FDIC Chairman Martin Gruenberg to Resign Following Report Detailing Sexual Harassment at Agency

May 21, 2024

First Read

Hits & Takes
John Lothian & JLN Staff

Today we have another video from our FIA Boca coverage sponsored by Wedbush, this one with GFO-X CEO Arnab Sen. The second video is the first of our coverage from our 2024 Options Conference JLN Industry Leader video series sponsored by the OCC.

Martin Gruenberg, the chairman of the FDIC, said in an email to staff he would resign once a successor has been confirmed, bowing to criticisms about a toxic work environment at the commission. This scenario avoids turning the commission over to the Republican vice chairman as acting chairman, The Wall Street Journal reported.

How important is artificial intelligence? According to a Bloomberg story, JP Morgan will be training every new hire on AI, “preparing them for a technology Chief Executive Officer Jamie Dimon has likened to the impact of the printing press and steam engine.”

The Financial Times has an obituary for Ivan Boesky, the infamous Wall Street arbitrageur known for his insider trading linked to the major deals of the 1980s, who died at 87. Boesky gained fame as a mergers expert with an uncanny ability to predict corporate combinations, amassing a fortune he openly flaunted. His notorious 1986 commencement speech at UC Berkeley, where he praised greed, inspired the iconic “greed is good” catchphrase in Oliver Stone’s film Wall Street. Boesky’s actions made him a symbol of Wall Street’s greed and malfeasance. The New York Times also has an obituary on Boesky.

Intercontinental Exchange, Inc., announced the results of its 2024 Annual Meeting of Stockholders held on May 17. All ten director nominees were elected to one-year terms, each receiving a majority of votes cast. Stockholders approved an advisory resolution on executive compensation and ratified Ernst & Young LLP as the independent registered public accounting firm for 2024. A stockholder proposal for an independent board chairman was not approved, in line with the board of directors’ recommendation. Broadridge Financial Solutions, Inc. verified and tabulated the voting results. A replay of the meeting is available at www.ir.theice.com.

Join Bloomberg on Thursday, May 23 for “US Equity Market Structure 2024: Financial Markets Innovation,” an event exploring the evolving landscape of US equities markets. Discover the latest SEC market structure rules, innovative liquidity solutions, and cutting-edge mechanisms reshaping institutional equity trading. Learn about the paradigm shift in retail investing driven by lower trading costs, advanced analytics, and 24-hour markets. The event kicks off with registration at 4:00 PM, followed by opening remarks from Larry Tabb of Bloomberg Intelligence. Highlights include a fireside chat with Haoxiang Zhu from the SEC, panels on retail brokerage and institutional equities market structure featuring leaders from Webull, Wells Fargo, Robinhood, NASDAQ and Jefferies, and more. The evening concludes with a fireside chat with Doug Cifu, CEO of Virtu Financial, and a networking reception.

The Global FX Division (GFXD) and the Foreign Exchange Professionals Association (FXPA) are hosting a webinar on June 11, 2024, from 11:00 a.m. to 12:00 p.m. EST (4:00 p.m. to 5:00 p.m. BST) to discuss the FX market’s transition to a T+1 settlement cycle for U.S. securities effective May 28, 2024. The webinar will cover key themes such as FX funding and liquidity, CLS, FX settlement, and market structure adjustments post-transition. Speakers include Janet Dawson (GFMA), Lisa Danino-Lewis (CLS), Rich Turner (Insight Investment), Nigell Todd (Fidelity International), and Jordan Barnett (BNY Mellon Markets). The event is free and open to all FX market participants but closed to media and industry analysts.

Yesterday, the SEC published links to opinions and orders concerning both litigated and settled administrative proceedings instituted by the commission involving the following individuals and firms: George Rauch (f/k/a George B. Fasciano), Raymond Lawrence Lent (DBA The Putney Financial Group and Registered Investment Advisors), Quantstamp, Inc., Synchronoss Technologies, Inc., et al., EZTD Inc., Bayerische Motoren Werke Aktiengesellschaft, BMW of North America, LLC and BMW US Capital, LLC, Chatham Asset Management, LLC and Anthony Melchiorre and Kershner Trading Americas, LLC.

Peter Babucke started a new position as vice president, senior vendor manager at Allianz Global Investors. I first encountered Peter when he was at the Tokyo Stock Exchange, Inc., where he worked for 10 years.

In a speech yesterday, ASIC Chair Joseph Longo, accompanied by Executive Director of Markets Calissa Aldridge and Digital and Legal Transformation Lead Graham Jefferson, addressed the Select Committee on Adopting Artificial Intelligence emphasizing ASIC’s support for the safe and responsible use of AI in Australian businesses and highlighting the potential benefits and risks associated with AI tools. He outlined ASIC’s proactive engagement with industry and regulatory peers to monitor AI developments and mitigate consumer harms. Longo also announced an AI Regulators Symposium in partnership with the University of Technology Sydney to discuss AI’s impact on regulation. ASIC aims to be a digitally enabled and data-informed regulator by 2030, with current laws applying equally to AI and non-AI systems to protect consumers and investors.

We are in the midst of the spring camping season, but also the spring storm season and it is always good to be prepared for when the power goes out. The Wall Street Journal has a story for both titled “16 Emergency Preparedness Essentials to Stock Up on Now, According to Pros” with the subheadline “Here’s everything you should have in your home’s kit in case of a blackout, superstorm or yes, pandemic.” Yes, there is overlap between camping and blackouts.

I know you may have come to depend on The New York Times for your summer reading list, but The Wall Street Journal has a summer reading list – not from its editors, but from JP Morgan. The story is titled “J.P. Morgan Releases 25th Annual Summer Reading List.”

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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Our most read stories from our previous edition of JLN Options were:
Natural Gas Skew Ratio (chart) from CME Group.
CME Group Volatility Index (CVOL) from CME Group.
Nasdaq to market new options strike listing tech to other exchanges from Waters Technology. ~JB

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

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Sponsored Content
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Arnab Sen Discusses Institutionalization of Digital Asset Markets at FIA Conference
JohnLothianNews.com

Arnab Sen, co-founder and CEO at GFO-X, shared insights on the institutionalization of cryptocurrency trading during an interview for the JLN Industry Leader series sponsored by Wedbush at the FIA’s International Futures Conference in Boca Raton, FL.

Watch the video »

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Randolf Roth Discusses Regulatory Challenges and Market Growth in JLN Industry Leader Series
JohnLothianNews.com

In a recent interview as part of the JLN Industry Leader Series at the Options Industry Conference sponsored by the OCC, Randolf Roth, executive member of the Eurex board, shared insights into the evolving cryptocurrency and derivatives markets, highlighting both regulatory challenges and market growth.

Watch the video »

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What a World Growing Older Fast Means for Investing
Alice Atkins and Sujata Rao – Bloomberg
Idanna Appio spent 15 years at the Federal Reserve Bank of New York analysing the history of sovereign debt crises. Now, as a fund manager at the $138 billion First Eagle Investments, she’s reached a conclusion: US Treasury bonds are too risky to hold. The call looks far beyond the timing of much-anticipated Federal Reserve rate cuts. It’s tied to a new era of faster inflation, higher government health spending and bigger deficits. And behind all of that? The fact that the world is getting older, fast, and it’s time to get portfolios ready.
/jlne.ws/44O1e7F

***** It means I have carpal tunnel when I point and click trade, that is what it means.~JJL

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Jamie Dimon Says His Retirement Is Getting Closer. Finally; JPMorgan chief executive says his timeline ‘isn’t five years anymore’
Alexander Saeedy – The Wall Street Journal
Jamie Dimon acknowledged that he will likely be leaving his role as chief executive officer of JPMorgan Chase in fewer than five years. For at least the past decade, Dimon has answered questions about potentially retiring with the same boilerplate response: five more years. On Monday, the 68-year-old admitted that the clock is finally starting to tick.
/jlne.ws/3V7dhJX

****** Who will retire first, Jamie Dimon or CME Group’s Terry Duffy? Dimon is 68.~JJL

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This Man Did Not Invent Bitcoin; For years, Craig Steven Wright, an Australian cryptocurrency enthusiast, claimed to be Satoshi Nakamoto, the mysterious creator of Bitcoin. Then the courts got involved.
David Yaffe-Bellany – The New York Times
For much of its existence, the cryptocurrency company nChain was governed by a golden rule of office politics: It was not a good idea to challenge Craig Steven Wright, the chief science officer. At nChain’s London offices, Dr. Wright, an Australian computer scientist, was treated as a sort of philosopher king. He wore three-piece suits and drove a Lamborghini. A middle manager would tape Dr. Wright’s ramblings about obscure technical matters and then share the recordings with a staff of researchers, who were instructed to turn his musings into patents.
/jlne.ws/3yv8SaX

***** The verdict was Craig Wrong!~JJL

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Ivan Boesky, convicted trader, 1937-2024; Arbitrageur came to fame as a mergers expert but his scandal helped define Wall Street excess
Stephen Gandel – Financial Times
Ivan Boesky, a Wall Street arbitrageur whose trading on insider information connected to the megadeals of the 1980s made him a symbol of Wall Street greed and malfeasance, has died at 87. Boesky rose to fame as a mergers expert with a seemingly superhuman ability to foresee corporate combinations. Wall Street’s dealmaking was suddenly on overdrive and minting fortunes, including one for Boesky that he happily flaunted. His 1986 commencement speech to University of California, Berkeley business school graduates in which he extolled the virtues of greed, helped inspire the Gordon Gekko catchphrase in Oliver Stone’s later movie Wall Street that “greed is good”.
/jlne.ws/3V87p2W

****** I can remember when being a Wall Street arbitrageur was cool.~JJL

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Monday’s Top Three
Our top clicked item Monday was Jack Bogle, Haystacks, and Putting the Interest of the Clients First, Prepared Remarks Before the 2024 Conference on Emerging Trends in Asset Management from SEC Chair Gary Gensler. Second was a tie between the Cboe post on LinkedIn with a picture of the new Cboe-branded cabs in London and the Amazon.com page for “The Great Mutual Fund Trap: An Investment Recovery Plan” by Gregory Baer and Gary Gensler. Third was a tie between edie kicks off week of content and online events dedicated to the circular economy, from edie, and Nasdaq to market new options strike listing tech to other exchanges, from Waters Technology.

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Lead Stories

FDIC Chairman Martin Gruenberg to Resign Following Report Detailing Sexual Harassment at Agency; Gruenberg plans to stay until successor is confirmed, avoiding scenario that would leave a Republican as acting chairman
Rebecca Ballhaus and Andrew Ackerman – The Wall Street Journal
Federal Deposit Insurance Corp. Chairman Martin Gruenberg bowed to pressure to resign from the bank regulator after an external investigation found widespread sexual harassment at the agency and lawmakers of both parties berated his leadership. In an email to staff Monday, Gruenberg said he would resign once a successor had been confirmed, avoiding a scenario that would leave FDIC Vice Chairman Travis Hill, a Republican, as the agency’s acting chairman.
/jlne.ws/4atmnF9

The Crypto Industry Is Trying to Elect Political Allies. The Stakes Couldn’t Be Higher; l Coinbase, Kraken and others are fighting for survival after a regulatory crackdown
Caitlin Ostroff and Vicky Ge Huang – The Wall Street Journal
Crypto companies are fighting for survival after a regulatory crackdown. Their latest strategy: spending big on this year’s elections. The industry has amassed a formidable war chest and is working to elect politicians it sees as allies and defeat those who are critical. A trio of super political-action committees has together raised more than $85 million, one of the largest amounts among PACs engaged in the 2024 elections.
/jlne.ws/4awX05v

US Wheat Comes to Rescue Market Plagued by Russian Shortfall
Michael Hirtzer – Bloomberg
Wheat is one of the world’s most-vital crops. The grain is used in staples like bread, couscous, chapatis and noodles – and high prices for the commodity have a long history of kickstarting unrest. Current global inventories are tight, and a spat of bad weather means analysts have been chopping estimates for the next harvest from Russia, the world’s largest exporter. Benchmark prices have jumped more than 10% just this month.
/jlne.ws/3yBwoTr

Crypto Firm Grayscale Turns to Goldman Alumni for New CEO; Goldman’s Peter Mintzberg will join as CEO in August; Firm’s Bitcoin ETF has seen outflows of $17.6 billion in 2024
Emily Graffeo – Bloomberg
Michael Sonnenshein is stepping down as chief executive officer of Grayscale Investments after a decade-long stint at the cryptocurrency asset manager, and will be replaced later this year by Peter Mintzberg. Mintzberg, currently the global head of strategy for asset and wealth management at Goldman Sachs Asset Management, will become the new CEO on August 15, Grayscale said in a press release. In the interim, Chief Financial Officer Edward McGee will lead the firm, Grayscale said.
/jlne.ws/3UP1u1F

***** Here is The Wall Street Journal’s version of this story.~JJL

Protectionism will ‘haunt’ renewable energy industry, says China solar executive; Chinese companies and officials hit back against US and European trade barriers
Edward White – Financial Times
A senior executive at one of China’s biggest solar equipment groups has called on western governments to “let the best technology win”, as Chinese companies and officials hit back against rising protectionism in the US and Europe. Zhou Shijun, who leads global marketing for Arctech, a manufacturer of mounting systems for large-scale solar installations, said countries risked slowing their response to climate change by introducing trade barriers on Chinese products.
/jlne.ws/3ymklcE

Joe Biden’s pollution crackdown deals new blow to LNG developers; Tighter air quality standards follow a pause on new licences for terminals and tougher EU emissions rules
Myles McCormick – Financial Times
Environmental groups plan to exploit new air pollution rules by the Biden administration to step up their campaign against the development of multibillion dollar natural gas export terminals in the US. New air quality standards will require the Federal Energy Regulatory Commission to more closely examine the impact of liquefied natural gas projects on the surrounding air quality, raising the bar for which projects will be allowed to proceed to construction.
/jlne.ws/4dI946R

Exclusive: Conservative investor pulls JPMorgan resolution, cites changes addressing ‘politicized finance’
Ross Kerber – Reuters
A conservative shareholder has withdrawn a resolution filed for a vote at Tuesday’s annual meeting of JPMorgan, according to the investor’s representative, who said the move reflects changes the Wall Street bank has made to take more account of diverse viewpoints. JPMorgan’s meeting was to include Proposal 11, a call for the bank to report on how the bank’s policies impact employees “based on their religion (including religious views) or political views.”
/jlne.ws/44MHQbb

The Highest Paid CEOs of 2023; Stock awards push median package to a record $15.7 million; tech executives top the list
Theo Francis – The Wall Street Journal
The chiefs of America’s biggest companies reached new pay heights in 2023 as stock awards swelled the value of compensation packages. Half of the executives in a Wall Street Journal analysis made at least $15.7 million, a record for median CEO pay in the annual survey, with several making more than $50 million. Median pay for the same companies a year earlier was about $14.5 million.
/jlne.ws/3KbGQ6U

Jamie Dimon says the end to his time as JPMorgan CEO is ‘not 5 years anymore’
David Hollerith – Yahoo Finance
Jamie Dimon had some new things to say Monday about his own future plans, making it clear the CEO of JPMorgan Chase (JPM) now envisions a day when he will no longer run the largest US bank. His timetable is “not five years anymore,” Dimon said while speaking at his bank’s annual investor day in New York City.
/jlne.ws/4bnInTe

Is Net Zero by 2050 Still Possible? Yes, But It’ll Cost 19% More; A new BloombergNEF report shows global climate goals are becoming harder to achieve the longer the world remains addicted to fossil fuels.
Eamon Farhat and Akshat Rathi – Bloomberg
Governments and companies need to spend an extra $34 trillion on the clean energy transition between now and 2050 to reach net-zero emissions, according to BloombergNEF. The research group’s 250-page New Energy Outlook report, which crunches 18 million datapoints, says that amount is 19% more than what’s expected in its base case scenario. The finding indicates that sectors from electric vehicles and renewable energy to power grids and carbon capture need extra support.
/jlne.ws/4dSv0MH

Banks Are Now Targeting Some of Private Credit’s Riskiest Debt; European leveraged finance markets see return of PIK bonds; Hot market lowers costs for refinancing private debt
Eleanor Duncan and Kat Hidalgo – Bloomberg
Investment banks including Goldman Sachs Group Inc. are pitching broadly syndicated refinancings of some of the riskiest types of private credit, in the latest sign that Wall Street is trying to poach back business from direct lenders. Bankers in Europe are speaking with buyout firms about options for private payment-in-kind debt their companies took on when broadly syndicated markets were much more volatile and expensive. Now that conditions have improved, institutional lenders are becoming increasingly assertive.
/jlne.ws/3QVnMxw

Jamie Dimon says JPMorgan will pick a new chief executive within 5 years; One of Wall Street’s longest-serving leaders says search for his successor is under way
Joshua Franklin – Financial Times
Jamie Dimon told investors on Monday that the search for his eventual successor was “on the way” as the longtime JPMorgan Chase chief executive indicated that he would step down as CEO within five years. Dimon is one of Wall Street’s longest-serving leaders, and the topic of his eventual successor is one of the US banking industry’s most frequent topics of discussion, as well as an area of concern for investors worried that any replacement could struggle to replicate his success.
/jlne.ws/3QUQGhn

An Important Step for India’s Margin Rules
ISDA
When Group-of-20 (G-20) leaders agreed an outline of the post-crisis regulatory framework in Pittsburgh in 2009, they were very clear that global standards should be implemented consistently in a way that ensures a level playing field and avoids fragmentation of markets. That has not always been the case in practice, but the Reserve Bank of India (RBI) recently finalized initial margin (IM) requirements for non-cleared derivatives that adhere closely to the spirit of that G-20 edict, enhancing the efficiency and competitiveness of the local market.
/jlne.ws/44PuwCK

The World Is Ignoring the Other Deadly Kind of Carbon; Not only is black carbon terrible for human health, but ever-fiercer wildfires are covering the Arctic with the dark particles, accelerating melting.
Matt Simon – Wired
Once again, vast expanses of Canadian wilderness are on fire, threatening towns and forcing thousands to flee. It appears to be a breakout of “zombie fires”: wildfires from last year that never actually went out completely but carried on smoldering underground, reigniting ground vegetation again this year. They’ve been pouring smoke-once again-into northern cities in the United States. That haze is loaded with a more obscure form of carbon, compared to its famous cousin CO2: black carbon. By May 16, the fires’ monthly carbon emissions surpassed 15 megatons, soaring above previous years. Black carbon consists of tiny particles generated from the incomplete combustion of fuels-whether that’s Canadian trees and soils, cooking fuels like wood and charcoal, or coal.
/jlne.ws/3yBtRbU

When it comes to capital market regulation, market input is essential to avoid taking a hammer to crack a nut, says FCA; Speaking at an industry event this week, Sarah Pritchard, executive director, markets and international at the FCA, highlighted key themes at the fore of the watchdog’s focus, including: the impact of geopolitical pressures on market development, the rationale behind recent unbundling rules, and the future outlook for insurgent technologies.
Claudia Preece – The Trade
“Proportionate capital markets reform” is the way forward asserted Sarah Pritchard, executive director, markets and international at the UK’s Financial Conduct Authority (FCA) at the International Capital Market Association’s ‘City Week’ event yesterday, 20 May.
/jlne.ws/4dInvrD

In conversation with… Substantive Research’s Mike Carrodus; The TRADE sits down with Mike Carrodus, chief executive and founder of Substantive Research to unpack the UK’s Financial Conduct Authority’s (FCA) recent bundling rules, discussing the most important considerations for traders, expected speedbumps, and the state of play across the UK, US, and EU.
Claudia Preece – The Trade
When it comes to the FCA’s consultation on investment research funding and payment rules, what are the most important aspects from the trading perspective?
Things are definitely evolving and all the noise creates more discussion. In terms of initial impact we took a first look and the main thing was that there were no major stumbling blocks in the consultation paper, no real sting in the tail. For asset managers there is nothing operationally, or from a regulatory perspective, that will act as a real dealbreaker, however there are some things that asset managers will either need clarifying or will have to make a call on in terms of interpretation.
/jlne.ws/44R5h2S

Ukraine Invasion

‘Code 9.2’: The secretive Ukrainian drone unit tasked with dropping mines into Russia
Nick Paton Walsh, Mick Krever, Kosta Gak and Brice Laine – CNN
Dusk brings an urgent race to hide before dark. The “Code 9.2” drone unit, from the 92nd assault brigade, are moving into a new launch position from where they are about to conduct a rare and potent mission: flying drones into Russia and dropping mines onto key roads inside enemy territory.
/jlne.ws/4dKQTgF

Russia accuses Ukraine of using US and French missiles in an attack on one of its border regions
Mia Jankowicz – Business Insider
Russia has claimed that Ukraine used French- and US-supplied missiles in an attack on one of its border regions. Russia’s Ministry of Defence said on Saturday that it had repelled an attack on the border region of Belgorod by four French-made Hammer missiles and two US-made HARM anti-radar missiles. Its foreign ministry also claimed that Russian forces had earlier shot down multiple Western weapons, and said that British Storm Shadow cruise missiles and Czech Vampire rockets also featured in the attack.
/jlne.ws/3UQ94Jd

Czech ammunition buy for Ukraine nears first delivery, faces headwinds
Elisabeth Gosselin-Malo – DefenseNews
Three months after kickstarting a bulk ammunition purchase for Ukraine, Czech officials share divergent assessments of how it’s going. “The Czech-led initiative to fund and procure urgently artillery ammo for Ukraine is progressing steadily – the first 180,000 shells have been contracted and should arrive by June,” FrantiÅ¡ek Å ulc, the first Deputy Minister of Defense of the Czech Republic told Defense News during the IDEB defense fair, held here May 14-16.
/jlne.ws/4bMxdXX

The West always gives Ukraine weapons one year after it actually needs them, Zelenskyy says
Thibault Spirlet – Insider
Ukrainian President Volodymyr Zelenskyy said the country’s Western allies always give it weapons one year after it actually needs them. “Every decision to which we, then later everyone together, comes to is late by around one year,” Zelenskyy told Reuters on Monday. “But it is what it is: one big step forward, but before that, two steps back,” he added.
/jlne.ws/3UORs0q

Germany Warms to US Plan to Tap Frozen Russian Assets for Ukraine Funds; G-7 to hone options this week in Italy, June decision likely; US seeks income from assets to back loan up to $50 billion
Viktoria Dendrinou, Michael Nienaber, and Kamil Kowalcze – Bloomberg
In an about face, German officials are ready to support a US plan to leverage the future revenue generated from frozen Russian assets – mostly stranded in Europe – to back $50 billion in aid to Ukraine, according to people familiar with the discussions. Germany’s assent could be a crucial step that brings Washington and its allies closer to securing a substantial new aid package for Kyiv and ensuring US engagement regardless of the outcome of the November election.
/jlne.ws/4dRKTTm

Israel/Palestine Conflict

Prosecuting Netanyahu Has Risks for International Criminal Court; U.S. support for ICC, which grew with Ukraine investigation, is collapsing after prosecutor targets Israeli leaders
Jess Bravin – The Wall Street Journal
For more than 25 years, the U.S. relationship with the International Criminal Court has veered between idealistic support to outright hostility, with an arm’s length distance being the norm. Now, with ICC prosecutor Karim Khan announcing he will seek charges against Israeli Prime Minister Benjamin Netanyahu for the Gaza war a year after obtaining an arrest warrant for Russian President Vladimir Putin over Ukraine allegations, the ICC has asserted the independence its framers imagined-at the likely cost of practical support and diplomatic legitimacy that only superpower backing can bring.
/jlne.ws/3wUCyh0

A crushing blow for Israel and a massive gamble by the ICC; The question of how the US responds to this now becomes critical
Gideon Rachman – Financial Times
The decision by the chief prosecutor of the International Criminal Court to apply for arrest warrants against Benjamin Netanyahu and Yoav Gallant is a huge setback for Israel. The fact that the ICC is also applying for warrants against the leaders of Hamas, in addition to the Israeli prime minister and defence minister, will not cushion the blow. On the contrary, outrage in Jerusalem will be further stoked by the implication that Israel is on the same moral level as a terrorist organisation.
/jlne.ws/4bP56r1

Exchanges, OTC and Clearing

CME Group Expands Fixed Income Offerings with Launch of Corporate Bonds and Mortgage-Backed Securities on BrokerTec Quote
CME Group
CME Group, the world’s leading derivatives marketplace, today announced that it will continue its expansion into the fixed income markets by launching repo on corporate bonds and mortgage-backed securities (MBS) on BrokerTec Quote, its dealer-to-client (D2C) request-for-quote (RFQ) trading platform. U.S. corporate bonds began trading on May 20, 2024, with the remaining products live by the end of June. Additionally, CME Group’s U.S. credit futures will begin trading on June 17, 2024.
/jlne.ws/3UKoTBc

Nodal Exchange named Commodity Exchange of the Year by Energy Risk
EEX Group
Nodal Exchange has been named Commodity Exchange of the Year for the second year in a row by Energy Risk magazine. The Energy Risk Awards recognize excellence in financial risk management across the global commodities markets. Energy Risk presented the Commodity Exchange of the Year award at a ceremony in Houston yesterday.
/jlne.ws/4dLPcQf

SIX Digital Exchange hits Milestone with over 1 Billion Swiss Francs in Digital Assets on their platform
SIX
SIX Digital Exchange (SDX) announces that digital asset issuances facilitated on its platform will surpass 1 billion Swiss Francs (CHF) with the settlement of the CHF 200mn bond by the World Bank priced on 15 May. This achievement marks a groundbreaking advancement in the realm of institutional adoption of digital assets, as SDX continues to lead the way in providing innovative solutions in partnership with customers and regulators.
/jlne.ws/3QTttvH

Intercontinental Exchange Announces Results from 2024 Annual Meeting of Stockholders
Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of technology and data, today announced the results of the Company’s 2024 Annual Meeting of Stockholders, which was held Friday, May 17. A replay of the meeting is available at www.ir.theice.com. Each of the ten director nominees received a majority of the votes cast “for” their election. Each director was elected to a one-year term. Stockholders approved an advisory resolution on executive compensation, with a majority of the votes cast “for” the proposal. Ernst & Young LLP was ratified as the Company’s independent registered public accounting firm for 2024, with a majority of the votes cast “for” the ratification of Ernst & Young LLP.
/jlne.ws/44NdVQ5

ICE Futures U.S. 2024 Independence Day Trading Schedule
ICE Futures U.S.
ICE Futures U.S. will observe the trading schedule below for the 2024 Independence Day holiday. Changes from regular trading hours and daily settlement window times are shown in bold, all times shown in NY time.
/jlne.ws/4aoZdzL

JSE Launches ‘Verify a Broker’ Tool
Johannesburg Stock Exchange
With scams on the rise, the JSE has launched a new user-friendly, free tool that empowers people looking to invest their money to check whether the financial professionals they deal with are credible, before making any investment decisions. Many scammers target people who are looking to invest and grow their money. These fraudsters often promise big profits with little or no risk, misleading people into putting their money into schemes that sound too good to be true. Recognising this risk, the Johannesburg Stock Exchange (JSE) has introduced ‘Verify a Broker’, an online tool designed to help people confirm if the stockbrokers and financial service providers they deal with are real and credible. This tool supports anyone who wants to make safer investment choices by ensuring they deal only with legitimate professionals and companies.
/jlne.ws/4btNQrK

Notice of the 23rd Annual General Shareholders Meeting.
JPX
/jlne.ws/3QT8yJm

SPAN Margin Parameters
London Metal Exchange
LME Clear Members are advised that new SPAN1 margin parameters have been set, as marked in the SPAN Margin Parameter spreadsheet located here https://www.lme.com/en/Clearing/Risk-management/Margin-parameter-files. The changes will be made effective at close of business 21 May 2024 and will be reflected in SPS margin calls on the morning of 22 May 2024. Members are advised that Secondary SPAN margin parameters will be updated from the morning of 21 May 2024 with the new parameters as detailed in this circular.
/jlne.ws/3vimcfa

The Moscow Exchange begins trading futures on shares of four Russian companies
MOEX
On May 28, 2024, trading in deliverable futures for shares of four Russian companies will begin on the Moscow Exchange derivatives market. The underlying assets of the new futures contracts will be ordinary shares of RussNeft (RNFT), Europlan (LEAS), Far Eastern Shipping Company (FESH) and preferred shares of Tatneft (TATNP). New futures contracts for shares of Russian companies will expand the possibilities of creating trading strategies for trading participants and their clients – private and institutional investors, including through arbitrage operations, as well as hedging operations of securities portfolios.
/jlne.ws/3yrtuAJ

Fintech

The Battle Over Project Management Software Is Getting Personal; CIOs are struggling to consolidate project management software in a fragmented landscape where employees have strong preferences
Isabelle Bousquette – The Wall Street Journal
IT executives tasked with whittling down an ever-expanding, often duplicative menu of software used in-house are facing static from employees who just can’t quit their favorite project management tools. Used to set goals and timelines and track progress on everything from developing software applications to running marketing campaigns, project management tools may lack the cachet of a new AI chatbot. But what they lack in buzz, they more than make up for in customer loyalty.
/jlne.ws/44Q0r5X

Nvidia CEO Says Dell Partnership Is Key in Its Push to Expand AI
Ed Ludlow and Ian King – Bloomberg
Nvidia Corp. Chief Executive Officer Jensen Huang said its partnership with Dell Technologies Inc. will spread artificial intelligence to a wider range of customers, helping businesses and organizations create their own “AI factories.” “We want to bring this generative AI capability to every company in the world,” he said in a Bloomberg Television interview in Las Vegas, where Dell is holding a conference. “It’s not about just delivering a box – it’s about delivering an entire infrastructure. It’s an infrastructure that’s insanely complicated.”
/jlne.ws/4dPHi8n

Amazon halts orders of Nvidia ‘superchip’ to await updated model; Delay from the world’s biggest cloud computing provider gives investors jitters over potential ‘air pocket’ in demand for AI chips
Camilla Hodgson and Tim Bradshaw and Michael Acton – Financial Times
Amazon’s cloud computing arm has halted orders of Nvidia’s most advanced “superchip” to wait for a more powerful new model, as investors fret about a dip in demand between the $2.3tn chipmaker’s product cycles. The Silicon Valley-based chipmaker unveiled a new generation of processors dubbed Blackwell in March, barely a year after its predecessor Hopper began to be shipped to customers. Nvidia’s chief executive Jensen Huang said the new products would be twice as powerful for training large language models, the technology behind OpenAI’s ChatGPT.
/jlne.ws/4axfId4

AI data labelling start-up Scale valuation doubles to $14bn; Alexandr Wang’s company brings in $1bn in latest fundraising round as investors bet that data is the new oil
George Hammond and Stephen Morris – Financial Times
Scale AI has raised $1bn in a new funding round, doubling the data-labelling start-up’s valuation to about $14bn and paving the way for an initial public offering. The deal underscores the critical nature of data in the race to build super-powerful artificial intelligence systems and the premium investors are willing to put on a commodity many regard as the new oil.
/jlne.ws/3WR5Ac6

Leading tech companies sign AI safety pledges; mArtificial intelligence developers agree to assess when risks become ‘intolerable’ ahead of summit in Seoul
Christian Davies – Financial Times
Leading artificial intelligence companies have signed up to a new round of voluntary commitments on AI safety, the UK and South Korean governments have announced. The companies, which include tech giants Amazon, Google, Meta and Microsoft as well as Sam Altman-led OpenAI, Elon Musk’s xAI and Chinese developer Zhipu AI, will publish frameworks outlining how they will measure the risks of their “frontier” AI models.
/jlne.ws/4aotBKI

CloudMargin Grows by 35% in Q1 2024
Rick Steves – Finance Feeds
“We have the strongest pipeline in our history, and while we continue to see demand from the buy-side, regional banks are now especially keen to ensure their collateral and margin management program is robust and state-of-the-art.” CloudMargin has achieved 35% revenue growth for the fiscal year ended March 31, 2024, according to the collateral management technology company which has seen a rise in the value of new annual contracts signed, along with increased business from existing clients.
/jlne.ws/3QPYmkT

Holistic AI Is Now H, a New French Startup With $220 Million Out of the Gate; Billionaires and VCs join round in company promising AGI; DeepMind alums will partner with UiPath, other investors
Mark Bergen – Bloomberg
A French artificial intelligence startup, simply called H, has raised $220 million in initial financing from a slew of billionaires and venture capitalists on the promise of building the next generation of powerful AI tools. For months, a group of French scientists who worked at Google DeepMind have been quietly pitching investors on their project, which they had called Holistic AI. The startup announced its new name on Tuesday and said it would produce models capable of reasoning, planning and performing complex tasks.
/jlne.ws/3WPkn6X

Cybersecurity

SEC cybersecurity and climate rules: Where are they now?
Roger E. Barton – Reuters
Back when the Securities and Exchange Commission (SEC) released its 2022 and 2023 Examination Priorities Reports, the Commission indicated that under the banner of “Information Security and Operational Resiliency” it would be focusing on issues related to cybersecurity and climate risk in the coming years. As part of this focus, the SEC subsequently proposed and finalized two major (and controversial) new sets of regulations over the next two years. These rules require reporting companies to disclose detailed information about material cybersecurity incidents (“Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure” – SEC.gov) and about climate-related risks and greenhouse gas emissions (“The Enhancement and Standardization of Climate Related Disclosures for Investors” – SEC.gov).
/jlne.ws/3UODCLq

Deepfakes Rank as the Second Most Common Cybersecurity Incident for US Businesses
DarkReading
Deepfakes are now the second most common cybersecurity incident encountered by businesses in the past year, trailing only behind malware infections, according to research by ISMS.online, the auditor approved compliance platform. Astonishingly over a third of businesses across the US have experienced a deepfake security incident in the last 12 months.
/jlne.ws/3QTvV5n

Cybersecurity defence essentials: Must-know strategies for businesses
Tanmoy Mitra – ET Insights
The ever-evolving cybersecurity landscape presents organisations with an array of increasingly intricate risks. George Symons, VP of Cloud, Infrastructure, and Security Strategy at Persistent Systems, talks about the biggest and most growing cyber dangers that firms confront now. Symons highlights the transition from traditional threats, such as phishing and malware, to advanced intrusions driven by deepfakes, machine learning, and artificial intelligence. Businesses, according to Symons, need to put in place robust cybersecurity plans that incorporate resilience, AI-powered threat detection, and continuous surveillance to counteract these advanced threats.
/jlne.ws/3WPeh6Q

Cryptocurrencies

Ether jumps 16% on US ETF approval speculation; Cryptocurrency’s rise catches analysts by surprise after reports SEC asks issuers to refile applications
Philip Stafford – Financial Times
The price of ether has jumped more than 16 per cent on speculation that US regulators will give the green light to stock market funds that invest in the world’s second-biggest cryptocurrency. The sharp rise, which began last night, caught many traders by surprise as most had expected the Securities and Exchange Commission to delay or reject the first ether exchange-traded fund by a Thursday deadline. Bitcoin also rose 6 per cent overnight to just over $71,000.
/jlne.ws/4dLv3K3

Self-proclaimed bitcoin inventor lied ‘repeatedly’ to support claim, says UK judge
Reuters
An Australian computer scientist who claimed he invented bitcoin lied “extensively and repeatedly” and forged documents “on a grand scale” to support his false claim, a judge at London’s High Court ruled on Monday. Craig Wright had long claimed to have been the author of a 2008 white paper, the foundational text of bitcoin, published under the pseudonym “Satoshi Nakamoto”.
/jlne.ws/3URK7NF

Edited highlights from the evisceration of Craig Wright; Putting the tosh in Satoshi
Bryce Elder – Financial Times
A UK court ruled in March, after a month-long trial, that Wright was not Satoshi Nakamoto, the pseudonymous inventor of bitcoin. The Crypto Open Patent Alliance, an industry group, had brought the case in an effort to halt his legal actions against bitcoin developers.
/jlne.ws/44P28k2

Politics

US says Iran sought help over president crash
Shaun Tandon – AFP
The United States said Monday that arch-enemy Iran sought assistance over a helicopter crash that killed president Ebrahim Raisi, as Washington meanwhile offered condolences despite saying he had “blood on his hands.” The State Department said Iran, which has had no diplomatic relations with Washington since the aftermath of the 1979 Islamic revolution, reached out afer Raisi’s aging chopper crashed in foggy weather Sunday.
/jlne.ws/4bN6mew

New York lawmakers push to block funds’ sovereign bond litigation; Bill seeks to stop ‘vulture fund’ investors from winning high payouts through the state’s courts
Kate Duguid and Joseph Cotterill – Financial Times
New York lawmakers are launching a fresh push to limit “vulture fund” litigation against governments defaulting on their debts, and cut how much investors can recover through the courts on defaulted emerging-market bonds. A bill introduced in Albany on Monday would seek to block certain investors from buying up cheap defaulted sovereign bonds and then winning high payouts through courts.
/jlne.ws/4aA6DQJ

Biden and Big Oil Had a Truce. Now, It’s Collapsing; Companies were enjoying record profits. But the president’s decision to pause permits for gas export terminals has whipped up industry support, and donations, for Donald Trump.
Lisa Friedman and Rebecca Elliott – The New York Times
Early in his term, President Biden seemed to have struck an uneasy truce with the oil and gas industry. Mr. Biden had imposed restrictions on drilling as part of his ambitious climate agenda, but he also approved an enormous $8 billion oil project in Alaska. The United States had become the world’s leading exporter of natural gas, and no other country in history was pumping more crude. The industry was enjoying record profits.
/jlne.ws/3UIpvHm

Trump Media Reports Lackluster Revenues and Large Losses; The former president’s social media company reported taking in $770,000 in advertising revenue in the first quarter, sharply down from the year-earlier period.
Matthew Goldstein – The New York Times
On Monday, former President Donald J. Trump’s social media company reported taking in $770,000 in advertising revenue in the first three months of the year, largely from its Truth Social platform, as it continued to incur hefty losses. The company, Trump Media & Technology Group, completed a long-awaited merger in March with Digital World Acquisition Corporation, a cash-rich shell company that served as a vehicle for taking Trump Media public. After the merger, Trump Media said it had about $274 million in cash and cash equivalents on its balance sheet, which would enable the company to “fund operations for the foreseeable future.”
/jlne.ws/3V9xL4U

Opinion: We Germans are making Trump ‘thunderstorm’ plans
Anna Sauerbrey – CNN
It’s 9.00 a.m. on a Sunday morning in early Spring, and we are waiting for the kids to come out onto the soccer field. Some of us are holding coffee cups. We have all gotten up early to take our fourth and fifth graders to this south-eastern district of Berlin, where they will be playing the Kopenicker FC in just a bit.
/jlne.ws/4dS5jLZ

India Makes Rare Request for Refiners to Join on Russia Oil Deal
Rakesh Sharma and Sudhi Ranjan Sen – Bloomberg
India has made a rare request to its state-run oil refiners and private processor Reliance Industries Ltd. to jointly negotiate a long-term supply deal with Russia, according to people familiar with the matter. The government wants its refiners to lock in at least a third of their contracted supply from Russia at a fixed discount to help shield the nation’s economy from volatile prices, the people said, asking not to be named due to the sensitivity of talks. The appeal to join forces was informal, they added.
/jlne.ws/3K8Xx2M

China’s $8.5 billion in steel spurs Latin America toward tariffs
James Attwood – Bloomberg
One after another, Latin American nations are following in the footsteps of the US and Europe by imposing prohibitive tariffs on Chinese imports – a strain in what’s been an otherwise cozy relationship. Mexico, Chile and Brazil have hiked – and in some cases more than doubled – duties on steel products from China over the past several weeks. Colombia may be about to follow suit.
/jlne.ws/3QQyCEU

ASML and TSMC Can Disable Chip Machines If China Invades Taiwan; Firms can remotely shut off advanced EUV chip-making machines; US officials concerned over risk of conflict to chip industry
Diederik Baazil, Cagan Koc, and Jordan Robertson – Bloomberg
ASML Holding NV and Taiwan Semiconductor Manufacturing Co. have ways to disable the world’s most sophisticated chipmaking machines in the event that China invades Taiwan, according to people familiar with the matter. Officials from the US government have privately expressed concerns to both their Dutch and Taiwanese counterparts about what happens if Chinese aggression escalates into an attack on the island responsible for producing the vast majority of the world’s advanced semiconductors, two of the people said, speaking on condition of anonymity.
/jlne.ws/3wTZ0H7

Regulation

Tom Hayes to ask Supreme Court to consider Libor rigging appeal; Judges refuse to refer case to UK’s highest court but leave former trader with chance to clear his name
Alistair Gray – Financial Times
Tom Hayes, the trader who went to prison for Libor interest rate rigging, has been left with a potential chance to clear his name, even as the Court of Appeal refused on Tuesday to send his case to the UK’s highest court. Judges at the Court of Appeal in London refused to give Hayes – the first person in the world to be found guilty by a jury for conspiring to rig the London Interbank Offered Rate – permission to appeal to the Supreme Court.
/jlne.ws/4dIlQlP

Singapore’s MAS Steps Up Green Finance Partnership With China’s Central Bank; The initiatives discussed included the facilitation of green finance flows between the two countries
Kimberley Kao and Fabiana Negrin Ochoa – The Wall Street Journal
Singapore’s central bank is stepping up a green finance collaboration with its counterpart in China, it said Tuesday, as it separately announced plans to sell up to US$1.9 billion of sovereign bonds to fund environmental projects. The Monetary Authority of Singapore said the initiatives discussed at the latest meeting with the People’s Bank of China on Tuesday included the facilitation of green finance flows between the two countries, and development of a decarbonization ratings platform.
/jlne.ws/4bNeCLy

Brazil central bank plans year-end proposal for crypto regulation
Reuters
Brazil’s central bank announced on Monday that it has decided to divide the process of regulating crypto-assets and virtual asset service providers into phases, with regulatory proposals expected by the end of this year. The decision effectively delays the completion of the process following a 2022 law on the subject, which paved the way for subsequent regulation by the central bank.
/jlne.ws/3V7whbj

Effective date for NFA rule modifying Member Questionnaire requirements and new prominent inactive status banner in NFA’s BASIC system
NFA
As part of NFA’s membership application process and at least annually, all NFA Members are currently required to complete NFA’s Member Questionnaire1. Responses to the Questionnaire provide NFA with material information regarding Members’ operations and are critical data sources for our oversight responsibilities. NFA recently adopted NFA Compliance Rule 2-52 and a related Interpretive Notice 9082 and amended Bylaw 301 modifying the Questionnaire’s requirements. The Rule, Interpretive Notice and Bylaw amendments will be effective on October 15, 2024.
/jlne.ws/3wLjbqO

SEC Issues Exemptive Order Providing Additional Time for Certain Registrants to File Quarterly Reports in Light of BF Borgers Permanent Suspension
SEC
The Securities and Exchange Commission today provided exemptive relief to certain registrants affected by the permanent suspension of BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “BF Borgers”), from appearing and practicing before the Commission as an accountant. It is expected that registrants that previously retained BF Borgers will need to engage a new, qualified, independent, PCAOB-registered public accountant to audit or review the financial information included in their Commission filings.
/jlne.ws/4bJkFkc

Pedram Abraham Mehrian, Strategic Legacy Investment Group, Inc., and SLIG High-Interest Liquid Savings Company; SEC Obtains Final Judgments Against Strategic Legacy Investment Group, Inc. and SLIG High-Interest Liquid Savings Company in Connection with a Ponzi-Like Scheme
SEC
Securities and Exchange Commission v. Pedram Abraham Mehrian, Strategic Legacy Investment Group, Inc., and SLIG High-Interest Liquid Savings Company, No. 2:23-cv-08009 (C.D. Cal. filed Sept. 25, 2023)
On April 18, 2024, the Securities and Exchange Commission obtained final judgments against Strategic Legacy Investment Group, Inc. (“SLIG”) and SLIG High-Interest Liquid Savings Company (“SLIG High”), two entities the SEC charged with an alleged Ponzi-like scheme and misleading investors who had purchased more than $17.5 million in promissory notes.
/jlne.ws/3WSqSpI

LPI Australia restates 2022 accounts following concerns raised by ASIC
ASIC
LPI (Australia) Holdings Pty Limited (LPI Australia) has lodged its financial report for the year ended 31 December 2023 with restated FY22 comparative figures. This follows a review by ASIC as part of its proactive surveillance program to improve financial reporting quality. LPI Australia is a large proprietary company, which is required to prepare and lodge an audited financial report with ASIC.
/jlne.ws/3KbmfzB

ASIC cancels Everest Asset Management’s AFS licence
ASIC
ASIC has cancelled the Australian financial services (AFS) licence of Everest Asset Management Pty Ltd (Everest). Everest’s licence was cancelled because Everest failed to prepare and lodge the required financial statements and auditor opinions with ASIC. ASIC also found that Everest is likely to contravene its obligations as an AFS licensee in the future.
/jlne.ws/3QWoOtc

Select Committee on Adopting Artificial Intelligence, 21 May 2024; Opening Statement by ASIC Chair Joe Longo at the inquiry into the opportunities and impacts for Australia arising out of the uptake of AI technologies in Australia.
ASIC
I am pleased to appear before the Committee today and to provide this short opening statement. My name is Joseph Longo and I am the Chair of ASIC. I am joined by Executive Director of Markets, Calissa Aldridge and our Digital and Legal Transformation Lead, Graham Jefferson. ASIC is supportive of the safe and responsible use of AI by Australian businesses.
/jlne.ws/3UXRCmm

MiFIR review: ESMA consults on three new technical standards
ESMA
The European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, is launching today a public consultation on non-equity trade transparency, reasonable commercial basis (RCB) and reference data under the Markets in Financial Instruments Regulation (MiFIR) review. ESMA’s proposals aim at enhancing the information available to stakeholders by improving, simplifying and further harmonising transparency in capital markets.
/jlne.ws/4dI7UIB

Castle and Crystal Credit Union enters administration
UK FCA
Castle and Crystal Credit Union Limited was placed into administration on 21 May 2024 and has now stopped trading. James Sleight and Peter Hart of PKF Littlejohn Advisory have been appointed as Joint Administrators. Castle and Crystal Credit Union is a financial co-operative owned by its members. It is regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) under Firm Reference Number (FRN) 213711 as a deposit-taker.
/jlne.ws/3QRGw0E

Renewal of Bilateral Swap Arrangement between Japan and Singapore
Monetary Authority of Singapore
The Bank of Japan, acting as agent for the Minister of Finance of Japan, and the Monetary Authority of Singapore renewed the existing Bilateral Swap Arrangement (BSA) between the two countries.The BSA enables the authorities in Japan and Singapore to swap their local currencies in exchange for the US dollar from each other, and for Singapore to swap Singapore dollars in exchange for Japanese yen, in times of need.
/jlne.ws/3KaSj6x

Monetary Authority of Singapore and People’s Bank of China Advance Collaboration in Green and Transition Finance
Monetary Authority of Singapore
The Monetary Authority of Singapore (MAS) and the People’s Bank of China (PBC) discussed initiatives to advance cooperation in green and transition finance between China and Singapore at the 2nd China-Singapore Green Finance Taskforce (GFTF) meeting held on 20 May 2024. The initiatives discussed covered the alignment of taxonomies, facilitation of green finance flows, and the development of a decarbonisation rating platform.
/jlne.ws/3QW0k33

Investing and Trading

Column: In a major rebuke to Exxon Mobil, CalPERS will vote against its entire board
Michael Hiltzik – Los Angeles Times
Exxon Mobil can’t say it wasn’t warned. Having opted to continue its lawsuit against two activist investor groups even after they withdrew a shareholder proposal the company management opposed, the giant oil company had gotten flayed by shareholder advocates for its bullying. Now the big shoe has dropped: CalPERS, the largest public pension fund in the nation, announced Monday that it will vote against all 12 Exxon Mobil board members, including CEO Darren Woods, at the May 29 annual meeting.
/jlne.ws/4dLJPAz

Tesla Shareholder Group Slams Elon Musk’s $56 Billion Pay Package
Dana Hull – Bloomberg
A coalition of Tesla Inc. shareholders is urging its peers to reject the $56 billion pay package for Chief Executive Officer Elon Musk that the company’s board has asked investors to approve again. Amalgamated Bank, SOC Investment Group and six other signatories that hold a small portion of Tesla stock said Musk is distracted by his commitments to the five other companies he controls and isn’t serving the carmaker’s best interests. The group also urged shareholders to vote against the reelection of directors Kimbal Musk – Elon Musk’s brother – and James Murdoch.
/jlne.ws/4ayXHLw

‘Dumb Money’ Loses $13.1 Billion In Latest GameStop Stock Mania
Matt Krantz – Investor’s Business Daily
It appears GameStop meme investors got suckered – again. Investors who jumped into the latest online frenzy over shares of the struggling video game retailer lost $13.1 billion in just three days from the mania’s high, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. It’s been a costly lesson for investors, some of which may have lost billions the last time on GameStop and other highly shorted stocks touted on social media.
/jlne.ws/3K7xTLM

The Unlikely Stocks That Became a Hot Bet on AI; The staid utilities industry has become a top-performing sector
David Uberti – The Wall Street Journal
An unlikely stock-market winner this spring stands out even in a year full of Wall Street surprises. Utilities-yes, utilities-are outpacing the competition. The climb in shares of power companies is in part a rebound from a bleak 2023. But their move upward also reflects the growing belief that the U.S. economy can power through higher interest rates and turn the hype around artificial intelligence into reality.
/jlne.ws/4bMvZvT

Robinhood Lowers Margin Investing Rates
Hannah Miao – The Wall Street Journal
Robinhood on Tuesday unveiled new interest rates for margin investing, seeking to offer the cheapest funding on the market for individual investors. The new rates range from 5.7% to 6.75%, with lower borrowing costs for higher margin balances. In margin investing, an investor borrows from a broker to buy securities, using their holdings as collateral. Buying on margin can amplify gains, but it can also increase losses and an investor may lose more than their initial investment. It is considered highly risky and customers have to get approved by a brokerage to trade on margin.
/jlne.ws/3V9MD32

Environmental, Social and Corporate Governance

Paris climate accord is not enough to protect oceans, court says
Reuters
An international court said on Tuesday greenhouse gas emissions absorbed by the ocean were considered marine pollution, and nations are obliged to protect marine environments by going further than the requirements of the Paris climate agreement. The International Tribunal for the Law of the Sea (ITLOS) in Hamburg, Germany, gave its advisory opinion on whether countries have a responsibility to reduce emissions and fight climate change – a judgement that could give legal leverage to future climate cases.
/jlne.ws/4bscQPZ

The Midwest Could Be in for Another Smoke-Filled Summer. Here’s How States Are Preparing; Fires fueled by drought are sending smoke south from Canada into the U.S., leaving folks exposed to dangerous particulate matter in the air.
Kristoffer Tigue – Inside Climate News
Nick Witcraft knew he’d have a busy morning when his phone notified him that Canadian wildfire smoke was drifting across the U.S.-Canadian border eight days ago. Witcraft, a meteorologist for the Minnesota Pollution Control Agency (MPCA), is among a team of state forecasters who issue air quality alerts whenever a wildfire or any other major polluting event poses a potential health risk to the public.
/jlne.ws/3yqUCzU

Calpers to vote against Exxon board and CEO over ‘reckless’ lawsuit; Oil major is persisting with legal action against activists even after their emissions cutting resolution was dropped
Josephine Cumbo and Myles McCormick – Financial Times
Calpers, the largest public pension plan in the US, has decided to vote against the re-election of the ExxonMobil board of directors and chief executive in a protest against the oil major’s “reckless” legal action to “silence” shareholder voices. The announcement by the $463bn fund comes amid growing investor criticism of Exxon’s decision to sue two climate-focused investor groups to block a resolution they introduced demanding it do more to cut its greenhouse gas emissions.
/jlne.ws/4bqPXfR

European utilities cut renewable targets as high costs and low power prices bite; Trend of scaling back and reviewing plans highlights difficult economics of transitioning away from fossil fuels
Rachel Millard and Mari Novik – Financial Times
A number of major European power companies have scaled back or are reviewing their targets to develop renewable energy because of high costs and low electricity prices, in a sign of the difficulties of transitioning away from fossil fuels. Statkraft, Europe’s largest renewable energy producer, said this month that it was reviewing its annual targets for new renewables capacity, while Portuguese energy company EDP is cutting back its plans, citing high interest rates and lower power prices.
/jlne.ws/4dMU8Eu

Shell Investors Back Weaker Emissions Targets at Annual Meeting
Laura Hurst – Bloomberg
Shell Plc shareholders approved the company’s new energy transition plan with weaker carbon-emissions targets, while rejecting a resolution asking the oil and gas giant to align itself with the goals of the Paris Climate Agreement. Shell’s updated energy transition strategy got the backing of 78% of shareholders at the company’s annual general meeting in London on Tuesday. Only 19% voted for the climate resolution, filed by activist shareholder Follow This and 27 investors – including Amundi SA, Europe’s largest asset manager – that jointly manage funds worth more than $4 trillion.
/jlne.ws/3wQg6FO

Lithium Miners Shake Up Trading to Tackle Wild Price Swings
Annie Lee and Yvonne Yue Li – Bloomberg
The world’s lithium miners – facing an unprecedented demand surge and wild price swings – are shaking up the way the commodity is bought and sold. As lithium emerges as a linchpin of the global energy transition, the industry is in the grip of a slow-motion revolution that earlier upended commodities like iron ore: a push for more transparent and industry-wide pricing.
/jlne.ws/4bNmL2o

Corn, millet and … rooftop solar? Farm family’s newest crop shows China’s solar ascendancy
Huizhong Wu and Han Guan NG – Associated Press
/jlne.ws/3yvroQw

California court to weigh fate of law treating app-based drivers as contractors
Daniel Wiessner – Reuters
/jlne.ws/4dQvJO6

PR stunt’: how US utilities use housing non-profit partnerships to promote gas; Revealed: Four gas utilities have teamed up with Habitat for Humanity to build ‘zero-net energy homes’, investigation shows
Dharna Noor – The Guardian
/jlne.ws/4dKRSxn

The UCLA Scientist Helping to Create the Next Big Climate Startups; Gaurav Sant is focused on spinning out companies to tackle the hardest decarbonization challenges.
Michelle Ma – Bloomberg
/jlne.ws/4auf3Jm

Institutions

JPMorgan’s Consumer Business Is Doing Great. Its Customers Are Just OK; Nation’s largest lender sees borrowers trading down but still spending
Telis Demos – The Wall Street Journal
The country’s biggest bank says its consumer customers are healthy and stable. But doing well from a bank’s point of view might not be the same as how a customer sees it. In its investor day presentation on Monday, JPMorgan Chase gave many impressive metrics for its consumer and community banking business. For example, it bolstered expectations for net charge-offs-or the rate of loans going bad-for cards to roughly 3.4% this year, from a prior guide of under 3.5%. It has recently added millions of new customers and hundreds of branches, and said it expected steady net interest income and rising noninterest income this year in this unit. “Consumer financial health has largely normalized and remains stable,” the bank wrote in its presentation.
/jlne.ws/4bOXwN5

Bobby Jain’s New Hedge Fund Plans Major Push Into Commodities
Archie Hunter and Hema Parmar – Bloomberg
Bobby Jain’s new hedge fund is tapping talent from commodity trading houses and committing a chunk of the money it’s raising for a major push into raw materials – including in the physical market. Jain Global will allocate to commodities 15% to 20% of the roughly $5 billion it’s aiming to raise, according to a person familiar with the matter, who asked not to be identified because the details are private. The fund – due to launch in July – will trade commodities derivatives before moving into physical transactions.
/jlne.ws/3UNkei2

Finfluencers loom large in world of ETFs; Asset managers are keen to increase brand awareness but recent enforcement action highlights difficulties
Daniel Gil – Financial Times
In recent years a growing number of asset managers have sought influencers’ help to boost brand awareness and promote their funds. Fund managers have struck agreements with influencers who have built a significant following and who endorse the companies or products on their platforms.
/jlne.ws/3ypUnoS

Work & Management

JPMorgan Says Every New Hire Will Get Training for AI
Hannah Levitt – Bloomberg
JPMorgan Chase & Co. is immersing new employees in artificial-intelligence training, preparing them for a technology Chief Executive Officer Jamie Dimon has likened to the impact of the printing press and steam engine. “This year, everyone coming in here will have prompt engineering training to get them ready for the AI of the future,” Mary Erdoes, who runs the asset- and wealth-management unit, said of her unit’s efforts at the firm’s investor day Monday.
/jlne.ws/4bnJdPS

Companies reap bigger dividends from happier staff; Higher levels of employee wellbeing are linked to better returns and higher valuations
Chris Newlands – Financial Times
Just 18 months ago, the Californian chipmaker Nvidia – which started life in 1993 as a specialist provider of 3D graphics for computer games – operated in relative obscurity. However, a surge of interest in artificial intelligence has changed all that. As investors fell over themselves to find the companies they thought would make the most money from generative AI, Nvidia’s share price took off.
/jlne.ws/3V8qqCo

Wellness Exchange

Beauty & Wellness Briefing: The trends investors are interested in for H2 2024
Lexy Lebsackmay – Glossy
This week, I checked in with beauty and wellness investors to learn what trends and categories are piquing their interest for the second half of 2024. This includes science-powered hair- and skin-care made for all genders, as well as technology that serves women going through menopause. Additionally, the evocative new beauty campaign from E.l.f., Glossier’s new brick-and-mortar store and can’t-miss headlines.
/jlne.ws/3WQhFy9

Financial Wellness Gap Between Men, Women Continues to Widen
Remy Samuels – PlanSponsor
While overall employee financial wellness showed improvement this year, the wellness and retirement confidence gap between men and women remains an issue, according to Bank of America.
/jlne.ws/3K6Ze0N

Q1 Earnings Show Lending Platforms’ Digital Path to Financial Wellness
PYMNTS
Over the last several months, PYMNTS Intelligence data has revealed in separate reports that tens of millions of consumers would opt for a single point of access to manage banking and spending – through an everyday app. They’re using a number of digital conduits to gain a holistic view of spending and saving, budgeting their daily cash and credit outlays, including digital wallets. As PYMNTS reported earlier this year, digital wallet users spend 31% more across a range of everyday purchases than those who do not use digital wallets.
/jlne.ws/3yBq4LI

Regions

China Is Winning the Minerals War; Western efforts to make a dent are languishing; ‘China is not just standing still waiting for us to catch up’
Jon Emont – The Wall Street Journal
For the past few years, the West has been trying to break China’s grip on minerals that are critical for defense and green technologies. Despite their efforts, Chinese companies are becoming more dominant, not less. They are expanding operations, supercharging supply and causing prices to drop. Their challengers can’t compete.
/jlne.ws/4dS9OGn

Sri Lanka inflation rises to 2.7% in April from 2.5% in March
Reuters
Sri Lanka’s consumer price inflation rose to 2.7% in April from 2.5% in March, official data showed on Tuesday. The National Consumer Price Index (NCPI) captures broad retail price inflation and is released with a lag of 21 days every month.
/jlne.ws/3yuKWo9

New Thai finance minister has chance to improve strained c.bank ties, says ex-FinMin
Anisha Sircar and Divya Chowdhury – Reuters
Thailand’s new finance minister has refrained from pressuring the central bank and has a chance to improve relations amid a longstanding disagreement on interest rates, former finance minister Thirachai Phuvanatnaranubala said on Tuesday. Speaking in the Reuters Global Markets Forum, Thirachai said Prime Minister Srettha Thavisin’s repeated public push for a rate cut had created unnecessary strain and new Finance Minister Pichai Chunhavajira was in a position to smooth things over.
/jlne.ws/4bQeuel

Mastercard and Visa face crackdown by UK watchdog on merchant fees; Payment Systems Regulator cites 30% rise in charges with ‘little evidence’ the service has improved at same rate
Akila Quinio – Financial Times
Visa and Mastercard will be required to share more information about the fees that they charge merchants under new rules proposed by the UK payments regulator. The Payment Systems Regulator on Tuesday proposed that the two companies, which account for 95 per cent of all debit and credit card payments in the UK, should regularly disclose financial information to the regulator and consult merchants and retailers before changing their fees.
/jlne.ws/4awlZGa

Dubai Airports expects record passenger traffic this year, set to top 100 million by 2027
Sumathi Bala – CNBC
The CEO of Dubai Airports is bullish on the future and expects passenger traffic to surge to a record this year and top 100 million by 2027. Paul Griffiths said the airport operator has seen very strong post-pandemic recovery, adding the city’s “never been in a stronger place than it is now.”
/jlne.ws/3yw7QeL

S&P expects slower recovery for Israel’s economy despite Q1 rebound
Reuters –
Ratings agency S&P Global on Tuesday said it expects Israel’s economy to recover at a more moderate pace than previous downturns despite an economic bounce-back in the first quarter. The Israeli economy rebounded in the first quarter after growth was hit late last year at the outset of Israel’s war against Hamas in Gaza.
/jlne.ws/3ymp1iI

Think Bhutan’s $100 daily tourism fee is pricey? It could go even higher, says prime minister
Monica Pitrelli – CNBC
Bhutan may reconsider its controversial $100 daily tourism fees if the country’s tourism industry recovers soon, Bhutan’s Prime Minister Tshering Tobgay told CNBC on May 10. But the fees are likely to go higher, he said. Bhutan reopened its borders in September 2022 with an increased “Sustainable Development Fee” of $200 per person per day in place. In 2023, the country lowered the fee to entice travelers to stay longer, before halving the fee across the board.
/jlne.ws/3yE7liA

Samsung replaces semiconductor chief as it chases AI chip rivals; Electronics group trails South Korean peer SK Hynix in high-bandwidth memory chips for artificial intelligence
Song Jung-a and Christian Davies – Financial Times
Samsung Electronics has replaced its semiconductor chief in an effort to overcome what it has described as a “chip crisis”, amid growing concern that the world’s largest memory-chip maker by sales is falling behind rivals in the booming artificial intelligence segment. The South Korean company appointed Jun Young-hyun to head its core semiconductor business, replacing Kyung Kye-hyun, who will now lead Samsung’s “future business” division looking at different technologies. Jun previously led the group’s battery unit, Samsung SDI, and earlier worked in memory chip development.
/jlne.ws/3ypATk5

Britain doubles down on climate target, rules out accounting loophole
Reuters
Britain said it was doubling down on its net zero emissions target after ruling out using an accounting loophole that would have seen it use surplus emission cuts to meet future climate goals. The move comes after Britain’s independent climate advisers, the Climate Change Committee, warned in February against using the surplus saying it could weaken efforts to curb emissions. Britain sets five-yearly carbon budgets to help it progress towards net zero emissions by 2050.
/jlne.ws/3yBx8bb

Kenya’s economic growth accelerates to 5.6% in 2023
Reuters
Kenya’s economy grew by 5.6% in 2023 from a revised 4.9% in the previous year, the head of the statistics office said on Monday, buoyed by robust output in the agriculture sector. The East African nation’s economy relies on farming, which contributes more than a fifth of annual economic output, and abundant rains after years of drought helped the sector to recover from contractions in the previous two years.
/jlne.ws/3yBdLPy

TotalEnergies moves ahead on $6 billion Kaminho oil project in Angola
America Hernandez – Reuters
French oil major TotalEnergies is pressing ahead with the development of the Kaminho oil project 100 kilometers off the coast of Angola after a final investment decision on the block, it said on Tuesday. The $6 billion project involves developing two oil fields located in Block 20/11, Cameia and Golfino, according to a statement from Angola’s national hydrocarbon agency ANPG.
/jlne.ws/4dSaEmv

US Decries Kosovo Police Raid on Serbian Bank; Action ‘undermines perceptions’ of Kosovo resolving crisis; Kosovo is seeking to restrict use of Serbian currency
Gresa Kraja – Bloomberg
The US and European Union condemned a raid by Kosovo police on a local Serbian bank, saying the operation wasn’t coordinated with Western allies and stokes already simmering tensions in the region. A decision by Kosovo’s government earlier this year to restrict the use of the Serbian dinar has triggered a standoff with Serbia over the treatment of the minority group. US and European Union negotiators have also criticized Kosovo’s prime minister, Albin Kurti, for a heavy-handed approach that would affect payments to pensioners and welfare recipients.
/jlne.ws/44MRURv

Miscellaneous

Why the ‘Tock’ of a Pickleball Is So Annoying; Its relatively high pitch and sudden start-and-stop combine to grate on the human ear. Redesigning paddles could help.
Eugenia Cheng – The Wall Street Journal
As the weather improves I’m happy to be playing tennis again. However, one of the tennis courts in my local park was turned into two pickleball courts, and I’ve joined the apparently large number of people who find the sound of pickleball annoying. I want to try to be rational despite my disappointment at losing a court, so I decided to look into the math of the pickleball sound. Pickleball paddles are small and hard, and the balls are plastic with holes in them, whereas tennis rackets have vibrating strings and the balls are made of felt-coated rubber and filled with air. So where tennis makes a pleasant ringing sound, pickleball makes a sharp high-pitched “tock.” The difference is in the waveform of the sound-specifically its amplitude, frequency, and shape.
/jlne.ws/4azxUmu

OpenAI says Sky voice in ChatGPT will be paused after concerns it sounds too much like Scarlett Johansson
Ryan Morrison – Tom’s Guide
OpenAI is pausing the use of the popular Sky voice in ChatGPT over concerns it sounds too much like the “Her” actress Scarlett Johansson. The company says the voices in ChatGPT were from paid voice actors. A final five were selected from an initial pool of 400 and it’s purely a coincidence the unnamed actress behind the Sky voice has a similar tone to Johansson.
/jlne.ws/44OJUiE

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The Stock Market Has Rarely Been This Sleepy

Lead Stories The Stock Market Has Rarely Been This Sleepy Gunjan Banerji - The Wall Street Journal It's eerily calm out there in the stock market. The Cboe Volatility Index, or VIX, dropped below 12 last week, a nearly five-year low. The gauge, based on options prices...

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