil market. Now it is seeking their opinion.
Singapore and Dubai sign Cooperation Agreement to foster fintech entrepreneurship
Monetary Authority of Singapore (MAS) announced that it has signed a Cooperation Agreement (CA) with Abu Dhabi Global Market (ADGM) in a move to foster the fintech entrepreneurship and support innovation in financial services in both the countries.
Britain plays with fire over Brexit
Martin Wolf – Financial Times
Later this month, Theresa May, British prime minister, will start the most significant negotiation the country has engaged in since it negotiated membership of the European Economic Community in the early 1970s. This time, the country will repudiate its membership of what is now the EU, by triggering Article 50 of the Lisbon treaty. Whether one was in favour of leaving or of remaining, one has to hope Mrs May gets a good deal.
Brexit vote provides an unexpected upside for law students; Those from all over the world are studying EU law to get ahead in the race for jobs
Jonathan Moules – FT
Not many academics are overjoyed about Brexit. But for Anu Bradford, it has provided a big opportunity.
Why Wall Street is like a used car lot
Steven Pressman, Professor of Economics, Colorado State University – The Conversation
In 1792, before there was the internet, the telephone or even the telegraph, securities trading began on Wall Street. A small group of dealers, who met under a buttonwood tree on Wall Street, agreed to trade only with each other and established a minimum fee for their service. At that time, most trading involved the buying and selling of government bonds.