Dr. Strangelove, or How I Learned to Love Markets

Jan 30, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Bloomberg reported that Ray Bradbury has become the president of ADM Investor Services this month, during the shake-up of ADM management after the firm disclosed it had suspended its CFO. John P. Stott, the previous president of ADMIS, was promoted to group vice president CFO Ag Services and Oilseeds at ADM.

Flutter Entertainment Plc (NYSE: FLUT), which owns 15 global gaming brands including FanDuel, Sportsbet, and PADDYPOWER LIMITED, among others, inaugurated its U.S. listing and rang the opening bell on NYSE yesterday morning “punctuated by the flag-waving four-time Super Bowl Champion Rob Gronkowski, trailed by NYSE President Lynn Martin, Flutter CEO Peter Jackson, a raucous marching band and a chorus of company employees,” Chief Communications Officer, ICE and Head of Corporate Affairs, NYSE Josh King reported on LinkedIn.

Abaxx Technologies Inc. today announced the successful closure of Abaxx Singapore’s equity private placement, raising US$27,323,013 in gross proceeds. The offering included preferred shares for strategic partners like Cboe, TLW, and Traxys, along with Ordinary Shares and Warrants. This funding will support the launch and growth of Abaxx Exchange and Clearinghouse, facilitating smarter markets for energy transition-related commodities in Singapore. Nancy Seah, CEO of Abaxx Exchange, expressed her gratitude for the support of these strategic partners.

The World Federation of Exchanges (WFE) announced its key priorities for 2024, aiming to enhance corporate governance across the financial ecosystem. The WFE will also focus on ensuring the stability of central clearing, addressing issues related to procyclicality, recovery and resolution, and transparency in capital rules. Additionally, the WFE plans to take a leading role in promoting ESG standards and reporting frameworks, similar to the creation of the WFE Green Equities principles. Furthermore, the organization aims to expand its educational initiatives, including the Market Infrastructure Certificate, and explore emerging technologies, such as crypto market design and AI’s role in regulated exchange markets.

CME Group reported it achieved all-time high average daily volume and open interest records in 2023 for its Mexican peso and Brazilian real FX futures contracts, with increased client participation contributing to deeper liquidity and enhancing the CME’s role as a primary source of price discovery in the broader FX market.

Jason Morris, a trading technology industry veteran and former president of Enfusion, has been appointed president of LiquidityBook, a provider of cloud-native buy- and sell-side trading solutions.

Today the Cboe is holding a 60-minute webinar titled “New Report! Buffer Protect Indices and Risk Reduction,” looking into a white paper on Cboe Buffer Protect Indices for Smoother Returns. It features Oleg Bondarenko, director of the International Center for Futures and Derivatives at the University of Illinois Chicago; Dmitriy Muravyev, associate professor of finance at Michigan State University; Bill O’Keefe, director of derivatives sales at Cboe Global Markets; and Matt Moran, head of index insights at Cboe Global Markets. Register HERE.

An article co-authored by CME Group’s Adila McHich and Premia Research’s Hilary Till on the topic of oil-Indexation and natural gas pricing was referenced by S&P Global Insights. The updated version of their article was also published in September 2023 by Bayes Business School’s CID (“Commodity Insights Digest”). You can access the article HERE.

Euronext’s 2024 IPOready program for executives preparing for initial public offerings (IPOs) has launched. It provides valuable insights and networking opportunities, with 160+ companies from 15 European countries participating. Since 2015, more than 900 companies have joined this pre-IPO training program.

Jim Esposito, the co-head of Goldman Sachs’ global banking & markets unit who announced he was leaving the bank after 29 years last week, has published a reflection of 2023 and his career on LinkedIn.

The veteran CBOT trader Tommy Grisafi has been filling in for Scott Shellady in the studios of RFD-TV in Nashville, TN to shoot the “Cow Guy Close.”

Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL

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The six-state coalition Great Lakes ReNEW was named one of 10 inaugural Regional Innovation Engines by the National Science Foundation (NSF). A project of Current, Chicago’s water innovation hub, Great Lakes ReNEW could now bring up to $160 million to the Great Lakes Region to accelerate technologies to extract valuable minerals and toxic forever chemicals from the region’s wastewater. Read the announcement and watch a short video HERE. ~SAED

Our most read stories from our previous edition of JLN Options were:
Adapting to climate change in central clearing: risks, environmental footprint and enabling transition from Eurex.
Hedge funds lap up China stocks at fastest pace in 5 years – Goldman from Reuters.
A Popular Option Trade Returns in 2024 as Hedge Funds Short Volatility from The Tokenist. ~JB

Subscribe to the JLN Options Newsletter HERE (it’s free).

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IMX CEO Jim Plante Discusses the Path Forward After CFTC Approval
JohnLothianNews.com

Jim Plante, the CEO of IMX, in a recent interview with John Lothian News, discussed the next steps for the healthcare-focused futures exchange after receiving approval from the CFTC. IMX’s target launch is in the second quarter of 2024, and Plante said the next challenge is the ongoing process of onboarding futures commission merchants to the exchange. IMX is also working on finalizing its initial product offerings, which will undergo regulatory approval.

Watch the video »

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Futures Discovery: Fundamentals of Margin Calls
JohnLothianNews.com

In episode 5 of Futures Discovery, we’re peeling back the layers of the ever-important world of margin calls-a topic that can shape the flow of your futures trading journey. In this episode, we’re not just scratching the surface; we’re delving deep into the fundamentals of margin calls. It’s not just about numbers on a screen; it’s about deadlines, volatility, and potential lifelines.

Watch the video »

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Ticket prices for this year’s Super Bowl might even make a billionaire like Taylor Swift blush
Jordan Valinsky – CNN
Ticket prices for this year’s Super Bowl matchup between the Kansas City Chiefs and San Francisco 49ers might even make billionaire Taylor Swift blush. As of Monday, the February 11 game is the most expensive Super Bowl on record, according to TickPick. The average price is hovering around $9,800, which is 70% more expensive than last year’s big game.
/jlne.ws/48RHscl

***** The big questions are, Will Taylor Swift make it to the game from a gig in Japan? and how is she going to swing the election to Joe Biden? Evidently that is the latest right-wing conspiracy theory.~JJL

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Encyclopaedia Britannica publisher files for US IPO
Reuters
Britannica Group, the company behind the 250-year-old Encyclopaedia Britannica and the Merriam-Webster dictionary, said on Monday it had confidentially filed for an initial public offering (IPO) in the United States. The number of shares to be sold in the IPO and the price range have not been determined, Britannica said.
/jlne.ws/42fImNv

****** Doug Ashburn’s employer is going public. Does he get another bite at the apple?~JJL

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Reddit Flirts With Wall Street and Potential Disaster; Public markets are where good social networks go bad. Can the last big holdout survive an IPO?
Dave Lee – Bloomberg
The earliest mention I can find of Reddit Inc.’s ambitions for an initial public offering comes from a Variety report in 2017 – the online community’s co-founder and chief executive officer, Steve Huffman, told a conference audience that taking the site public was the only “responsible choice” but that the “time frame was pretty far out.” More than six years later, with an IPO finally looking imminent, he was certainly right on that second point. That first one, however, is still in doubt. There’s a reason the social network has taken so long to go public: There’s a good chance it might all fall apart.
/jlne.ws/3vSGka6

****** “Things Fall Apart” was one of my favorite books when I was in school.~JJL

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Monday’s Top Three
Our top read item on Monday was Adapting to climate change in central clearing: risks, environmental footprint and enabling transition, from Eurex. Second was Chinese regulators curb short selling as market downturn deepens, from the Financial Times. Third was Banker Bonuses Are Down Again-but It Stings This Time, from The Wall Street Journal.

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Lead Stories

Dr. Strangelove, or How I Learned to Love Markets; There’s an awful lot of talk about ‘World War III’ at the moment. A look at markets could help de-escalate it.
John Authers – Bloomberg (Opinion)
World War III Is Drawing Near…Is Dr. Strangelove really back with us? The attack in Jordan that left three US soldiers dead, apparently perpetrated by Iran-backed forces, has ratcheted global fears to a new level. Retired Adm. James Stavridis’s column for Bloomberg Opinion makes clear that a US response of some kind is now unavoidable. Former President Donald Trump has proclaimed on social media that “we are on the brink of World War III.”
/jlne.ws/3vW645o

ADM Shuffles Leadership of Its Crop and Biofuel Trading Unit
Michael Hirtzer – Bloomberg
Archer-Daniels-Midland Co. is making leadership changes at its legacy crop-trading business. Ray Bradbury, who has worked at the company for about two decades, became president of ADM Investor Services this month, according to a company website and people familiar with the moves. He previously was president of ADM’s renewable fuels solutions unit and responsible for global commodity risk management.
/jlne.ws/49esi0J

‘Mother of All Data Breaches’ – 26 Billion Records Leaked, Users of LinkedIn, X, Venmo And More Panic Over Increased Cybercrime Risk
Caleb Naysmith – Benzinga
If you use a computer, your data likely got leaked in what researchers have called the mother of all data breaches. Twenty brands have had over 100 billion leaked records, with the largest being Tencent’s 1.5 billion. Brands more familiar to Western consumers such as LinkedIn, X, Venmo, Canva, Apollo and Adobe have also been hit. Cybernews Head of Security Research Mantas Sasnauskas summed up the scale of the shocking breach, saying “Probably the majority of the population have been affected.”
/jlne.ws/3Uk4Smg

ION Markets Delays $1.8 Billion Leveraged Loan Sale to Friday; Commitments on the leveraged loan deal originally due Tuesday; Transaction would lower rate on existing debt, pay dividends
Jeannine Amodeo and Giulia Morpurgo – Bloomberg
ION Markets, a unit of Andrea Pignataro’s ION Group, has extended the deadline for a new $1.825 billion leveraged loan sale by three days, giving investors more time to decide whether to participate in the deal, according to a person with knowledge of the matter. The delay comes at a time when borrowers have generally seen strong demand for new loan sales. It brings the official deadline for investors to submit their orders to Friday at 10:00 a.m., New York time, said the person, who asked not to be identified discussing a private transaction.
/jlne.ws/48aAFtv

ICE global and commodities derivatives open interest hits record high
Reuters
Intercontinental Exchange (ICE.N), opens new tab said on Monday that its global futures and options markets along with its derivatives in the commodities and energy segments logged all-time high open interest last week. ICE, which operates various stock and futures exchanges, said its global futures and options markets reached a record open interest of 87.2 million contracts on Jan. 25. Its commodities futures and options markets hit record open interest of 61.5 million contracts.
/jlne.ws/3SEt1mg

Financial Engineering for Green Energy; Also AI and competition, and a Byju’s rights offering.
Matt Levine – Bloomberg
The way that the US government encourages a lot of green energy projects is by giving them tax credits. If you build a power plant that runs on certain sorts of renewable resources, the Internal Revenue Service will give you some money – call it 0.3 cents per killowatt-hour1 – for generating that power, which you can use to reduce your taxes. That is a reasonably safe stream of cash flows. Not totally safe – your plant could burn down, prices could collapse or costs could rise so much that it is no longer economical to run it, the tax code could change – but broadly speaking you can estimate how much power the plant will produce per year and then multiply that by 0.3 cents to get a fairly predictable annual tax credit.
/jlne.ws/3SDtwgL

Chicago man arrested in massive $400 million ‘SIM swap’ scheme allegedly targeting company’s cryptocurrency accounts
Jason Meisner – Chicago Tribune
A Chicago man has been arrested on federal charges filed in Washington, D.C., alleging he participated in a sophisticated “SIM swap” scheme that allegedly siphoned $400 million in virtual currency from a single company and millions more from other individual victims. Robert Powell was arrested quietly last week and made an initial appearance at the Dirksen U.S. Courthouse in Chicago, where prosecutors moved to have him held without bond pending transfer to U.S. District Court in Washington, court records show.
/jlne.ws/42m6gqs

Betting group Flutter proposes moving listing to New York; Shift would be latest blow to FTSE as Paddy Power owner eyes ‘access to much deeper capital markets’
Daria Mosolova and Michael O’Dwyer – Financial Times
Flutter, the gambling group that owns Paddy Power, is planning to quit the UK’s FTSE 100 index by moving its primary listing to New York, dealing another blow to London’s ailing equity market. If approved by shareholders, Flutter’s transition to a US primary listing, away from the London Stock Exchange, could take place as soon as this year, the company said on Monday.
/jlne.ws/3SELBuR

Why China’s great property bust threatens to backfire on the West
Michael Bow – The Telegraph
After years of turbulence, Chinese property giant Evergrande was hit with a winding-up order by a judge in Hong Kong on Monday, setting up a multibillion-dollar battle between Western creditors and Chinese authorities. In a dramatic escalation of Evergrande’s plight, the world’s most indebted property company failed to convince Judge Linda Chan that it had a viable restructuring plan – three years after the company first defaulted on its debt.
/jlne.ws/42ilAo8

JPMorgan Quants Warn of Dot-Com Style Concentration in US Stocks
Julien Ponthus and Farah Elbahrawy – Bloomberg
The dominance of the 10 biggest stocks in US equity markets is increasingly drawing similarities with the dot-com bubble, raising the risk of a selloff, according to JPMorgan Chase & Co. quantitative strategists. The share of the top ten stocks on the MSCI USA Index, including all of the so-called Magnificent Seven tech stocks, has risen to 29.3% by the end of December, the strategists led by Khuram Chaudhry wrote in a Tuesday note.
/jlne.ws/3HFRCko

Exclusive-Two key UBS investors worry about bank’s size, regulatory friction
Stefania Spezzati and Oliver Hirt – Reuters
UBS is forging ahead with its integration of Credit Suisse but two key investors fear the Swiss bank could be on a collision course with regulators because of its size. UBS took over its rival in a state-orchestrated rescue last year, creating a bank with a balance sheet of more than $1.6 trillion, nearly twice the size of the Swiss economy. Its shares are up about 50% since March, when the deal was announced, outperforming the Stoxx European Banks Index.
/jlne.ws/4buSeHB

Scandal-Hit Trading Desk Turns Into Money Spinner at Wells Fargo
Hannah Levitt – Bloomberg
Wells Fargo & Co.’s early test of how much it can grow a trading desk by leaning on relationships across corporate America is yielding a $1 billion answer. That’s roughly how much annual revenue is being churned out by its foreign-exchange business, a forerunner in the bank’s long-planned expansion on Wall Street, according to people with knowledge of the progress. It’s up by several hundred million dollars in three years and ahead of the firm’s own targets, the people said.
/jlne.ws/42qexdi

Global Clean Energy Spending Surges to $1.8 Trillion. It’s Not Enough; While the US, EU and UK boosted clean-energy investments, China remains the biggest market in the energy transition.
Will Wade – Bloomberg
Global spending on the clean-energy transition hit record highs as the world moves to rein in climate change, but it’s still not enough to get on track to net-zero emissions. Total spending surged 17% last year to $1.8 trillion, according to a report Tuesday from BloombergNEF. These include investments to install renewable energy, buy electric vehicles, build hydrogen production systems and deploy other technologies. Add in the investments in building out clean-energy supply chains, as well as $900 billion in financing, and the total funding in 2023 reached about $2.8 trillion.
/jlne.ws/47VCdqM

The Most Important Man in Finance You’ve Never Heard Of; Josh Frost has more than 100 Wall Street sources helping him make a big decision on Wednesday. He hopes most of America doesn’t notice.
Andrew Duehren – The Wall Street Journal
Josh Frost’s low-profile job is suddenly a Wall Street obsession. As the Treasury Department’s assistant secretary for financial markets, he sets the mix of U.S. government bonds sold to investors, a process guided by the department’s mantra to be “regular and predictable.” So he found it odd last year when his phone started lighting up with texts from friends and former colleagues telling him that CNBC’s Jim Cramer had crowned him “the most important man in finance.”
/jlne.ws/42mflj2

Ukraine Invasion

What does Ukraine’s million-drone army mean for the future of war?; In 2024, Ukraine will have more drones than soldiers in its armed forces, and the aerial vehicles and the artificial intelligences that can control them are changing the way war is waged
David Hambling – New Scientist
Ukraine’s president Volodymyr Zelensky has promised that in 2024 the country’s military will have a million drones. His nation already deploys hundreds of thousands of small drones, but this is a major change – a transition to a military with more drones than soldiers. What does that mean for the future of war?
/jlne.ws/4bfJcOo

EU agrees to set aside profits from frozen Russian assets; Agreement marks first step towards potential handing over of billions of euros to Ukraine
Paola Tamma – Financial Times
EU member countries have backed a plan to set aside billions of euros of profits arising from the freezing of assets of Russia’s central bank in a first step towards their possible use for Ukraine’s reconstruction. The unanimous decision on Monday – which has yet to be formalised in coming weeks – is part of the bloc’s show of support for Kyiv ahead of the second anniversary of Russia’s full-scale invasion. It also comes in the run-up to a summit on Thursday where EU leaders are expected to sign off on EUR50bn in financial support for Ukraine.
/jlne.ws/3UeXJUs

‘Ukraine fatigue’ is unpardonable; Western countries have the resources but now must display the will to ensure Russia does not prevail
Martin Wolf – Financial Times
At the annual meeting of the World Economic Forum in Davos two weeks ago, President Volodymyr Zelenskyy of Ukraine asserted that “If anybody thinks this is only about us, this is only about Ukraine, they are fundamentally mistaken”. At a dinner I attended, Dmytro Kuleba, Ukraine’s foreign minister, asked: “Does the west still believe in itself?”
/jlne.ws/49avE4T

As Ukraine Plows Through Artillery Shells, One Plan to Send More Fizzles; Failure of U.K.-Japan plan highlights challenges the West faces in boosting Kyiv’s munitions supplies
Alistair MacDonald and Alastair Gale – The Wall Street Journal
A plan to provide more artillery shells to Ukraine by having Japan send munitions to Britain has stalled, underscoring the challenge the West faces in increasing Kyiv’s stocks of the much-needed ammunition. Under the proposed initiative, a Japanese company would have produced 155 millimeter shells under license from Britain’s BAE Systems and then sent the ammunition to the U.K., freeing up London to send more munitions to Ukraine. That plan has now ground to a halt, according to people familiar with the matter.
/jlne.ws/3vNlt7R

Israel/Palestine Conflict

Pentagon says it is not seeking war with Iran after Jordan attack
Idrees Ali and Phil Stewart – Reuters
U.S. Defense Secretary Lloyd Austin on Monday vowed the U.S. would take “all necessary actions” to defend its troops after a deadly drone attack in Jordan by Iran-backed militants, even as President Joe Biden’s administration stressed it was not seeking a war with Iran. The attack on Sunday killed three U.S. soldiers and wounded more than 40 troops. It was the first deadly strike against U.S. troops since the Israel-Hamas war erupted in October and marks a major escalation in tensions that have engulfed the Middle East. Advertisement · Scroll to continue “Let me start with my outrage and sorrow (for) the deaths of three brave U.S. troops in Jordan and for the other troops who were wounded,” Austin said at the Pentagon.
/jlne.ws/3Om9kx3

Can Israel achieve its war goals in Gaza? Conflict in coastal enclave becomes war of attrition as Israel struggles to reach its stated aims
Neri Zilber – Financial Times
Since the start of the war in Gaza, Israel’s armed forces have pursued their twin objectives – “dismantling” Hamas rule in the territory and rescuing all remaining Israeli hostages seized by the group – with ferocity and determination. Three months on, however, many in Israel, including Gadi Eisenkot, a member of the war cabinet, have begun to question whether either or both of those aims can be achieved.
/jlne.ws/49hcmej

Middle East situation ‘incredibly volatile’ after deadly attack, Blinken warns; Washington weighs response while Iran tries to distance itself from assault in Jordan that killed three US service members
Felicia Schwartz and James Politi – Financial Times
Antony Blinken, the US secretary of state, has warned that the Middle East faces its most “dangerous” conditions since at least 1973, as Washington considers its response to an attack that killed three service members at the weekend. Blinken’s comments on Monday underscored the concern in the Biden administration about the potential for an expansion of the conflict, even as it vows to retaliate against the Iran-backed militias it has blamed for the deadly strike.
/jlne.ws/3ucPbCQ

Hamas Is Discussing Proposal for Pause in Fighting, Official Says
The New York Times
The political chief of Hamas, Ismail Haniyeh, announced on Tuesday that the militant group had received a proposal to pause the fighting in Gaza, after representatives from four nations agreed to present the group with a framework that would begin with a six-week cease-fire to allow for the release of more hostages.
/jlne.ws/3HF0bft

Exchanges, OTC and Clearing

Abaxx Announces Closing of Strategic Financing in Abaxx Singapore
Abaxx
Abaxx Technologies Inc. (NEO:ABXX)(OTCQX:ABXXF) (“Abaxx Tech” or the “Company”), a financial software and market infrastructure company and majority shareholder of Abaxx Singapore Pte. Ltd. (“Abaxx Singapore”), the owner of Abaxx Commodity Exchange and Clearinghouse (individually, “Abaxx Exchange” and “Abaxx Clearing”), and producer of the SmarterMarkets Podcast, is pleased to announce that Abaxx Singapore has closed its best efforts equity private placement as previously announced on January 3, 2024 (the “Offering”) for gross proceeds of US$27,323,013.
/jlne.ws/3HcoZLp

StoneX Becomes Abaxx Exchange’s First Clearing and Trading Member to Expand Market Offering
Abaxx
StoneX Financial Pte Ltd (“StoneX”), a subsidiary of StoneX Group Inc. (NASDAQ: SNEX), and Abaxx Technologies Inc. (NEO:ABXX)(OTCQX:ABXXF) (“Abaxx”), today announced that StoneX has become the first approved clearing and trading member of Abaxx’s indirectly held, majority-owned Singapore-based exchange (“Abaxx Exchange”) and clearinghouse (“Abaxx Clearing”), introducing centrally cleared, physically-deliverable futures contracts, and licensed as a Recognised Market Operator (“RMO”) and Approved Clearing House (“ACH”) with the Monetary Authority of Singapore (“MAS”).
/jlne.ws/48SWu1M

CME Group Latin American FX Futures Hit All-Time Volume and Open Interest Records in 2023; Increased client participation deepens liquidity and further strengthens price discovery function
CME Group
CME Group, the world’s leading derivatives marketplace, today announced its Mexican peso and Brazilian real FX futures contracts reached all-time average daily volume (ADV) and open interest (OI) records in 2023. The increased trading is resulting in deeper liquidity and broader client participation, which in turn, strengthens reliance on these markets as the premier source of price discovery for the broader FX marketplace.
/jlne.ws/3Sgxlqx

Raymond James Bank to Use ICE Mortgage Technology’s End-to-End Digital Lending Platform; Encompass chosen after independent review of multiple competing solutions
Intercontinental Exchange Inc.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that Raymond James Bank will use the company’s Encompass® end-to-end digital lending platform to support mortgage origination for high net-worth borrowers across both retail and delegated correspondent lending channels. Raymond James Bank chose the solution from ICE Mortgage Technology after an objective evaluation of multiple competing alternatives.
/jlne.ws/3ShM8kW

SPAN 2 Framework Energy Model Parameter Changes – Effective January 30, 2024
CME Group
As per normal review, CME Clearing has undertaken a review of the hypothetical stressed scenarios parameter used in the SPAN 2 Framework’s natural gas pod. In particular, within the SPAN 2 framework, the hypothetical stressed scenarios parameter is incorporated in the stress value-at-risk sub-component of the market risk component. Following this review, CME Clearing has determined it will introduce hypothetical stressed scenarios parameter changes to align with current volatility across the term structure for natural gas. While the impact to production portfolios will vary depending upon the risk profile for each individual portfolio, CME Clearing expects a decrease in margin requirements for spreads against the front month natural gas contract and the total margin for futures and options products to decrease by under 1%.
/jlne.ws/3SgssOs

SPAN 2 Framework Energy Product Addition to In-Scope Products – Effective January 31, 2024
CME Group
As per normal review, CME Clearing’s Risk Management staff approved the addition of the following products to the SPAN 2 framework’s in-scope product list into SPAN 2 framework’s crude pod. For avoidance of doubt, products that are added to the In-Scope Products list will be margined under the SPAN 2 methodology, however they may receive margin offsets against products that are margined under the SPAN methodology through Cross Model Offset (“CMO”). The rollout schedule for asset classes to be margined under the SPAN 2 methodology is available here and the list of current products margined under SPAN 2 methodology is available here.
/jlne.ws/3Om9pRC

Japan Exchange Group, Inc. And Consolidated Subsidiaries Consolidated Financial Results For The Nine Months Ended December 31, 2023 (Based On IFRS), Unaudited
Mondovisione
During the consolidated cumulative third quarter (from April 1, 2023 to December 31, 2023), JPX Group recorded operating revenue of ¥111,639 million (increased 11.1% from the same period of the previous fiscal year (i.e., year on year)), and operating expenses were Â¥51,451 million (increased 2.5% year on year). As a result, JPX Group recorded operating income of Â¥66,042 million (increased 27.6% year on year) and income before income tax of Â¥66,024 million (increased 27.6% year on year).
/jlne.ws/49ahRLG

Swiss Stock Exchange CEO Says Holcim’s US Listing Plan Shows Need to Up the Game; Holcim plans to spin off North-America business, list in US; SIX chief says exchange must improve relations with issuers
Allegra Catelli – Bloomberg
The Swiss stock exchange said Holcim Ltd.’s plan to spin off its North American business shows the bourse needs to do more to improve relations with members as more companies consider switching to a US listing. “We sometimes take our issuers or our listed companies a little bit too much for granted, we need to be more commercial,” SIX Group AG Chief Executive Officer Jos Dijsselhof said in an interview.
/jlne.ws/3uc26oz

The open position on repo transactions with the CCP with a floating rate on the Moscow Exchange at the end of the first year exceeded 800 billion rubles
MOEX
The volume of open position on repo transactions with a central counterparty (CCP) with a floating rate on the money market of the Moscow Exchange exceeded the level of 800 billion rubles. This result was achieved for the period from January 30, 2023, when trading participants were able to use a floating rate in repo transactions, as well as in deposits with the CCP and loans. The average term of repo transactions with floating rates concluded by participants since the launch of the new service was 115 days.
/jlne.ws/3HAfE0p

Replacement in indices
National Stock Exchange of India
The Index Maintenance Sub-Committee (Equity) of NSE Indices Limited has decided to make replacement of stock in various indices as listed hereunder on account of scheme of amalgamation of Tata Metaliks Ltd. with Tata Steel Ltd. These changes shall become effective from February 06, 2024 (close of February 05, 2024).
/jlne.ws/3SC5ulZ

Fintech

LiquidityBook Appoints Trading Technology Industry Veteran Jason Morris as President; Morris, former President of Enfusion, to become the face of LiquidityBook as it looks to expand in 2024
LiquidityBook
LiquidityBook, a leading provider of cloud-native buy- and sell-side trading solutions, is pleased to announce the appointment of Jason Morris as its new President. With an impressive track record in the industry and prior executive leadership roles, Morris brings a wealth of knowledge and expertise to the position. This new hire continues LiquidityBook’s growth strategy, which encompasses the full range of strategic hires throughout the organization, growth via M&A and enhancing products and services to more holistically serve a growing clientele.
/jlne.ws/47Sm0Tn

Exclusive: XTX Markets names Gabriele Papievyte to head Ventures unit
Gerald Segal – FXNewsgroup.com
FNG has learned that London based XTX Markets, one of the world’s leading market makers and algo trading firms, has tapped Gabriele Papievyte to head its internal venture capital arm called, appropriately, XTX Ventures. Gabriele Papievyte joined XTX Ventures as an Investment Manager mid last year. Previously she was an Investment Associate at Canadian venture capital firm Inovia Capital.
/jlne.ws/47TELWv

US Senate panel urges Treasury Dept to make tech firms comply with sanctions
Kanishka Singh – Reuters
The U.S. Treasury Department should do more to ensure that major tech firms, including Meta Platforms and Alphabet, comply with sanctions against foreign firms that advertise on their platforms, a top lawmaker said on Monday. Democratic U.S. Senator Mark Warner, who heads the Senate Intelligence Committee, wrote a letter to Treasury Secretary Janet Yellen in which he said the Treasury Department was failing to “ensure sanctions compliance in digital advertising markets.”
/jlne.ws/3HD8NTL

AI Officer Is the Hot New Job That Pays Over $1 Million; Companies have ditched their metaverse experts, pivoting to artificial intelligence instead.
Matthew Boyle – Bloomberg
Advertising giant Publicis Groupe SA made an unusual executive hire in mid-2022 – a lion-headed digital avatar named Leon who would serve as “chief metaverse officer,” guiding clients through the virtual realm that had seized real-world attention. His moment in the spotlight didn’t last long.
/jlne.ws/3SDKFqg

AI Chip Startup Rebellions Snags Funding to Challenge Nvidia; Investors in its Series B round include a KT unit and Shinhan; Investors are betting on the hardware that powers global AI
Yoolim Lee – Bloomberg
Rebellions Inc. secured $124 million from investors including KT Corp. to accelerate the development of a next-generation AI chip, underscoring growing interest in the hardware that drives artificial intelligence. The South Korean startup closed a Series B financing led by the wireless carrier at a valuation of more than $650 million. Singapore’s Pavilion Capital, KT’s datacenter subsidiary KT Cloud Co. and Shinhan Venture Investment Co. took part in the financing, the company said in a statement. New backers that joined the deal included Koreyla Capital from France and Japan’s DGDV.
/jlne.ws/3SD4fDm

Natural block liquidity is shifting Canadian equities towards e-trading, finds report; Despite a brief uptick in high-touch trading, e-trading strategies are seeing increased usage – 32% in 2023 compared to 28% in 2021 – with this expected to continue to rise in the next three years.
Wesley Bray – The Trade
/jlne.ws/3SBZo54

Generative AI Seen as Helping to Identify M&A Targets, Bain Says
Nina Trentmann – Bloomberg
/jlne.ws/4bg9jVg

Nvidia Joins $150 Million Funding for AI Chatbot Maker Kore.ai
Saritha Rai – Bloomberg
/jlne.ws/4buVuCP

Broadridge’s LTX Has Four New Fixed Income Trading Patents
LTX via Markets Media
/jlne.ws/3Sl6Pw7

Cybersecurity

The CEO trying to democratize cybersecurity; Felix Kan on building a bug-hunting platform to enhance cybersecurity for small companies.
Viola Zhou – Rest of World
Felix Kan is the chief executive officer of Cyberbay, a platform connecting institutions that want to test their cybersecurity with freelance coders skilled in hunting for bugs and exploits that a hacker could use. The platform effectively turns cybersecurity into gig work, using freelancers to search for weaknesses and test a company’s defenses, with rewards paid out if vulnerabilities are identified. Launched in June 2023, Cyberbay’s goal is to help smaller companies and institutions afford robust cybersecurity checks without having to hire an in-house team.
/jlne.ws/3HEsdHS

Man who stole and leaked Trump tax records sentenced to 5 years in prison
Holmes Lybrand – CBN
The man who stole and leaked former President Donald Trump and thousands of others’ tax records has been sentenced to five years in prison. In October, Charles Littlejohn, 38, pleaded guilty to one count of unauthorized disclosures of income tax returns. According to his plea agreement, he stole Trump’s tax returns along with the tax data of “thousands of the nation’s wealthiest people,” while working for a consulting firm with contracts with the Internal Revenue Service.
/jlne.ws/48TBh7G

Number of data breaches continues to skyrocket, new report shows; According to the most recent data from the FBI’s Internet Crime Complaint Center, 96 Illinois companies reported being the victim of data breaches in 2022.
PJ Randhawa and Leigh Lesniak – NBC Chicago
Cyber security experts’ reminder to use strong passwords and two-factor authentication may sound like a broken record, but a new report shows the warning is more important than ever. Data breaches are a growing problem. Last year, more than 353 million Americans became victims. The Identity Theft Resource Center released its 2023 report of data breaches, and the findings are jolting even to the non-profit’s President and CEO Eva Vasquez. “We’re over 3,200 breaches in a single year,” Vasquez said. “That’s a 72% increase over the previous all-time high back in 2021.”
/jlne.ws/3SkKkYl

Cryptocurrencies

Binance Now Allows Larger Traders to Keep Their Assets Elsewhere: FT
Jamie Crawley – CoinDesk
Cryptocurrency exchange Binance now allows larger traders to keep their assets at independent banks, the Financial Times reported on Tuesday. Previously, they had to hold their assets on the exchange or at its custodial partner, Ceffu. They can now use crypto-friendly institutions such as Swiss banks Sygnum or FlowBank. The move may reflect users’ unease about Binance’s regulatory dispute in the U.S., which saw it landed with a $4.3 billion fine in November, heightening concerns brought about by the bankruptcy of rival exchange FTX a year earlier.
/jlne.ws/48ZbFXm

Hong Kong Sets Minimum Insurance Requirement of 50% for Licensed Crypto Exchanges
Hope C – CoinMarketCap
The Hong Kong Securities and Futures Commission (SFC) has set a minimum insurance requirement of 50% for licensed crypto exchanges handling customers’ assets. This requirement aims to safeguard investors’ funds in the event of a security breach or insolvency. OSL Exchange, one of the licensed virtual asset trading platforms in Hong Kong, announced last week that the 50% insurance coverage minimum applies to all assets under custody. To comply with this requirement, OSL announced a two-year partnership with Canopius, a syndicate of underwriter Lloyds of London, for an insurance policy covering 95% of its users’ assets.
/jlne.ws/480zrke

Bitcoin success with SEC fuels anticipation for ether spot ETF
Brian McGleenon – Yahoo! Finance
Investors are anticipating that ethereum (ETH-USD) could be the next cryptocurrency included in a spot exchange-traded fund (ETF), leading to a shift in market sentiment, an analyst told Yahoo Finance UK. Zodia Markets CEO Usman Ahmad told Yahoo Finance Future Focus: “Ethereum is where the market is looking next for a spot ETF approval.”
/jlne.ws/3ShaYkN

Big firms on Wall Street are piling into a bitcoin trade that goes beyond hoping for a price spike Filip De Mott – Markets Insider
Futures traders are piling into bitcoin contracts. An average 66,000 futures contracts have been exchanged daily this month at the CME Group, marking a new high and an almost 50% rise month-to-month, according to The Financial Times. January’s open interest is already equal to about $4.6 billion, and rose to around $6 billion on the day the ETFs were given the green light by the Securities and Exchange Commission.
/jlne.ws/494kpuY

Binance bows to trader demands to keep their assets elsewhere; Customers switch trading collateral to independent banks including Switzerland’s Sygnum and Flow
Nikou Asgari – Financial Times
Binance has bowed to pressure from customers who want to hold their assets with an independent custodian, highlighting traders’ growing unease over the safety of the world’s largest cryptocurrency exchange since it was fined by US authorities last year. The exchange has begun to allow some larger traders to keep their assets at independent banks, including Switzerland’s Sygnum Bank and Flow Bank, according to three people with knowledge of the arrangements. Previously, Binance clients could only hold their assets either on the exchange or through custodian Ceffu, which on its website says it is the “only institutional custody partner of the Binance Exchange”. US regulators last year described Ceffu as a “mysterious Binance-related entity”.
/jlne.ws/3SAXPVg

Politics

Iran Urges Diplomacy as US Weighs Response to Deadly Attack
Patrick Sykes – Bloomberg
Iran urged the US to use diplomacy to ease tensions in the Middle East, as Tehran braces for a military response to a deadly attack on an American base over the weekend. The foreign minister of the Islamic Republic said “active” diplomacy is underway to find a political solution to the war in Gaza and the regional fallout, without elaborating.
/jlne.ws/49delAd

Nassim Taleb Says US Faces a ‘Death Spiral’ of Swelling Debt; Black Swan author says it’s hard to see a way out of problem; Political system makes it tougher to address, Taleb says
Sonali Basak – Bloomberg
Black Swan author Nassim Nicholas Taleb said the US deficit is swelling to a point that it would take a miracle to reverse the damage. “So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he said Monday night at an event for Universa Investments, the hedge fund firm he advises. “And a debt spiral is like a death spiral.”
/jlne.ws/3vVAip0

Greece Gets Record Demand for First New Bond Since Regaining Investment Grade; Greece sells first new bond since regaining investment grade; Bids for German bonds is more than double the previous record
Aline Oyamada and James Hirai – Bloomberg
Germany and Greece got record demand for their bond sales on Tuesday, as investors rushed to lock in high yields before the European Central Bank starts cutting interest rates. Bids for Germany’s 30-year bonds topped EUR74 billion ($80.2 billion), more than double the previous record set in 2020, while Greece’s 10-year debt – the first new bond since it regained investment grade – attracted EUR35 billion in orders, the most ever. Earlier this month, Spain and Belgium also reported historic orderbooks.
/jlne.ws/3UrH1RE

Russia to Deploy New Weapons on Disputed Kuril Islands
Bloomberg News
Russia plans to deploy new weapons on islands that are at the center of a decades-long territorial dispute with Japan, according to former President Dmitry Medvedev, who’s the current deputy head of the country’s Security Council. The strategic role of the Kuril Islands will increase “including stationing new weapons there,” Medvedev said Tuesday on the X social-media platform. “We don’t give a damn about the ‘feelings of the Japanese’ concerning the so-called ‘Northern territories’. These are not ‘disputed territories,’ but Russia.”
/jlne.ws/49by7Mv

Days ahead of price rises, Cuba sounds political rallying cry
Reuters
Cuban President Miguel Diaz-Canel and top officials on Monday tried to reassure the country price rises and tax hikes were necessary, days ahead of an expected five-fold increase in the price of gasoline, but said more explanation may be needed. Cuba in late December announced a series of measures, including hikes in the prices of fuel and public transport, aimed at narrowing a yawning deficit. Critics have described the increases as inflationary, ill-timed and lacking incentives for domestic production.
/jlne.ws/42kSEf7

Regulation

Bank Mergers Face Tougher, Slower Process Under OCC Proposal; Agency would curb automatic default approval for some deals; There’s a risk the new rules will discourage bank M&A activity
Katanga Johnson – Bloomberg
Bank mergers face a tougher and potentially longer road to approval under a proposal released Monday by a top industry watchdog. The US Office of the Comptroller of the Currency is seeking to remove a decades-old requirement that certain merger applications get automatic approval on the 15th day after the close of the public comment period if the OCC fails to act by that deadline.
/jlne.ws/3w1F30c

Woman accused of laundering bitcoin proceeds of £5bn fraud in London trial; More than 128,000 investors in China between 2014 and 2017 had their funds stolen, prosecutors said
Eri Sugiura – Financial Times
A British-Chinese woman has gone on trial for laundering bitcoin derived from a £5bn fraud in China committed by her employer, a fugitive from the Beijing authorities, a court heard on Monday. Jian Wen, 42, has been charged with three counts of money laundering on behalf of a Chinese woman called Yadi Zhang, Southwark Crown Court in London heard. Zhang had stolen approximately £5bn from more than 128,000 investors in China between 2014 and 2017 through a wealth management fraud before converting the money into bitcoin and arriving in London in 2017 under a false identity, prosecutors told the court.
/jlne.ws/48TCH20

HSBC Fined £57 Million by UK Watchdog for Mismarked Deposits
Harry Wilson – Bloomberg
HSBC Holdings Plc was fined £57.4 million ($73 million) by the UK for incorrectly excluding billions of pounds of its customers’ money from a depositor protection program. Imposing the penalty, the Prudential Regulation Authority said Tuesday that the lender failed to properly comply with deposit protection rules under the Financial Services Compensation Scheme over many years. The fine, PRA’s second highest, “reflects the seriousness of the failings” that occurred between 2015 and 2022, according to a statement from the arm of the Bank of England.
/jlne.ws/3Opy0Vv

Commissioner Pham to Speak at the 8th Annual FinTech and Regulation Conference
CFTC
Commissioner Caroline D. Pham will participate in a fireside chat at the Afore Consulting 8th Annual FinTech and Regulation Conference.
/jlne.ws/3SEqcC1

Derivatives trading: Brokers, traders differ on proposal to extend trading hours, says Sebi
LiveMint
Brokers and trading members in India’s equity market have divergent views on a proposal to extend trading hours for the derivatives segment, the chairperson of India’s markets regulator said on Monday.
/jlne.ws/4be4lbM

Promoter Brenda Chunga (aka Bitcoin Beautee) agrees to settle fraud and unregistered offering charges
SEC
The Securities and Exchange Commission today charged Xue Lee (aka Sam Lee) and Brenda Chunga (aka Bitcoin Beautee) for their involvement in a fraudulent crypto asset pyramid scheme known as HyperFund that raised more than $1.7 billion from investors worldwide.
/jlne.ws/3UkOTo9

ESMA seeks market input on crypto classification under MiCA; Market participants have until 29 April to provide comments; ESMA will publish its final report in Q4 2024.
Claudia Preece – The Trade
The European Securities and Markets Authority (ESMA) has published a consultation paper, seeking feedback from the market on the classification of crypto assets under the Markets in Crypto Assets Regulation (MiCA). Comments from stakeholders are being received until 29 April, with ESMA specifically seeking input on establishing a clear line on the conditions and criteria for qualifying crypto assets as financial instruments.
/jlne.ws/49fInmM

If you fail to prepare, prepare to fail: As Emir refit looms, lack of readiness not an option for market participants; With Emir refit implementation set to come into force in April for the EU with the UK to follow in September, The TRADE spoke to Thomas Steimann, chief executive of SIX’s Regis-TR to unpack the readiness of those market participants trading over the counter (OTC) derivatives markets, the key implementation considerations across both sides of the Channel, and what the firms should prioritise going forward.
Claudia Preece – The Trade
What is the current state of play for refit implementation?
What’s important to remember is that the implementation isn’t about new rules, it’s about amending an existing regulation. It is a significant change and improvement of the existing Emir regulation which has been around now for more than 10 years.
/jlne.ws/4be5RdZ

Investing and Trading

Treasury Cuts Quarterly Borrowing Estimate to $760 Billion
Liz Capo McCormick – Bloomberg
The US Treasury reduced its estimate for federal borrowing for the current quarter, a move unexpected by many dealers, helping stoke rallies in bonds and stocks Monday. The Treasury Department said that it now estimates $760 billion in net borrowing for January-through-March, down from a previous prediction of $816 billion released in late October. US debt managers kept their estimate for the Treasury’s cash balance for the end of March at $750 billion.
/jlne.ws/3UlhJEW

Most of Wall Street Sees Repeat Uptick in Treasury Auction Sizes; Primary dealers largely see $121 billion quarterly refunding; Minority sees slight variations to previous increase pattern
Elizabeth Stanton – Bloomberg
Most Wall Street dealers expect the US Treasury to repeat its most recent note and bond auction size increases for the coming quarter. The Treasury is set on Wednesday to announce auction plans for February to April. Across the board, primary dealers obligated to participate in those auctions see officials following through on guidance for one more round of increases.
/jlne.ws/3UqlWY9

Crowded trades top worry list for hedge fund investors – BofA
Nell Mackenzie – Reuters
Concern that hedge fund portfolios contain too many of the same trades has shot up the worry list for global investors with hedge fund exposure, a Bank of America survey shows. Over a fifth of big investors, such as pension funds and insurance companies, pointed to crowded trades as a top concern, said the survey about 2023 year-end sentiment which was released on Monday and seen by Reuters on Tuesday.
/jlne.ws/4bdWURV

Top accounting firms admit breaking rules safeguarding audit independence; US regulators require staff and families to disclose possible conflicts of interest
Stephen Foley – Financial Times
The Big Four accounting firms have admitted hundreds of violations of regulations designed to protect the independence of their audit work, following the introduction of new disclosure rules in the US. The admissions come as the Public Company Accounting Oversight Board urges companies and investors to pay greater attention to the findings of its annual inspections of audit firms, the latest round of which are expected to be released in the coming weeks.
/jlne.ws/4bsBoJk

Environmental, Social and Corporate Governance

Global Clean Energy Spending Surges to $1.8 Trillion. It’s Not Enough; While the US, EU and UK boosted clean-energy investments, China remains the biggest market in the energy transition.
Will Wade – Bloomberg
Global spending on the clean-energy transition hit record highs as the world moves to rein in climate change, but it’s still not enough to get on track to net-zero emissions. Total spending surged 17% last year to $1.8 trillion, according to a report Tuesday from BloombergNEF. These include investments to install renewable energy, buy electric vehicles, build hydrogen production systems and deploy other technologies. Add in the investments in building out clean-energy supply chains, as well as $900 billion in financing, and the total funding in 2023 reached about $2.8 trillion.
/jlne.ws/47Xew1F

EU climate chief rebuts business fears that green policies hit competitiveness; Wopke Hoekstra says measures to tackle global warming should not undermine industry
Alice Hancock – Financial Times
The EU’s climate chief has warned the bloc must not be lured into a “false narrative” that action against global warming is undermining the competitiveness of European businesses, as Brussels fights a backlash against its ambitious environmental laws. Speaking to the Financial Times ahead of the February 6 announcement of a new EU plan for cutting greenhouse gas emissions by 2040, climate commissioner Wopke Hoekstra said that despite “significant worries” from industry, he was “absolutely convinced” Europe could continue to have a “world class, second to none, business environment”.
/jlne.ws/4bg8sUy

Spain’s Catalonia Is Spending $2.6 Billion to Survive Without Rain; Barcelona and surrounding areas are planning to end their dependency on rain water by 2030 as global warming forces the region to adapt to a dramatically different climate.
Laura Millan – Bloomberg
Catalonia, home to Spain’s second-largest regional economy and popular tourist destination Barcelona, has a plan to live without rain by the end of this decade. The multi-billion-euro strategy – which includes investing in desalination plants – has gained urgency as the region looks likely to soon declare a state of emergency for water, and global warming makes droughts in the future more common.
/jlne.ws/47XmCY3

Radical food system overhaul would raise costs but deliver $10tn a year benefit, report says; Report estimates one-third rise in commodity prices by 2050 would be compensated by health and nature savings
Attracta Mooney – Financial Times
A radical overhaul of the global food system to address climate change, biodiversity and health would raise agricultural commodity prices by about a third by 2050 but would be outweighed by up to $10tn a year worth of benefits, a group of leading academics and scientists has estimated. The environmental cost of existing food systems stood at $3tn a year and the additional costs to health were at least $11tn, the research from the Food System Economics Commission estimated.
/jlne.ws/47U7ESG

Japan May Open $20 Billion Hydrogen Plan Applications in Summer; Trade Ministry proposal would cover price difference with gas; Resource-scant nation is seeking to boost hydrogen use
Shoko Oda – Bloomberg
Japan may open applications for funding from a 3 trillion yen ($20.4 billion) program to stimulate the use of hydrogen as a fuel this summer, and select projects by year-end. The government would subsidize specific forms of hydrogen production, including a plan to cover the price difference with natural gas, according to a proposal compiled by a panel within the trade ministry.
/jlne.ws/3vZvNKk

Goldman, JPMorgan Weigh In as ESG Fund Flows Hit Historic Low; ESG fund industry recorded its worst flows ever last quarter; Development adds to calls for the ‘ESG’ label to be replaced
Natasha White and Sheryl Tian Tong Lee – Bloomberg
/jlne.ws/3u1D4bW

World’s biggest jeweller Pandora stops using mined silver and gold
Reuters
/jlne.ws/42l4Bl7

US Sets Rules to Make Gas and Electric Stoves More Efficient; Standards will lower utility bills, Energy Department says; Rules were not intended to address ban on gas stoves
Ari Natter – Bloomberg
/jlne.ws/4bgaR1C

Ikea decouples growth from emissions; Ikea has successfully disconnected its emissions from its financial growth, achieving a 24.3% reduction in climate footprint compared to its 2016 baseline, while achieving a 30.9% increase in revenue.
edie
/jlne.ws/4bboe3j

Institutions

Jamie Dimon says mounting US debt will eventually spark a ‘rebellion’ in global markets
Aruni Soni – Business Insider
The US’s mountain of debt hasn’t gone anywhere – and that’s a big problem for markets around the world, Jamie Dimon warned at a panel decision in Washington with the Bipartisan Policy Center on Friday. The US debt-to-GDP ratio looks like a hockey-stick chart – or one that starts relatively sideways before eventually spiking – JPMorgan CEO Dimon explained. He expects the measure to hit 130% by 2035.
/jlne.ws/4bfLsoQ

Bank of America Targets Middle Market to Expand Investment Banking in Europe; Lesley White to head international middle-market strategy; Bank will continue to hire, invest in people, Moynihan says
Katherine Doherty – Bloomberg
Bank of America Corp. is hiring and investing abroad to expand its investment-banking operations for middle-market clients as some of its competitors retreat, according to Chief Executive Officer Brian Moynihan. The focus is on Europe, “where there is opportunity for us to deal with the next size down,” Moynihan said in an interview from his hometown of Wellesley, Massachusetts. “We invest balance sheet, invest capital, invest in people and places.”
/jlne.ws/42z2ISd

Banks Are Hawking US Recession Hedges Tied to Both Stocks, Bonds
Carly Wanna and Elena Popina – Bloomberg
Investors’ lingering fears of recession have prompted Wall Street banks to hawk a complex hedge: exotic options that pay off if stocks fall and bond yields also drop. These options are relatively cheap now, in part, because correlations between equities and rates have been low. But investors should also consider them because US stock valuations look stretched by many measures, according to banks including JPMorgan Chase & Co. and Citigroup Inc. On top of that, questions about how soon the Federal Reserve will start cutting rates could result in wild market swings.
/jlne.ws/48Z9MKg

Norway’s $1.5 Trillion Wealth Fund Boosted Tech Stock Holdings
Kari Lundgren and Stephen Treloar – Bloomberg
Norway’s $1.5 trillion wealth fund added to its bets in the biggest technology companies last year after interest in artificial intelligence drove a surge in the sector. The fund, the world’s single-biggest owner of publicly listed stocks, raised its holdings in Apple Inc, Microsoft Corp, Alphabet Inc., Amazon.com Inc., according to a list of holdings Norges Bank Investment Management publishes once a year on its website. It also upped its stakes in the world’s two most valuable chip firms, Nvidia Corp. and Taiwan Semiconductor Manufacturing Co., as well as chip equipment producer, ASML Holding NV. With Apple, Microsoft and Alphabet among its biggest stock holdings, the fund has reaped the rewards of advances in artificial intelligence and the surge in demand for semiconductor components. The fund is scheduled to report its key results for the full year on Tuesday.
/jlne.ws/3UkzrbQ

Norway Wealth Fund Has First Underperformance in Five Years
Kari Lundgren – Bloomberg
Norway’s $1.6 trillion sovereign wealth fund failed to meet its benchmark for the first time in five years due to losses in real estate even as stock markets rebounded. The fund returned to profit last year, gaining 16.1%, equivalent to about $213 billion, according to a statement on Tuesday. It fell below its benchmark by 18 basis points, having recorded the previous miss in 2018.
/jlne.ws/3u3OZWJ

UK gives European fund managers long-term market access; Government move clears some of the regulatory uncertainty caused by Brexit
Sally Hickey, Laura Noonan and George Parker – Financial Times
/jlne.ws/3Op7wDw

Investors yank over $100 billion from hedge funds in 2023 – Nasdaq eVestment
Nell Mackenzie – Reuters
/jlne.ws/3SDlVyw

Work & Management

IBM to Managers: Move Near an Office or Leave Company; CEO Arvind Krishna long touted importance of in-person work; US office attendance stagnant in 2023 despite new rules
Brody Ford – Bloomberg
International Business Machines Corp. delivered a companywide ultimatum to managers who are still working remotely: move near an office or leave the company. All US managers must immediately report to an office or client location at least three days a week “regardless of current work location status,” according to a memo sent on Jan. 16 viewed by Bloomberg. Badge-in data will be used to “assess individual presence” and shared with managers and human resources, Senior Vice President John Granger wrote in the note.
/jlne.ws/4b8wlNQ

Wellness Exchange

Alzheimer’s was passed between humans in now-banned procedure, study finds; Cases connected to growth hormone extracted from cadavers show disease’s parallels with CJD brain disorder
Michael Peel – Financial Times
Scientists have shed new light on how Alzheimer’s spreads through the brain and found the first evidence of transmission between people, via a now-banned human growth hormone. The study, published in Nature Medicine on Monday, looked at a small group of people who were among at least 1,848 patients treated between 1959 and 1985 with a growth hormone extracted from cadavers.
/jlne.ws/48JOCzv

Regions

Hong Kong’s fund industry on road to recovery as financial watchdog looks to raise global appeal of city’s markets
South China Morning Post
Hong Kong’s fund industry remained resilient amid macroeconomic challenges last year and is starting to rebound now, according to a director of the city’s financial watchdog, who adds that increasing the city’s global competitiveness and its connections with other markets are top priorities for future development. “We’re beginning to see some good signs of recovery,” Christina Choi, executive director of investment products at the Securities and Futures Commission (SFC), said during a panel discussion at an industry event on Monday. “2023 remained full of challenges with high interest rates, inflation and geopolitical tensions, but the asset-management industry remained comparatively resilient.”
/jlne.ws/3Sbc9lG

Hong Kong eyes moves to attract IPOs of mainland Chinese, Middle Eastern firms to spur stock market, Paul Chan says
South China Morning Post
Hong Kong will encourage more companies from mainland China, Middle East and Southeast Asia to list in the city as part of the government’s initiative to revive its sluggish financial market, according to Financial Secretary Paul Chan Mo-po. The government is actively engaging with regulatory authorities on the mainland to expedite the approval process for companies listing in Hong Kong, Chan said at the Hong Kong Capital Markets Forum on Tuesday.
/jlne.ws/3HFfu84

Indonesia’s flood of nickel sparks ‘Darwinian’ battle for survival among miners; Western capitals fear closure of unviable mines will increase China’s control of critical resource
Harry Dempsey, A. Anantha Lakshmi and Mercedes Ruehl – Financial Times
Indonesia is flooding the global nickel market with low-cost supplies, forcing rivals to shut unprofitable mines and sowing panic in Washington and Paris that the upheaval will give China more control over the strategic resource. The country, the world’s largest producer, expanded production by 30 per cent last year to 1.9mn tonnes even though global demand for the metal used in electric car batteries and stainless steel barely grew, according to investment bank Macquarie.
/jlne.ws/3SA3ef4

Second man jailed in Moldova’s ‘fraud of the century’
Alexander Tanas – Reuters
A Moldovan court jailed a banker for 10 years on Monday, the second man to be sentenced in connection with the ex-Soviet state’s “fraud of the century” in which $1 billion was removed from the banking system and taken out of the country. The country’s anti-corruption prosecutor announced the sentence handed down on Viorel Birca in connection with the 2014-2015 fraud on charges of mass fraud and “acting in the interests of a criminal group”.
/jlne.ws/3SkmYBZ

US to Rescind Venezuela Gold License After Opposition Candidate Barred
Patricia Laya – Bloomberg
The US will rescind a license awarded to Venezuela’s state gold producer after Nicolás Maduro’s government banned the opposition’s leading candidate from participating in elections this year. The operations authorized in the license, which had been issued in October alongside others on oil and gas production following Maduro’s agreement with members of the opposition, are to be wound down by Feb. 13, according to a statement from the US Treasury’s Office of Foreign Assets Control. A ban on state-owned gold miner Minerven was imposed in 2019 to prevent lucrative sales that keep the military loyal to the government.
/jlne.ws/3OmGXyN

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