Hits & Takes
By JLN Staff
FIA has an article titled “Growth for Black professionals has not kept pace with growth of our markets; Doug Harris, a managing director at Promontory Financial Group, says industry still has blind spots on race.”
From Brian Klass on Twitter
Yet again, here are covid-19 deaths yesterday:
United States: 1,358
Population of countries above: 426 million
Population of United States: 328 million
You get the idea. The US is not doing this right.
The FT has a whole series on the return to the office. Unfortunately, this is not about the TV show The Office, but going back to that place you left your winter coat and favorite coffee cup back in March.~JJL
Archax is now the first FCA regulated digital securities exchange in UK.
Scott Knudsen has announced CoveTrader (trader.covemarkets.com) is open to beta users. Contact him if you are interested.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Cboe Global Markets, Inc. said Wednesday that trading volume in its new mini VIX futures contract (ticker symbol: VXM), launched Sunday, August 9, totaled nearly 127,000 contracts during its first week, with some 23,000 contracts, or 18% of total volume during the week, traded during CFE’s global extended trading hours. The contract logged more than 25,000 contracts on Monday, August 10, and reached a daily volume high for the week of more than 32,000 on Friday, August 14. Increased market volatility amid the pandemic and the upcoming U.S. presidential elections is amplifying demand for volatility management tools, a recent Cboe blog noted. In addition, investors are showing greater interest in using small-sized contracts with a smaller notional value, such as mini VIX futures, to trade derivatives. The mini VIX contract has the same contract terms as the standard VIX futures contract, but is 1/10th the size. More details are available here. ~SC
The Pandemic’s Red Lights Are Flashing Again: Balance of Power
Karl Maier – Bloomberg
No one can say we weren’t warned. When the coronavirus exploded in the Chinese city of Wuhan and began its inexorable spread across the globe, government leaders could claim with some justification that they couldn’t have known how bad it would get. But even as ensuing lockdowns in many countries seemed to stabilize the situation, medical experts cautioned the world was only in the early stages of the pandemic. The loosening of measures, in an effort to restart economies on their knees, would carry the risk of a resurgence.
*****Maybe we need some new colors to warn us.~JJL
Life after the coronavirus: Thousands flock to Wuhan pool party
Alexander Smith – NBC News
At the start of this year, images of deserted streets in the Chinese city of Wuhan seemed remarkable to a world not yet familiar with the realities of lockdowns and social distancing.
This week, another set of photos from Wuhan went viral on social media, showing just how our world has flipped on its head.
******Excess liquidity can be a problem.~JJL
Tuesday’s Top Three
Our top story Tuesday was Jessica McCaskill stuns Cecilia Brækhus for undisputed title in massive upset from the Guardian. McCaskill is a regulatory reporting analyst for R.J. O’Brien & Associates in Chicago, in addition to being an amazing pugilist. Second was Bloomberg’s What Happens to the Markets If There’s a Vaccine? Third was Fauci says Covid-19’s long-term effects, especially in young people, are “really troublesome” from CNN.
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E*Trade Hit With Lawsuit After Investors Burned by Subzero Oil
Catherine Ngai – Bloomberg
Plaintiffs allege glitch prohibited sales as oil fell to $0; U.S. regulators have started investigations into various firms
One of the biggest U.S. brokerages has been hit with a class action lawsuit after the oil price crash in April led to hundreds of thousands of dollars in losses for its clients and allegations that the firm failed to adequately warn investors of risks. The lawsuit, filed Tuesday in the Northern District Court of California, alleges that E*Trade Securities did not properly test its online trading platform for the possibility of negative oil futures in advance while also failing to disclose that prices could fall below the $0 mark.
Hong Kong bourse profits hit record on China ‘homecoming’ listings; Revenue windfall from Chinese tech group floats was less than some investors hoped for
Hudson Lockett and Thomas Hale – FT
Profits at Hong Kong’s stock exchange hit a record high in the first half as the prospect of forced delistings from US bourses encouraged Chinese tech groups to list billions of dollars of shares in the city.
Drought and Rain Are Reshaping Global Grain Trade Routes
Megan Durisin and Ainslie Chandler – Bloomberg
As EU crops shrink, harvest outlooks are growing elsewhere; Russia, Australia and Canada are set to boost exports
The global wheat trade is being shaken up again after extreme weather hurt crops in the European Union while harvests are booming elsewhere. Fresh from leapfrogging Russia as the top exporter, the EU will drop to third place this season after drought and floods pummeled crops. There’s a different story playing out in other key shippers: Canada is set for record sales, Australia will export the most in four years and Russia will regain the No. 1 spot, according to the U.S. Department of Agriculture.
Germany Sees Record Bond Demand Amid Flight From Dollar Assets
James Hirai – Bloomberg
Bid-to-cover ratio for 30-year bund auction rises to 2.9; Falling dollar has boosted appeal of assets in the euro area
Germany’s longest-maturity bonds saw demand rise to an all-time high as investors seeking alternatives to dollar assets bought the nation’s highest-yield notes.
Oil Industry Frets About Recruiting Its Next Generation of Workers; A growing distaste for the oil business among potential young employees, combined with the economic crisis of the pandemic, could make it harder to tackle competition from renewable energy and electric vehicles
Rebecca Elliott – WSJ
Two years out of college, Leah Sanders was making as much as $19,000 a month servicing oil wells in Kuwait. After getting laid off in May by oil-field services giant Schlumberger Ltd., she’s back with her parents in Tennessee, earning $15 an hour helping out at her father’s construction business. She recently began considering switching careers and going to law school.
Citigroup Gets Freeze on Brigade Money in $900 Million Error
Chris Dolmetsch, Katherine Doherty and Tina Davis – Bloomberg
Citigroup Inc. scored a temporary court order freezing $175 million that Brigade Capital Management LP declined to return after the bank accidentally transferred more than $900 million to Revlon Inc. lenders.
The order followed a hearing Tuesday in which the bank and the hedge fund faced off over Citigroup’s expensive blunder. The two will be back in court on Wednesday as the judge determines the next steps in their legal battle, including whether to hold a hearing on the bank’s request for a preliminary injunction forcing Brigade to give the money back while the case proceeds. Citigroup sued Brigade on Monday.
Monopoly Power Lies Behind Worst Trends in U.S., Fed Study Says
Craig Torres – Bloomberg
The concentration of market power in a handful of companies lies behind several disturbing trends in the U.S. economy, like the deepening of inequality and financial instability, two Federal Reserve Board economists say in a new paper.Isabel Cairo and Jae Sim identify a decline in competition, with large firms controlling more of their markets, as a common cause in a series of important shifts over the last four decades.
The ‘Everything Bubble’ Isn’t Everything, and Maybe Not Even a Bubble
James Mackintosh – WSJ
Market bubbles involve rapidly rising prices that suck in buyers hoping to make money quickly, who carry out little due diligence and don’t worry much about the long-term prospects of what they’re buying. Standard valuations are always dismissed as no longer relevant. And the bubble is usually inflated by cheap money. Sound familiar? Welcome back to the Everything Bubble, complained about for years mostly by investors concerned about a Federal Reserve stuck on easy.
Facebook funnelling readers towards Covid misinformation – study
Emma Graham-Harrison and Alex Hern – The Guardian
Websites spreading misinformation about health attracted nearly half a billion views on Facebook in April alone, as the coronavirus pandemic escalated worldwide, a report has found.
Facebook had promised to crack down on conspiracy theories and inaccurate news early in the pandemic. But as its executives promised accountability, its algorithm appears to have fuelled traffic to a network of sites sharing dangerous false news, campaign group Avaaz has found.
Greece Reports Record Cases; U.K. Reviews Airports: Virus Update
Greece and Ireland moved to tighten rules after a jump in coronavirus cases. The U.K. is looking at testing people for Covid-19 at airports and Finland reinstated border controls.
Coronavirus outlier Sweden chooses its own path on face masks; Scandinavian country has not followed its neighbours in recommending coverings to limit infection
Richard Milne and Mehreen Khan – FT
Sweden does not mind standing out from the crowd on coronavirus, and the latest sign is on its refusal to introduce face masks. The Scandinavian country, renowned for its lighter-touch approach to Covid-19 regulations, is one of the few European countries not to recommend using face masks after neighbouring Norway, Denmark and Finland all changed their positions in the past week.
WHO urges rich countries to join global Covid-19 vaccine facility; Covax scheme aims to distribute 2bn vaccines but has struggled to raise funds
Anna Gross and Donato Paolo Mancini – FT
The World Health Organisation has urged wealthier member states to join its Covid-19 vaccine facility by the end of the month, amid fears it may not raise enough money to fund the global inoculation programme.
Coronavirus outlier Sweden chooses its own path on face masks
Richard Milne and Mehreen Khan – FT
Sweden does not mind standing out from the crowd on coronavirus, and the latest sign is on its refusal to introduce face masks. The Scandinavian country, renowned for its lighter-touch approach to Covid-19 regulations, is one of the few European countries not to recommend using face masks after neighbouring Norway, Denmark and Finland all changed their positions in the past week. “It is very dangerous to believe face masks would change the game when it comes to Covid-19,” Anders Tegnell, Sweden’s state epidemiologist, told the Financial Times.
Coronavirus, Contracts and the Constitution (op-ed)
Plaintiff lawyers respond to government lockdowns by seeking to bankrupt the insurance industry.
David B. Rivkin Jr. and J. Michael Luttig – The Wall Street Journal
Plaintiff lawyers want insurance companies to absorb the cost to business of the Covid-19 pandemic—and they’ve had some early successes. A federal judge in Kansas City, Mo., last week allowed salon and restaurant owners to proceed with a lawsuit claiming that Covid shutdowns constituted “direct physical loss or damage” covered by business-interruption policies. California lawmakers introduced legislation in June that would establish a presumption that Covid-19 qualifies for such coverage.
Colleges Embrace Covid Testing as Key for Safe Returns to Campus
Emma Court and Janet Lorin – Bloomberg
Many universities see Covid-19 testing as the only way to safely bring students back to campuses this fall, but their approaches vary as widely as their mascots. Some are requiring test results before a student gets to school, others are offering screenings upon arrival. Still others are relying on symptom screening and random surveillance testing. And the lucky ones with their own labs are putting them to work, regularly testing swabs or saliva from those on campus for the novel coronavirus.
It’s No Accident That Target Is a Covid Winner
Sarah Halzack – Bloomberg
The pandemic has thrown the entire retail industry a curve ball. Target Corp., though, is among the elite players in the industry that knows what to do with a difficult pitch. The big-box giant recorded an eye-popping 24% increase in comparable sales from a year earlier, far higher than the 9% advance analysts had estimated and its all-time highest quarterly gain on that measure. Online sales soared 195%, including strong increases in its drive-up and pickup options. Meanwhile, comparable sales in its brick-and-mortar stores boomed 10.9%.
Exchanges, OTC and Clearing
MIAX PEARL Receives Approval to Operate Equities Exchange; Launch Date Confirmed for September 25, 2020
PR Newswire (press release)
Miami International Holdings, Inc. (MIH), the parent holding company of the MIAX, MIAX PEARL and MIAX Emerald (collectively, the MIAX Exchange Group™), today announced that MIAX PEARL’s proposed rule filing to provide for the trading of equity securities under its exchange license has been approved by the U.S. Securities and Exchange Commission (SEC). Trading on MIAX PEARL Equities, MIH’s first equities exchange, is expected to begin on September 25, 2020.
Cboe Global Markets Sees Strong Debut for New Mini VIX Futures
Cboe Global Markets, Inc., one of the world’s largest exchange holding companies, announced the successful launch of its Mini Cboe Volatility Index futures, which began trading on Cboe Futures Exchange (CFE) on Sunday, August 9 at 5:00 p.m. CT with the opening of CFE’s global trading hours session.
Cappitech launches Singapore derivatives reporting service through DTCC link; Cappitech has extended its end point network with DTCC to support Monetary Authority of Singapore (MAS) OTC derivatives reporting.
Annabel Smith – The Trade
Cappitech has confirmed its launch of MAS OTC derivatives transaction reporting through a link with The Depository Trust & Clearing Corporation (DTCC).
Condensed Consolidated Financial Statements For the six months ended 30 June 2020
Presentation by HKEX Chief Executive Charles Li and Group Chief Financial Officer Vanessa Lau on 2020 Interim Results Announcement
HKEX 2020 Interim Results
Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Addition of 6.25 Basis Point Strike Price Intervals
Amendments to the Exercise Price Rule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts – Addition of 6.25 Basis Point Strike Price Intervals
SGX RegCo publishes its observations of Catalist sponsors
Singapore Exchange Regulation (SGX RegCo) today released its inaugural “Findings and Recommendations on Continuing Sponsorship Work” publication which aims to highlight areas for improvement following its observations from reviews and inspections of sponsors.
Fintech Startups Raised $8.8bn in H1 2020, a 20% Drop Year-on-Year
Recent years have witnessed a surge in the number of fintech investments, with record funding levels and rising valuations. However, the coronavirus outbreak altered that, causing a significant decrease in the overall venture capital deals, changing funding conditions, and creating uncertainty for many fintechs.
According to data presented by ForexSchoolOnline.com, fintech startups raised $8.8bn in the first half of 2020, a 20% fall year-on-year.
Fintech just made a big leap forward in this tiny country: Here’s why
Bojan Stojkovski – ZDNet
With its Adriatic coastline and breathtaking landscapes, Croatia is a Balkan country mostly known as a tourist destination. But now its fintech industry, especially the digital-payments sector, is also beginning to make its mark.
When Microblink, an R&D company based in Zagreb, Croatia, started out in 2013, it had to rely on its founders’ finances, because outside investments were hard to come by.
What Is B2B FinTech
Patricia Kemp – Forbes
Over the last few years, consumer fintech has been all the rage. And for good reason: consumer fintech startups have greatly improved the customer experience across many financial applications. This has led to a number of great outcomes including Intuit’s acquisition of Credit Karma for $7.1B earlier this year and Paypal’s acquisition of Honey for $4B at the end of ’19. And consumers are voting with their wallets: 14.2M Americans (6% of US adults with a checking account) now consider a challenger bank like Chime, Varo, etc to be their primary bank.
Vanguard becomes latest asset manager to adopt Charles River IMS; Vanguard will consolidate management of taxable money market funds on the cloud-based Charles River Investment Management Solution (IMS).
Annabel Smith – The Trade
Vanguard Group has become the latest participant to integrate the Charles River IMS across the investment process from pre-trade to post-trade and compliance. The firm will use the Charles River IMS to consolidate the management of taxable money market funds.
How Hackers Bled 118 Bitcoins Out of Covid Researchers in U.S.; Transcripts reveal University of California at San Francisco’s weeklong negotiation to free its ransomware-locked servers. The haggling worked, sort of.
Kartikay Mehrotra – Bloomberg
The negotiator entered the chatroom four days after the attack. Hackers had locked down several servers used by the epidemiology and biostatistics department at the University of California at San Francisco, and wanted a $3 million ransom to give them the keys. On Friday, June 5, at 6:50 p.m., they directed a UCSF negotiator to a webpage on the dark web—meaning beyond the realm of Google—that listed a dozen or so sets of apparent victims and demands. The whole thing looked oddly like a customer service portal. Just below the university’s entry was a flashing red timer counting down to a payment deadline. It read: 2 days, 23 hours, 0 minutes. If the counter reached zero, the ransom message said, the price would double.
Barclays’ Former Russian Bank Has Issued a Token-Collateralized Loans
Anna Baydakova – Coindesk
Expobank, the former Russian subsidiary of global investment bank Barclays has followed Silvergate and issued out a loan that uses tokens, in this case, WAVES, as collateral. The loan was made to an entrepreneur and tax consultant, Mikhail Uspensky, who bought WAVES in 2018 for a planned initial coin offering (ICO). When that fell through he tried staking them, before ultimately deciding to negotiate a token-collateralized loan with Expobank – who, it turns out, was receptive to experimenting with new loan issuances.
Cryptocurrency exchange and custodian Gemini selects Eventus Systems as trade surveillance provider
Eventus Systems, Inc., a multi-award winning global trade surveillance and risk management software platform provider, announced today that Gemini Trust Company, LLC (Gemini), a leading cryptocurrency exchange and custodian, has selected Eventus’ Validus platform for the exchange’s new trade surveillance solution. The signing marks the sixth major exchange in the digital asset space to turn to Eventus for trade surveillance.
BitMEX operator invests $1.5 million in Vietnamese crypto platform VCC Exchange
Yogita Khatri – The Block
BitMEX operator 100x Group’s investment arm 100x Ventures has invested $1.5 million in Vietnamese fiat-to-crypto trading platform VCC Exchange (VCCE). VCCE said the investment would help it for product development and marketing activities. The exchange is set to soon launch a peer-to-peer (P2P) trading platform, and a futures trading platform “in the near future.”
Binance-Owned WazirX Announces DeFi Project With Matic
Omkar Godbole – Coindesk
The Mumbai-based crypto exchange WazirX, one of the biggest in India, recently announced it is developing a decentralized finance (DeFi) product in partnership with Matic Network, a blockchain scalability platform. “We are launching an automated market maker (AMM) protocol and partnering with Matic Network to launch the protocol”, the exchange, a subsidiary of Binance, said in a blog post on Saturday. Automated market makers are algorithmic agents that make it easier to list and exchange cryptocurrencies without the help of an order book.
Goldman Sachs’ Digital Assets Team Seeks VP to Scale Up Crypto Operations
Rachel McIntos – Finance Magnates
Global finance giant Goldman Sachs is searching for a new vice president for its Global Markets Division’s London-based digital assets team. According to the job posting, the teamis focused on developing Goldman’s “distributed ledger technology (DLT) and blockchain efforts firmwide, including any potential initiatives in the cryptocurrency space.” The new VP will focus on identifying opportunities where blockchain and DLT “can add value.”
Steem vs Tron: The rebellion against a cryptocurrency empire
Tim Copeland – Decrypt
One spring day four years ago, Dan Notestein, a self-made millionaire and coder, padded down the wooden stairs to the basement of his ranch home in Blacksburg, Virginia. He sat down across from three other devs who were working on a startup called Steemit. Notestein, who was a contract worker on the project, settled in for what he figured would be just another day. It turned out to be anything but.
U.S. prosecutors unseal charges against five people accused of running crypto mining Ponzi scheme
Michael McSweeney – The Block
U.S. prosecutors have indicted a group of individuals in connection with conducting a Ponzi scheme centered around cryptocurrency mining fraud. The five people indicted — Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan and Jackie Aguilar — allegedly promised would-be investors outsized rewards for their investments in a membership-based program known as AirBit Club.
Riot Supercharges Mining Ops With 8,000 More Bitmain Rigs as Bitcoin Price Soars
Danny Nelson – Coindesk
Riot Blockchain is buying 8,000 additional S19 Pro Antminers from BitmainTech PTE as the publicly traded company looks to compete in a bitcoin mining scene getting more difficult by the day. Miners are flocking to take advantage of bitcoin’s recent price surge. But they can only do so by deploying massive operations, as evidenced by all-time high network difficulty rates and recent rig acquisitions.
Huobi Launches Global DeFi Alliance To Merge East and West
Michael Kapilkov – Cointelegraph
Huobi DeFi Labs has launched a global DeFi alliance, which is set to establish universal protocol standards for the DeFi space and improve communications within the DeFi ecosystem. The alliance will also conduct research on emerging DeFi protocols to help avoid future crises in the community. The alliance’s inaugural members are MakerDAO (MKR), Compound (COM), Nest (NEST), and dYdX (dYdX). In an interview with Cointelegraph, Huobi’s chief investment officer Sharlyn Wu said, “We have to partner with the entire ecosystem. But we want to work with the best of projects out there and make sure our users have access to them.”
UK Regulator Grants License to Digital Security Exchange Archax
Paddy Baker – Coindesk
The Financial Conduct Authority (FCA) has granted several licenses to digital securities exchange and custodian Archax – making it one of the world’s first authorized trading spaces for the asset-class. Archax said Wednesday it was now licensed as a multilateral trading facility (MTF) exchange, a broker, a cash and asset custodian. It is also the first crypto-asset firm to be registered with the FCA – a designation that will soon be mandatory for all companies working in the digital asset space from January next year.
Gemini now offers crypto trading and storing services to registered investment advisors
Yogita Khatri – The Block
Cryptocurrency exchange and custodian Gemini is now offering trading and storing services to registered investment advisors (RIAs). To that end, Gemini has partnered with Blockchange, a San Francisco-based crypto investing platform for professional wealth managers. The Blockchange-Gemini solution will allow RIAs to manage crypto assets within their client portfolios.
A juicy trade is helping push CME’s bitcoin futures to new records, traders say
Frank Chaparro – The Block
CME’s bitcoin futures market has been soaring towards $1 billion in notional open-interest, hitting an all-time high of $948 million during Monday’s trade. Launched in 2017, CME’s bitcoin futures contract has seen its open interest grow at a fast clip since the end of July. Indeed, the aggregate open interest across the largest bitcoin futures markets has been increasing steadily from around $2 billion in mid-March to nearly $6 billion at last check.
Archax becomes first FCA regulated UK digital securities exchange; Archax has become the first digital securities exchange in the UK to be regulated by the FCA, as well as receiving FCA crypto asset registration.
Annabel Smith – The Trade
Institutional digital asset exchange operator Archax has become the first Financial Conduct Authority (FCA) regulated digital securities exchange alongside receiving crypto asset registration from the UK watchdog.
Chinese AI Giant Blacklisted by Trump Thrives in Virus Era
Lulu Yilun Chen – Bloomberg
World’s largest AI startup SenseTime sees business boom; SenseTime is said to expect 80% revenue growth this year
The future of China’s largest artificial intelligence company was thrown into question last year when it was blacklisted by the Trump administration. Today, SenseTime is thriving with growing demand for its facial recognition software, especially as local governments in China adopt its technology to battle the coronavirus.
DNC Nominates Joe Biden to Lead Nation Through Pandemic; Jill Biden touts her husband’s character; Bill Clinton, Colin Powell criticize President Trump’s record
Joshua Jamerson and Chad Day – WSJ
Democrats formally made Joe Biden their presidential nominee, a role he has sought for more than three decades, capping a come-from-behind victory in the primaries he secured with a broad coalition of his party’s voters.
‘Climate Donors’ Flock to Biden to Counter Trump’s Fossil Fuel Money
Lisa Friedman – NY Times
In 2009, the Obama administration’s environmental team called a group of climate activists to the White House to deliver a message: Climate change doesn’t sell and only provokes economic attacks from the right that are too difficult to counter.
These companies are giving their employees the day off to vote
Jordan Valinsky – CNN
With an ongoing pandemic, the logistics of voting in this year’s presidential election are making many Americans anxious — even more so than in previous years.
The calls to make election day a national holiday have grown, allowing people to have sufficient time to get to the polls. Absent federal action on that (it ain’t happening before November 3), Corporate America has been stepping up in a big way to give their employees the day off to vote.
Coca-Cola is the latest major company to give its employees a day off for the upcoming 2020 US presidential election.
EU hands CCP members a narrow win on skin in the game
Clearing members could use the final rules to push for higher CCP capital globally
Risk.net (subscription required)
You win some, you lose some. After an almost four-year battle between central counterparties and their clearing members about who pays when a clearing house fails, European Union legislators have been able to strike a compromise. The result leaves both sides feeling satisfied on some scores, but disappointed on others.
ESMA recommends priority topics in AIFMD review
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has written to the European Commission (Commission) highlighting areas to consider during the forthcoming review of the Alternative Investment Fund Managers Directive (AIFMD).
The Ombudsman: FINRA’s Confidential, Independent Resource
An ombudsman is a neutral party that acts as an impartial, confidential and independent resource that informally works to assist in finding solutions to issues or concerns an individual may have with an organization. And FINRA’s Ombudsman is no different. On this episode, we sit down with FINRA Ombudsman Cindy Foster to learn more about the office and how she works to prevent real or perceived conflicts of interest and, when necessary, recommend changes to ensure fair policies and procedures remain in place.
SEC Names Diana Stoltzfus as Deputy Chief Accountant
The Securities and Exchange Commission today announced the appointment of Diana Stoltzfus as a Deputy Chief Accountant (Professional Practice Group) in the agency’s Office of the Chief Accountant (OCA).
NFA orders Connor Paul Campo and James A. Hatzigiannis, former associated persons, to not reapply for NFA membership
NFA has ordered Connor Paul Campo and James A. Hatzigiannis to not reapply for NFA membership or act as a principal of an NFA Member. Campo and Hatzigiannis were associated persons (AP) of former Chicago, Ill. NFA Member introducing broker Long Leaf Trading Group, Inc. (Long Leaf).
Investing and Trading
Markets Tell the Fed It’s Finally Getting an Edge on Inflation
Liz McCormick and Craig Torres – Bloomberg
Bond gauges showing higher expected prices count as Fed gain; Investors, Fed remain unfazed as price pressures nudge higher
The $20 trillion U.S. Treasury market is giving the Federal Reserve a thumbs-up for its efforts to revive inflation after the coronavirus pandemic threatened to inflict a damaging bout of deflation on the U.S. economy.
Investors increasingly unsettled by ‘overvalued’ markets; Fund managers are upbeat even as they fret about prices of stocks, bonds and gold
Adam Samson – FT
Investors are worried that the sharp rally across asset classes since the darkest days of the coronavirus crisis has left them “overvalued”, a key survey has shown.
S&P 500 hits all-time high despite COVID-19 devastation
Noah Manskar and Thornton McEner – NY Post
The S&P 500 hit a fresh all-time high Tuesday as the US stock market continued its dizzying rally despite the coronavirus and the economic crisis it has caused. The benchmark index climbed about 0.4 percent to a peak of 3,395.06, surpassing the previous intraday record of 3,393.52 reached on Feb. 19 before the virus outbreak sparked an historic market crash. It closed at 3,389.78, surpassing the previous record close of 3,386.15, also set Feb. 19.
NY MTA Becomes Second to Tap Fed as Banks Seek Higher Yields
Amanda Albright and Danielle Moran – Bloomberg
The Federal Reserve bought $451 million of notes sold by New York’s Metropolitan Transportation Authority, making the beleaguered transit agency the second to borrow from the central bank’s $500 billion lending program for states and cities.
The Fed charged a true interest cost of 1.92%, “resulting in savings of over 85 basis points compared to the public market levels,” according to an emailed statement from MTA spokesperson Tim Minton.
Fidelity Assets Under Management Reach Record $3.3 Trillion
Michael McDonald – Bloomberg
Fidelity Investments’ assets under management reached a record of $3.3 trillion at the end of June, a 15% increase from the year prior, as a surge in stock trading and new accounts helped bring in money.
Customers opened almost 1.2 million retail accounts, the Boston-based company said Tuesday in a report, boosting flows to the firm’s mutual funds and exchange-traded funds. Equity trading more than doubled to an average of 2.3 million daily transactions in the second quarter as markets rebounded.
Environmental, Social and Corporate Governance
Airlines ask passengers to subsidise green fuel to help cut emissions; Industry under pressure to promote sustainable, but significantly more expensive, fuel
Peggy Hollinger – FT
Selling flights during a global pandemic is not easy, never mind asking passengers to subsidise the fuel bill. But airlines such as SAS and Lufthansa are doing exactly that in a bid to reduce carbon emissions. They are offering passengers the option to offset emissions from their flights with contributions to the cost of using sustainable fuel, which is less polluting than traditional kerosene over its life cycle, but also significantly more expensive.
Global Warming Could Unlock Carbon From Tropical Soil; Warming soils in the tropics could cause microbes to release carbon dioxide from storage. One scientist called the finding “another example of why we need to worry more.”
Gabriel Popkin – NY Times
Humble dirt could pack an unexpected climate punch, according to a new study published Wednesday in the journal Nature. An experiment that heated soil underneath a tropical rainforest to mimic temperatures expected in the coming decades found that hotter soils released 55 percent more planet-warming carbon dioxide than did nearby unwarmed areas.
Coal Is in Spectacular U.S. Decline Despite Trump Orders
Justin Fox – Bloomberg
Last year, there were 38 days when U.S. utilities got more electricity from hydroelectric, wind and solar generation than from coal, according to the Institute for Energy Economics and Financial Analysis. So far this year, according to the IEEFA and my own crunching of U.S. Energy Information Administration data, it’s already 122 — including every day in the month of April and all but three in May.
Trillion-Dollar Fund Manager Taps Alternatives in Hunt for Yield
Joanna Ossinger – Bloomberg
Nuveen sees potential in private credit, mortgage-backed debt; Fixed-income head also warns on peril of concentration risk
Investors should consider alternatives such as private credit as they search for positive yield in a world of low or negative interest rates, according to asset manager Nuveen LLC.
BlackRock Sees Value in Some Pandemic-Battered Assets
Irene Garcia Perez and Priscila Azevedo Rocha – Bloomberg
Energy, travel, financials attractive to asset manager; Credit still a good option for investors to hit income targets
Energy, aviation and lodging firms hit hard by the coronavirus pandemic could offer handsome returns for high-yield investors, according BlackRock, the world’s largest asset manager.
Ex-Apollo Partner to Chronicle Insider’s View of Private Equity
Sonali Basak – Bloomberg
After more than a decade of experience at the world’s top private equity firms, Sachin Khajuria’s next move is writing about it. The former partner at Apollo Global Management Inc. is getting the book “Two and Twenty” published in a deal with the Penguin Random House group, according to a person briefed on the matter, who asked not to be named because the information isn’t public.
Schroders announces permanent work from home scheme; Schroders announces that it will keep work from home and flexible working conditions in place for its employees on a permanent basis.
Annabel Smith – The Trade
Global asset management firm Schroders has announced that it has embraced flexible working conditions, including working from home, on a permanent basis.
What the ‘Tech Exodus’ Could Mean for Silicon Valley; Creative clustering has been the Bay Area’s secret sauce for innovation. What happens when technology workers go remote, permanently?
Laura Bliss – Bloomberg
Long before the pandemic, pundits predicted that remote work would reshape Silicon Valley. Newspaper stories about California tech workers setting up home offices in more affordable West Coast locales date back to the 1990s. In the most recent explosion of Bay Area housing prices, some startups made a splash for their remote-only policies, and at least one offered a “de-location package” to incentivize moves anywhere with lower housing costs.
Kuwait Can’t Pay Salaries Beyond October, Minister Tells Parliament
Fiona MacDonald and Abeer Abu Omar – Bloomberg
Kuwait has 2 billion dinars ($6.6 billion) worth of liquidity in its Treasury and not enough cash to cover state salaries beyond October, Finance Minister Barak Al-Sheetan said.
Goldman’s 1MDB Settlement Gives Malaysia Much-Needed Debt Relief
Anisah Shukry and Yantoultra Ngui – Bloomberg
The $3.9 billion 1MDB settlement that Malaysia struck with Goldman Sachs Group Inc. provides a timely boost to the government’s coffers just as it faces soaring debt. The payout equates to nearly one-third of last year’s budget deficit, and 1.07% of 2019 gross domestic product, according to estimates from Bloomberg Economics’ Tamara Mast Henderson. The amount is “quite significant” and could help the government finance its fiscal stimulus program, said Mohd Afzanizam Abdul Rashid, chief economist at Bank Islam Malaysia Bhd.
A Guide to Europe’s Newest ‘Safe Asset’ and Rival to U.S. Treasuries
Priscila Azevedo Rocha – Bloomberg
As well as representing a significant political breakthrough, the European Union’s landmark pandemic rescue fund could prove momentous for the continent’s fractured financial markets. That’s because the 750 billion euro ($892 billion) recovery package will trigger the biggest-ever splurge in joint borrowing by the bloc’s 27 members. The hope for some is that the exercise will lead to the creation of regional “safe asset” bonds that could rival U.S. Treasuries — a goal for European policy makers even before the common currency was created two decades ago.
South Africa Struggles to Contain Coronavirus While the Economy Crumbles
Antony Sguazzin and Pauline Bax – Bloomberg
While such African countries as Tanzania and Burundi chose to simply ignore the dangers of Covid-19, or lagged on testing and contact tracing—like Nigeria—South Africa did everything by the book. In March, shortly after the first coronavirus case in the country was detected, it shut its borders, instituted one of Africa’s strictest lockdowns, including bans on tobacco and alcohol sales, and rolled out a program to test millions of citizens. President Cyril Ramaphosa won plaudits for mobilizing popular support to help the country weather the disease. His health minister, medical doctor Zweli Mkhize, crisscrossed the nation to carry the president’s message.
Brexit Party politician Caroline Jones quits Welsh Parliament group
The Brexit Party is down to three members in the Welsh Parliament after former UKIP Senedd leader Caroline Jones quit on Tuesday. The South Wales West politician accused the party of an “anti-devolution” stance that is against her principles. Group leader Mark Reckless has vowed to campaign to scrap the Senedd, proposing a directly-elected first minister instead. The Brexit Party group wished her well. Ms Jones was one of seven UKIP politicians elected to the Senedd in 2016.
Brexit trade talks set to stall again over British truckers’ EU access; Brussels warns that UK demands on haulage are too close to single-market rights
Peter Foster in London and Sam Fleming – FT
Brussels has rejected the UK’s opening demands for continued wide-ranging access to the EU for British truckers, setting the stage for a clash when Brexit trade negotiations resume on Wednesday.
London’s ‘complacency’ puts Scottish independence back in play; Brexit and UK government’s haphazard approach to pandemic are fuelling the urge of Scots to go it alone
Mure Dickie in Arbroath and George Parker- FT
Among the many casualties of the coronavirus lockdown were events marking the 700th anniversary of the Declaration of Arbroath, a 1320 document signed by the lords and clerics of Scotland that includes the stirring line: “For so long as a hundred of us remain alive, we will never in any degree be subject to the dominion of the English.”
Hangover Cure Successfully Tested on Drunk Subjects in Finland
Kati Pohjanpalo – Bloomberg
A group of Finnish researchers believe they’ve discovered what people have spent centuries searching for: a cure for hangovers. A dose of 1,200 milligrams of amino acid L-cysteine was found to reduce alcohol-related nausea and headache, while a dose of 600 milligrams helped alleviate stress and anxiety, according to a study published in the journal Alcohol and Alcoholism by researchers at the University of Helsinki and the University of Eastern Finland.
Working From Home: Tips for Managers to Build Successful Remote Teams
Arianne Cohen – Bloomberg
Four years ago, construction at MIT’s Sloan School of Management forced 140 staffers to work in temporary offices a mile away from the school’s main buildings. Senior associate dean Peter Hirst, who runs Sloan’s executive education training, used the opportunity to launch a pilot program that mixed employees in both locations with others working from home. Here’s what he learned about running a successful hybrid team: