Goldman Says Mom-and-Pop’s Stock Picks Are Trouncing Wall Street

Jun 15, 2020

First Read

Hits & Takes
By John Lothian & JLN Staff

The theme of today’s top stories in the lead section is the growing influence of retail traders and how the lack of sports betting has propelled millennials into trading stocks. Where would we be without Robinhood?

The FIA is looking for a director of programming. This is a Washington, DC job and does not involve coding, despite what you might think.

The new CNN-inspired JLN hoodies have arrived. We have had interest from some people who saw my post on LinkedIn and Facebook about where they can get one. If you are interested in buying a “The World Need Journalists” gray hoodie with a JLN logo on it, please let me know. We may be able to make that happen.

The idea for the hoodies came from CNN, who sent a hoodie with this message, minus the JLN logo of course, to each of their employees to celebrate the 40th anniversary of the network. I was inspired by the message and its simplicity and wanted to share it with JLN employees and others.

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


Cboe is scheduled to reopen its trading floor today. According to pics from Cboe and others on Twitter, they are posting a set of rules from the CDC and offering masks and hand sanitizer (use the latter before putting on the former) for anyone entering the building. ICYMI, last week CEO Ed Tilly wrote about the decision to reopen and the precautions they are taking, here. ~SR

Frank Partnoy, the author of Fiasco: The Inside Story of a Wall Street Trader, has a long form story in The Atlantic this month about the 2008 financial crisis, CDOs and what he says is a looming threat from CLOs (collateralized loan obligations).~SR

ISDA has launched a new ISDA Member Showcase, a comprehensive directory of ISDA members that offer products and services for the derivatives industry. You can find it here. ~SR


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The Spread: High Volumes, Highlighting Heroes

This week on The Spread, the CME announces the re-opening of its Eurodollar Options trading floor, Cboe announces the re-launch of an old product, JLN highlights an unsung hero of the OCC, and more.

Watch the video »


Catherine Clay: Cboe’s Information Solutions Using Data Tools To Build Business

After capping a series of acquisitions with the purchase of Trade Alert, Cboe’s senior vice president and head of information solutions talks about why data and analytics are now essential exchange offerings.

Listen »


‘This is a real world war’: Ecuador’s president on the virus; Andean nation is worst-hit developing country, as pandemic devastates public finances
Michael Stott and Gideon Long – FT
His country is the worst hit by the coronavirus in the developing world. Deaths came so fast in the business capital that bodies were left at home for days in tropical heat waiting for collection. Government finances are so bad that all officials have been asked to take a pay cut, the national airline and the post office have been liquidated and foreign debt is unpayable.

*****If only we spent the same amount fighting COVID-19 as we do on the military.~JJL


SGX Bull Charge Charity Run goes virtual
SGX rallying Singapore’s financial community to raise funds for 17th year; Exchange pledges a total of S$1.5 million; will match contributions up to S$1 million and donate a further S$5 per kilometre completed, up to 100,000 km
SGX Bull Charge, the flagship charity initiative of Singapore Exchange (SGX), is going virtual. For the first time, its annual Charity Run has been transformed into a two-week virtual fundraiser to prioritise the well-being of participants as they go the extra mile for a good cause.

******The bull on Wall Street would have a hard time running, as it is covered up.~JJL


Have You Seen My Gold Bars? I Think I Left Them on the Train
Hugo Miller – Bloomberg
Forgotten booty remains unclaimed eight months later; Gold bars have now been confiscated by local prosecutors
The ownership of nearly $200,000 worth of gold bars left on a Swiss commuter train last year remains a mystery, leaving an even bigger question: who commutes with a bag of gold in the first place? The bars, valued at 182,000 Swiss francs ($191,000), were found last October inside a parcel on a train bound for the lakeside city of Lucerne, according to a June 2 notice in the local gazette. While the weight wasn’t given, calculations at current prices mean the bars weighed about 3.45 kilograms (7.6 pounds), or more or less two copies of ‘War and Peace.’

*****Yes, those are mine. Send them to me.~JJL



Friday’s Top Three
Our top story by a long way Friday was the Intercontinental Exchange’s What are the differences between ICE Brent and NYMEX WTI futures? – a repeat of Thursday’s top story. Second was Seed CX to Close Exchange, Focus on Settlements in Company Shift, from Coindesk. Third was the photo taken by JLN’s Thom Thompson of the view down LaSalle Street to the Chicago Board of Trade Building at rush hour, deserted.


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Lead Stories

Goldman Says Mom-and-Pop’s Stock Picks Are Trouncing Wall Street
Joanna Ossinger – Bloomberg
Stocks preferred by retail investors are handily beating those liked by hedge funds and mutual funds, according to Goldman Sachs Group Inc. A portfolio of stocks popular among individuals has surged by 61% since the bear market trough compared with a gain of 45% for both hedge fund and mutual fund favorites and a 36% rise in the S&P 500 Index, strategists led by David Kostin wrote in a note June 12. And investors should consider value shares, they said.

Millennials working from home may be moving the market
Paul R. La Monica, CNN Business
Stocks are still significantly higher than where they were in mid-March, even after Thursday’s blood curdling drop. Many experts have been scratching their heads wondering who is investing right now. The economy and corporate profits are in free fall because of the Covid-19 outbreak. So is the market being propped up by the Federal Reserve — which is now buying ETFs — and big mutual funds, hedge funds and other institutional investors hunting for bargains?

Coronavirus threatens Chicago’s last remaining trading pits
Tom Polansek – Reuters
Chicago brokers and traders worry the novel coronavirus will kill more of the city’s once famous shout-and-gesture trading pits. CME Group, which owns the Chicago Board of Trade, said this week that most of the pits it closed in March because of the pandemic will remain shuttered indefinitely. The news disappointed some brokers who hoped to return to the trading floor this month and are looking for other ways to make money.

Trading Sportsbooks for Brokerages, Bored Bettors Wager on Stocks; When Russian table tennis or Korean baseball won’t scratch the itch, some are trying their hand at trading equities. It’s enough to move the market, analysts say.
Matt Phillips – NY Times
When he wasn’t coaching sports, he was playing them or watching them. And if he was watching — well, a little skin in the game always made it more interesting for Steven Young, a teacher outside Philadelphia. Just small-dollar bets, mixed in with shuffling the rosters of his fantasy teams.

Robinhood Market Made Bursting Bubbles Wall Street’s Obsession
Sarah Ponczek and Vildana Hajric – Bloomberg
Massive stock surges have investors making dot-com comparisons; Retail participation ‘at levels we haven’t seen in 20 years’
Tuesday afternoon, a smallish Chinese real-estate firm, ticker symbol DUO, went crazy on the Nasdaq. Out of the blue, in a vacuum of news, depositary receipts of the Shenzhen-based outfit shot up 13-fold, taking its market capitalization to $4 billion.

Robinhood users’ favorite stocks roar back after selloff
John McCrank, David Randall – Reuters
Shares of airlines, cruise lines and other companies that have been popular with investors on the Robinhood trading app shot higher on Friday, a day after stocks suffered their worst one-day market rout in about three months.

It’s like the Wild West with ‘get-rich-quick crowd’ vs. Wall Street pros, but it’s too easy to blame retail investors for ‘rampant speculation’
Mark DeCambre and Sunny Oh – MarketWatch
Tales of out-of-work 20- and 30-somethings using coronavirus stimulus checks to scoop up stocks on Wall Street with reckless abandon are coming fast and furious, but the reasons behind the recent fervor for investing is, perhaps, far simpler.

Captain of the Day Traders
Dealbook – NY Times
‘I’m the captain now’
Seasoned investors have been puzzling at the disconnect between the fragile economy and rapidly rising stock indexes. Wall Street increasingly thinks the rally is driven by retail investors, particularly bored bettors looking for action.

JPMorgan Says Bitcoin Crash Survival Shows It Has Staying Power
Vildana Hajric and Lu Wang
June 12, 2020, 11:39 AM CDT
Price action points to speculative use versus store of value; Bitcoin has gained 75% since mid-March to trade around $9,500
If Bitcoin were a student, you could think of it as maybe having entered middle school by now given its age. Maybe, also, it just took its first test — and according to JPMorgan Chase & Co., it got “mostly positive” results.

Top US pension fund aims to juice returns via $80bn leverage plan; Calpers hopes bold move will boost efforts to achieve its 7% return target
John Plender in London and Peter Smith in Wagga Wagga – FT
Calpers is to move deeper into private equity and private debt by adopting a bold leverage strategy that the $395bn Californian public sector pension fund believes will help it achieve its ambitious 7 per cent rate of return.

The World’s Best-Performing Big Lender? Deutsche Bank; German lender outperforms rivals as investors look favorably on latest revival plan
Share-price and index performance, year to date
Patricia Kowsmann – WSJ
Deutsche Bank AG has long been branded one of the most troubled global lenders. Now, a year into a turnaround plan that has notched some early successes, it is the best-performing large bank stock in the world.

Citi backs MEMX ahead of September launch; MEMX has added Citi as an investor as it gains FINRA approval for broker-dealer routing ahead of its launch in September.
Kiays Khalil – The Trade
Upcoming US equities exchange MEMX has confirmed that Citi has joined the venture as an investor as it gains further regulatory approval ahead of launch.

Banks Cut Shale Drillers’ Lifelines as Losses Mount; Lenders are pulling back on reserve-backed loans as the shale industry faces a liquidity crunch
Christopher M. Matthews and Andrew Scurria – WSJ
Banks are slashing credit lines to shale drillers, as an oil-price crash and wells that have failed to produce as much as predicted force a painful reassessment of companies’ assets.

US shale producer Extraction files for bankruptcy; After a surge in its shares last week, the once high-flying shale producer files for bankruptcy protection
Derek Brower and Myles McCormick – FT
Extraction Oil & Gas, whose share price soared threefold during a frenzy of buying last week, declared bankruptcy late on Sunday, making the large US shale producer the latest victim of the worst oil-price crash in decades.

Extraction Oil & Gas Files for Bankruptcy Amid Commodity Slump
Allison McNeely – Bloomberg
Extraction Oil & Gas Inc. filed for bankruptcy, becoming the latest producer to succumb to high debt and dwindling liquidity amid a difficult environment for energy companies. The Denver-based company filed in Delaware after skipping a May 15 interest payment on its 2024 bonds, triggering a 30-day grace period while it explored strategic options to address its roughly $1.5 billion of debt.

24 Hour Fitness Files for Bankruptcy Amid Onslaught of Gym Closures
Katherine Doherty – Bloomberg
Middle-tier operators already struggled before coronavirus; 24 Hour closed all of its gyms in mid-March to stop virus
24 Hour Fitness Worldwide Inc. sought court protection from its creditors, unable to keep up with debt payments after the prolonged shutdown caused by coronavirus outbreak.

Fund managers prepare to return to the office; Amundi, BlackRock and LGIM are opening up buildings in Europe following the pandemic
Attracta Mooney – FT
Asset managers are taking tentative steps to reopen their workplaces in London and across Europe almost three months after investment houses shut their doors in response to the coronavirus pandemic.

Private equity barons grow rich on $230bn of performance fees; New analysis estimates performance of PE funds, net of fees, matches public equity markets
Chris Flood – FT
A handful of super wealthy multibillionaires have accumulated vast riches from running private equity funds that have performed no better on average than basic US stock market tracker funds since 2006.

GAIN Capital Shareholders Vote 71% in Favour of INTL FCStone Acquisition; INTL FCStone Inc. agreed to acquire GAIN Capital in an all-cash deal valued at about $236 million.
Aziz Abdel-Qader –
INTL FCStone has just announced that GAIN Capital’s shareholders have overwhelmingly approved their $236 million combination deal.

When Silicon Valley Goes Dark This Time, There Will Be No Refuge
David R Baker and Mark Chediak – Bloomberg
In 2019, 3 million lost power; this year adds Covid-19 fears; Drought conditions suggest worse-than-normal fire season ahead
Blackouts that hit millions of Californians in 2019 could be doubly calamitous this year with tech giants Google, Twitter Inc. and Facebook Inc. among the many companies keeping offices closed until the fall or later in response to the global Covid-19 pandemic.

America’s Currency Is Losing Its Exceptionalism; Here are Bloomberg Opinion’s top stories this week.
Brooke Sample – Bloomberg
A Crash in the Dollar Is Coming — Stephen Roach
The era of the U.S. dollar’s “exorbitant privilege” as the world’s primary reserve currency is coming to an end. France’s then-finance minister Valery Giscard d’Estaing coined that phrase in the 1960s largely out of frustration, bemoaning a U.S. that drew freely on the rest of the world to support its overextended standard of living. For almost 60 years, the world complained but did nothing about it. Those days are over.

Pimco’s Seidner Says It’s Time to Give ‘The New Normal’ a Rest
Michael McDonald – Bloomberg
Post-crisis period may be ‘the old, old normal,’ he says; Seidner sees U.S. economic comeback stretching to 2022
It may be time to scrap the oft-used phrase ‘the new normal.’ So says Marc Seidner of Pacific Investment Management Co. “Pimco often gets credit for coining the phrase ‘the new normal’ coming out of the financial crisis,” Seidner, the firm’s chief investment officer for non-traditional strategies, said in a webcast Friday organized by Boston College’s Carroll School of Management. “I’m actually getting pretty sick of the phrase.”

OPEC Gets Chance to Gain Upper Hand in Long Battle With Shale
Grant Smith – Bloomberg
Industry rout slashes investment in supplies outside the group; Forecasts for decline in OPEC market share are being reversed
Once the global oil market emerges from the coronavirus crisis, it may be greeted by a surprising change: greater dependence on crude from OPEC. For the time being, the Organization of Petroleum Exporting Countries and its allies are relinquishing their share of the market in a bid to prop up crude prices, slashing millions of barrels of output as the pandemic crushes fuel demand.

Oil Demand Isn’t Roaring Back Yet; Lifting lockdowns won’t immediately mean traveling, commuting and working like before Covid-19.
Julian Lee – Bloomberg
It was too good to be true. Last weekend’s OPEC+ meeting took a decision in record time to extend deep output cuts that had halted a dramatic slide in prices — and members even agreed to abide by them. The timing was perfect. The deal would keep oil from flooding the market, allowing time for demand to recover as economies around the world fire back up after draconian coronavirus lockdowns.

Bond Traders Grasp Grim Reality of Economy’s Long Recovery Slog
Liz McCormick – Bloomberg
Ten-year yield at about 0.7%, down from near 1% in early June; As more U.S. businesses reopen, infections rise in some states
The U.S. Treasury market’s bears weren’t in control for very long. On the cusp of a breakout higher a week ago, yields have been reeled back into familiar territory after investors reassessed just how slow and painful the economy’s revival from the pandemic may be.


Coronavirus could infect human brain and replicate, US study shows; Johns Hopkins University research adds to concern about poorly understood neurological symptoms
Clive Cookson – FT
US scientists have found the first direct evidence that coronavirus could infect the human brain and replicate inside its cells, heightening concern about the disease’s poorly understood neurological symptoms.

US foundations issue first social bonds to fund $1.7bn coronavirus fightback; Underwriters report ‘insatiable appetite’ for debt backed by donor organisations
Andrew Edgecliffe-Johnson and Patrick Temple-West – FT
Some of America’s largest philanthropic foundations are issuing “social bonds” for the first time as they look to fund a joint $1.7bn response to the coronavirus crisis without depleting their endowments.

Is the coronavirus crisis taking women back to the 1950s? Decades of advances under threat as women juggle work and childcare, while some employers target them for redundancy
Emma Jacobs and Laura Noonan – FT
A few months into juggling work and caring for two school-age children, a female finance executive based in Dublin narrowed her ambitions down to a single bullet point: “Just survival”.

Coronavirus stalks Burundi’s political elite after president’s death; Pierre Nkurunziza thought to be first head of state killed by Covid-19, diplomats say
David Pilling in London and Andres Schipani -FT
Photographs circulated on Burundian social media this weekend showing Evariste Ndayishimiye, the president-elect, signing the condolence book of recently deceased president, Pierre Nkurunziza. Such is the climate of fear and rumour in Bujumbura that some were genuinely surprised to see that the president-elect was actually alive.

Covid relief drives debt close to second world war levels; Vast government borrowing could hold back future growth, economists predict
Robert Armstrong – FT
Unprecedented government interventions to offset the economic impact of Covid-19 have driven the level of global debt close to the peaks seen in the second world war, according to Goldman Sachs.

Coronavirus tracked: the latest figures as countries fight to contain the pandemic | Free to read
FT Visual & Data Journalism team
The human cost of coronavirus has continued to mount, with more than 7.7m cases confirmed globally and more than 422,700 people known to have died.

The Bronx fends for itself as pandemic hits hard; New York’s poorest borough suffers highest death rate and is a flashpoint for racial injustice protests
Joshua Chaffin – FT
Nancy Testa walked into the kitchen at Capri Cakes, her bakery in the south Bronx, and noticed her workers smiling. “I said: ‘what’s going on?'” Ms Testa recalled. The grins, it turned out, were spawned by the realisation that the bakery had managed to survive through three months of coronavirus-induced lockdown. “It was a big deal,” Ms Testa said.

Emmanuel Macron lifts most coronavirus restrictions; French president vows to focus on rebuilding economy during final two years of mandate
Victor Mallet – FT
Emmanuel Macron has lifted most of France’s remaining coronavirus lockdown restrictions and said he would focus on rebuilding the crisis-stricken economy in the last two years of his presidency.

The First Covid Vaccines May Not Prevent You From Getting Covid
John Lauerman and James Paton – Bloomberg
FDA would consider approving a shot that prevents symptoms; ‘There will never be a truly perfect vaccine,’ expert says
Desperation for a way to keep economies from collapsing under the weight of Covid-19 could mean settling for a vaccine that prevents people from getting really sick or dying but doesn’t stop them from catching the coronavirus.

Salmon Shunned in China After Link to Beijing Virus Outbreak
Bloomberg News
The $700 million market for imported salmon in China is at risk after the fish was implicated in a new outbreak of coronavirus cases in Beijing, potentially dealing a blow to major exporters like Denmark, Norway and Australia.

China’s new coronavirus outbreak sees Beijing adopt ‘wartime’ measures as capital races to contain spread
Nectar Gan, CNN
Beijing is reintroducing strict lockdown measures and rolling out mass testing after a fresh cluster of novel coronavirus cases emerged from the city’s largest wholesale food market, sparking fears of a resurgence of the deadly outbreak.

Women In Fintech Will Play A Crucial Part In The Covid-19 Recovery Plan
Madhvi Mavadiya – Forbes
The coronavirus has prompted the U.K.’s biggest government bailout of all time. The bill for subsidies and tax breaks for businesses impacted by Covid-19 has already reached more than £100 billion and will continue to increase.

The Covid Age Penalty; New patient data offers a guide to opening while protecting seniors.
The Editorial Board – WSJ
By now it’s clear that people older than 65 are the most vulnerable to the novel coronavirus, and the age penalty is especially severe for the elderly with underlying health conditions. This is a tragedy in lives cut short, but it also means that states and cities should be able to lift their lockdowns safely if they focus on protecting vulnerable Americans.

U.S. eases criminal record provision in coronavirus business loan program
Federal authorities administering business payroll loans as part of U.S. coronavirus relief efforts on Friday eased rules prohibiting lending to business owners with criminal records, allowing some with no convictions in the past year to access funds.

Millions of Job Losses Are at Risk of Becoming Permanent
Olivia Rockeman and Jill Ward – Bloomberg
Pandemic risks causing “rellocation shock” with lasting damage; Bloomberg Economics sees huge reallocation hit to labor market
Twenty-year-old William Lovely used to work at Jason’s Deli in Virginia Beach, delivering catering orders to surrounding businesses. Now, thanks to the coronavirus, he’s struggling to pay his bills.

College Towns Fear Covid Will Leave Them as Ghost Towns; Small businesses are counting on the return of students and football fans this fall. With the virus already resurging in some places, that’s no sure bet.
Janet Lorin and Reade Pickert – Bloomberg
Colleges bring a certain indefinable something to college towns. They also bring at least two definable somethings: students and sports. Without those, many college towns would become ghost towns.

Exchanges, OTC and Clearing

Mexican stock exchange picks former Santander executive as new chief
Shareholders of Mexico’s stock exchange on Friday elected Marco Martinez, the former president of Spanish bank Santander’s Mexican unit, to be its new board president.

(Video) OCC and Axoni interview
Securities Lending Times
Matt Wolfe of OCC and Ishan Singh, Axoni discuss the recent partnership, the Renaissance Initiative and how DLT will transform securities lending

LME issues discussion paper on electronic warranting proposal
LME Press Release via Mondovisione
The London Metal Exchange (LME) today issued a market-wide discussion paper on its proposal to introduce an electronic warranting process – the process that enables customers to make and take delivery of metal.

Securities and FX markets release testing on production infrastructure
The next release of the Securities and FX markets trading and clearing systems is scheduled for 22 June 2020. We invite you to participate in the final testing that will take place this Saturday, 20 June 2020 on the production infrastructure. Start time – 12:40 MSK. The detailed plan will be published later this week.

OTC Clear Completes 1st Client Trade via Client Clearing
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce that its over-the-counter (OTC) derivatives clearing subsidiary, OTC Clearing Hong Kong Limited (OTC Clear), has successfully cleared its first trade for client clearing services, with HSBC as the clearing broker for Chong Hing Bank.

Quantile completes cleared interest rate initial margin optimisation run with LCH; Optimisation services provider Quantile has expanded its platform to include cleared interest rates following first run with LCH.
Hayley McDowell – The Trade
Quantile has added cleared interest rates to its service after completing its first cleared interest rate initial margin optimisation run with clearing house LCH.

The NYSE Floor is unrivaled in key auction events
Since the NYSE Trading Floor partially reopened on May 26, Floor Brokers have quickly restored their key role in the US equity market. Floor Brokers’ return, ahead of a key index event, has highlighted the scalability, liquidity opportunities, and execution quality of the NYSE Closing Auction.

SIX successfully completes acquisition of controlling stake in BME; The combined group will be the third largest operator of financial market infrastructure in Europe by revenue.
SIX Group
SIX has acquired a total of 77,899,990 BME shares for EUR 2,569,141,670, representing 93.16% of the equity share capital; The combination of BME and SIX, both leaders in their domestic financial markets, will create a more diversified group with a strong presence across Europe; SIX is committed to preserving and strengthening BME’s position in Spain; The combined group will benefit from a broader geographical reach, a wider range of products and services, an enhanced technical infrastructure and financial market information offer
SIX Group AG (SIX), the Swiss financial markets infrastructure operator, has successfully completed its all-cash voluntary tender offer for Bolsas y Mercados Españoles (BME), operator of the Spanish stock exchanges and cornerstone of the Spanish capital markets, securing an acceptance level of 93.16% of BME’s share capital. A total of 77,899,990 shares have been tendered at a price of 32.98 euros, representing a total of EUR 2,569,141,670 million or CHF 2,748,981,587 million. Following the settlement, SIX will acquire control of BME, which will become part of SIX.

Why Option Settlement Style Matters; Options may be cash settled or physically delivered, which is particularly important when there is a gap move in the market
There are a number of different types of options contracts available on broad-based U.S. equity indexes. Some of the most actively traded products include options on SPY, SPX options, and the Mini-SPX contract (XSPSM). They all track the S&P 500® and both SPY and Mini-SPX options have the same notional size, making them somewhat interchangeable. A key difference, however, is settlement style.


UBS deploys machine learning to customise bond liquidity for clients; Mark Goodman tells The TRADE about using machine learning technology to customise bond axes and liquidity for clients in UBS Bond Port.
Hayley McDowell – The Trade
UBS has recently implemented machine learning technology to data within its Bond Port fixed income platform, as it looked to customise liquidity for its clients.

IHS Markit Adds iBoxx Bond Indices to Securities Lending Performance Reports
IHS Markit (NYSE: INFO), a world leader in critical information, analytics and solutions, today announced that its monthly securities lending performance reports now analyze six global iBoxx bond indices, including: iBoxx USD Liquid High Yield, iBoxx USD Liquid Investment Grade, iBoxx EUR Corporates, iBoxx EUR Sovereigns, iBoxx USD Treasuries and iBoxx Global Government indices.

ByteDance in talks with Singapore’s Lee family on banking licence bid; Chinese tech group behind TikTok seeks to expand reach with move into financial services
Mercedes Ruehl – FT
ByteDance is in talks to join forces with Singapore’s influential Lee business family, as the Chinese technology group looks to expand into banking for the first time.

Eris Innovations – Connamara, AWS, and Bloomberg Case Study; Eris Innovations migrates to AWS and achieves reliable data delivery and up to 50% savings by leveraging Connamara Systems and real-time data from Bloomberg
Connamara Systems
Executive Summary
By migrating its virtual machines (VMs) from a locally-hosted data center to Amazon Web Services (AWS), Eris Innovations (Eris) increased platform availability and reduced monthly costs. Eris worked with its software solutions provider, Connamara Systems, and data offering provider, Bloomberg, to successfully migrate their platform. The new platform was completed in less than two months. It succeeded in increasing availability, enhancing security and redundancy, adding speed and functionality, and reducing costs up to 50% per month.

Twitter Restores Zero Hedge Account After Admitting Error
Siraj Datoo – Bloomberg
Twitter Inc. reinstated the account of Zero Hedge after suspending it earlier this year, saying it made a mistake in accusing the libertarian financial website of violating rules against harassment.


India may ban cryptocurrencies again? and it’s unnerving the community
Rounak Jain – Business Insider
While the Indian government is inching closer to banning cryptocurrencies with a new law, crypto companies believe “thoughtful regulation” is needed instead of a ban.
A little over two months after the Supreme Court quashed a circular issued by the Reserve Bank of India, banning banks from cryptocurrency trading, the ministry of finance has reportedly passed a draft cabinet note that seeks to set up a legal framework for banning cryptocurrencies in India.

Bitcoin Crashes Under $9,000 As $10 Billion Wiped From Crypto Markets
Billy Bambrough – Forbes
Bitcoin and the wider cryptocurrency market has been searching for direction over the last few days but it’s finally made a move.
The bitcoin price, after taking another failed run at the $10,000 per bitcoin level last week, has shed around 5% in the last 24 hours—dropping to under $9,000 for the first time since late May.

SECDEX Digital Custodian goes live with over half a billion USD of tokenised assets; First entity regulated under Seychelles FSA regulatory Sandbox
The Seychelles-based SECDEX Group, which comprises a licensed, regulated exchange (offering traditional and digital assets), central counterparty clearing house (CCP) and central securities depository with registry, is pleased to announce the latest addition to the group, SECDEX Digital Custodian (SDC). SDC has been granted a licence under the Financial Services Authority (FSA) Sandbox to offer digital custody services and is now live.

Crypto Long & Short: Cryptocurrency Markets May Be Decentralized, but They’re Still Accountable
Noelle Acheson – Yahoo Finance
One underappreciated feature of crypto markets is the lack of centralization. I mean, people know crypto assets are decentralized and trade on exchanges all over the world. But what’s often overlooked is the relative ease with which people can change the venues they buy and sell their holdings on.

Just-Launched Ziglu Wants to Make It Stupid Easy to Buy Crypto
Ian Allison – Coindesk
U.K.-based cryptocurrency platform Ziglu has launched, following a £5.25 million (US$6.6 million) seed round. As a starting point, the platform aims to painlessly put crypto in the hands of consumers.

Baseline Co-Founder Says Crypto Is ‘Pre-CompuServe’ and Still in Its Early Days
Samuel Haig – CoinTelegraph
The co-founder of the Baseline Protocol believes that crypto is still 15 – 20 years away from finding significant mainstream adoption. ConsenSys developer and Baseline Protocol co-founder, John Wolpert, has predicted that we may still be decades away from seeing wholesale mainstream adoption of crypto assets and distributed ledger technologies.

Crypto Exchange Huobi Will Introduce Bi-Quarterly Futures Contracts with Version 4.2.0 Upgrade
Press Release
Huobi Futures has launch its latest 4.2.0 upgrade on June 14, 2020, and introduced a new futures product — Bi-Quarterly Contracts on June 15. These contracts join Huobi’s successful stable of derivatives trading tools and come soon after the successful launch of perpetual swaps, which it launched in late March – years after the biggest competitor in the space.
The decision to further enrich the offerings from the Huobi Futures team comes after topping the daily trading volume in coin-margined perpetual swaps only a few months after it launched.

China report claims a hacked crypto-exchange is behind three abnormal multi-million Ethereum (ETH) fees
Shaurya Malwa – CryptoSlate
Since the past few days, certain, and rather strange, transactions are stirring up debate in the Ethereum community. Data shows someone, an entity or individual, spent millions in transaction fees for just a few hundreds of dollars in the actual transfer – a rarely seen occurrence.
But a new report out of China claims a cryptocurrency exchange has fallen victim to hackers, explaining over $5.7 million spent on Ethereum fees earlier this week.


Meatpacking workers often absent after Trump order to reopen
Tom Polansek, Andy Sullivan – Reuters
Smithfield Foods Inc [SFII.UL] is missing about a third of its employees at a South Dakota pork plant because they are quarantined or afraid to return to work after a severe coronavirus outbreak, according to the workers’ union.

The Court-Martial of Donald J. Trump; The intensifying rift between the military and the president demands attention.
Frank Bruni – NY Times
President Trump delivering the commencement address at the United States Military Academy in West Point, N.Y., on Saturday.Credit…Anna Moneymaker/The New York Times
The first time I saw President Trump referred to as “Cadet Bone Spurs” I laughed, the second time I smiled and the third time I cringed. It’s an apt slur, but it lumps him together with all the other politicians whose military huzzahs contradict their personal histories and whose insult to our men and women in uniform can be reduced to dodging the draft.

Expanded Tax Break for Charitable Gifts Gains Support in Congress; Bipartisan group of senators is pitching idea for next economic-relief legislation to help nonprofits and middle-class donors, as giving drops
Richard Rubin –
A bipartisan effort to expand tax breaks for charitable donations is gaining momentum in Congress, as nonprofit groups struggle during the pandemic. Senators, including James Lankford (R., Okla.) and Jeanne Shaheen (D., N.H.), want to let taxpayers deduct charitable donations, even if they don’t itemize their deductions. Their plan would greatly increase a small tax break created in March that allowed such extra charitable deductions. Their plan would limit that to one-third of the standard deduction. In 2020, that is $4,133 for individuals and $8,267 for married couples.

Black Lives Matter does a lot with a little; Small groups of largely autonomous activists have managed to inspire and guide global protests
Kadhim Shubber and Katrina Manson, and Claire Bushey – FT
When the mayor of Washington recently painted “Black Lives Matter” on a street near the White House, it drew the ire of local civil rights activists operating under the name.

Systemic racism slows economic growth: Dallas Fed chief Kaplan
Doina Chiacu – Rueters
Systemic racism and high unemployment levels among black and Hispanic Americans create a drag on the U.S. economy, Dallas Federal Reserve President Robert Kaplan said on Sunday.

Energy Industry Jilts Trump With Curb on Campaign Donations
Jeffrey Taylor and Bill Allison – Bloomberg
Slimmer wallets, crude price drops and distrust among reasons; Some in industry say relationship with Trump is improving
The oil and gas industry, long one of the most reliable sources of campaign cash for Republican candidates at all levels, is turning a cold shoulder to President Donald Trump.


People Moves: CFTC; Eventus Systems, Rozetta, RJ O’Brien, Outset Global; Some of the key people moves from this week, including CFTC Chairman Heath Tarbert (pictured), who joins the Iosco board. Photo: CQ-Roll Call/SIPA USA/PA Images
Joanna Wright – Waters Technology
CFTC Assumes Key Role in Iosco Leadership
On Tuesday, June 9, the International Organization of Securities Commissions (Iosco) announced the election and immediate appointment of Commodity Futures Trading Commission (CFTC) Chairman Heath Tarbert as Iosco Board vice chair for the term 2020 to 2022. Tarbert is the first CFTC chairman to be elected to join the leadership of the Iosco Board since the international standard-setting body was established in 1983.

UK retailers warned of insider trading risk with reopening plans; FCA told companies to take extra steps to protect crucial information
Matthew Vincent – FT
Stock market listed retailers have been warned that their reopening plans may include price-sensitive information that staff must guard against the risk of insider trading.

Coronavirus (COVID-19) Update—Extension to Certain Regulatory Relief for FCMs, RFEDs, FDMs, IBs and SDs
The CFTC recently issued a no-action letter extending through September 30, 2020, certain no-action relief issued in response to the COVID-19 pandemic. This relief, previously set to expire on June 30, 2020, applies to certain regulatory obligations of FCMs, RFEDs (i.e., FDMs), IBs and SDs. NFA is also extending through September 30, 2020 similar relief for Members that are in compliance with the terms of the CFTC’s no-action relief. Specific relief subject to this extension is detailed in NFA’s Notice to Members I-20-13.

SEC Charges Broker Who Defrauded Seniors Out of Almost $1 Million
The U.S. Securities and Exchange Commission today announced charges against a Nashville, Tennessee-based securities broker for defrauding two seniors, including a World War II-era veteran, of nearly $1 million.

Societe Generale Securities Australia Pty Ltd accepts additional AFS license conditions
ASIC has imposed additional conditions on the Australian financial services (AFS) licence of Societe Generale Securities Australia Pty Ltd (SGSAPL) to ensure compliance with client money regulations.

Investment funds told to correct advertising and disclosure
Today ASIC put responsible entities (REs) of all managed investment schemes (MISs) ‘on notice’ that they must ensure their investment fund advertising provides clear, balanced and accurate information. This follows ASIC’s risk based surveillance of advertising material, website disclosure and product disclosure statements from managed funds during the COVID-19 pandemic. ASIC was concerned to find some funds were providing inadequate information or were not accurately and clearly presenting key features of their investment products.

New social media law will ensnare citizens alongside Big Tech; The flawed French rules will have an unjustifiable impact on free expression
Julia Apostle – FT
Social media moderation and its impact on democracy is again in the spotlight following US president Donald Trump’s controversial posts on Twitter and Facebook regarding the George Floyd protests. Twitter hid a particularly offensive post behind a warning label and Facebook proactively announced that it would do nothing.

SEC Probing Kyle Bass’s Statements Over UDF Short Position: DJ
Sebastian Tong – Bloomberg
The U.S. Securities and Exchange Commission is looking into whether statements made by hedge fund manager Kyle Bass in relation to his short position in Texas real-estate lender United Development Funding IV conveyed false or misleading statements amounting to market manipulation, Dow Jones reported, citing people familiar with the matter that it didn’t identify.

Investing and Trading

The super-rich have a history of doing well out of a global crisis; As usual, the wealthy find themselves ready to ride the rebound
Rhymer Rigby – FT
It is hardly news that some people have had a “better” pandemic than others. Rocketing demand for online shopping has seen Amazon boss Jeff Bezos top up his fortune by $31bn since the end of 2019, according to the Bloomberg Billionaires Index, a leading global ranking.

ESG investing cries out for trained finance professionals; Sustainable finance is a growth area, but competing standards make it tricky to teach
Sarah Murray – FT
Finance students at NYU Stern School of Business learn about environmental, social and governance (ESG) investment with the help of hard cash as well as lectures. They invest real money through a teaching fund that is at the heart of an experiential learning course. But setting up an ESG portfolio proved to be an education for staff as well as students.

Investors enjoy equity-like returns from a roaring bond market; Debt issued by a string of blue-chip companies is trading up to 40 per cent higher
Joe Rennison in London and Eric Platt – FT
Bonds sold since March by blue-chip US companies including Northrop Grumman, Intel and Coca-Cola have surged in value, as investors scrambled to get hold of the unusually high coupons offered during the most intense phase of the pandemic.

Mark Cuban Tells CEOs to Examine Compensation, or Get ‘Crushed’
Maria Jose Valero – Bloomberg
Dallas Mavericks owner Mark Cuban took to Twitter on Friday to warn CEOs that their companies may get “crushed” if executive compensation and reward structures are not re-evaluated.

BP Writes Off Billions as Covid Redraws Rules of Oil Demand
Laura Hurst and Amanda Jordan – Bloomberg
Oil major lowers its long-term energy price assumptions; Review of projects may result in some oil being left in ground
BP Plc will make the biggest writedown in a decade on the value of its business, as the British oil major predicts the coronavirus pandemic will hurt long-term demand and accelerate the shift to cleaner energy.

You Now Get Almost Nothing for Your Money, but It Could Be Worse; In this crisis, money is priceless, yet banks and money market funds will pay you close to zero in interest for years. That’s if everything turns out well.
Jeff Sommer – NY Times
Having enough cash on hand to pay the bills is always a good idea. But in an economic crisis like this one, with millions unemployed and thousands of businesses in trouble, it’s more desirable than ever.

Bond Investors Are Facing a Conundrum Over Europe’s Safest Asset
Eddie Spence – Bloomberg
Bunds caught in tug-of-war between virus risk vs ECB support; Yields began rising last month before retracing this week
The rally in German bonds in the past week has reminded fund managers why betting against Europe’s safest assets is a risky business. The debt slid last month as economies showed signs of recovering from the ravages of the coronavirus epidemic, leading some analysts to predict yields would soon turn positive after a year below zero. Instead, worries over a second wave led investors to dump stocks and turn to havens such as bunds.


Commerzbank preparing to make more job cuts: board member
Commerzbank (CBKG.DE) will announce “considerably” more branch closures and job cuts when it lays out its strategy review in August, a member of the bank’s supervisory board said on Monday.

New York Hedge-Fund Traders Aim to Avoid City Tax by WFH; Firms say many fees were for services performed outside the city and therefore not subject to the city tax
Josh Barbanel – WSJ
Many employees at New York City hedge funds and other investment firms are now scattered around the region, working from home. Some view that as an opportunity to avoid a New York City tax, tax specialists say.

Majority of ESG funds outperform wider market over 10 years; Study of sustainable funds counters claims that ESG investment comes at the expense of performance
Siobhan Riding – FT
Close to six out of 10 sustainable funds delivered higher returns than equivalent conventional funds over the past decade, according to a study that undermines claims that investing based on environmental, social and governance principles hampers performance.

Renaissance hedge fund loses 20% this year; Secretive firm founded by Jim Simons caught out by market volatility
Laurence Fletcher and Ortenca Aliaj – FT
Renaissance Technologies, one of the world’s largest and best-known hedge funds, has extended its recent run of poor performance and has recorded double-digit losses this year, according to investors.

Why Convicted Ex-UBS Worker Likely a No-Show at Swiss Appeal
Hugo Miller – Bloomberg
Man skipped trial to stay in Germany, judge said at the time; Lack of hard evidence to justify his conviction, lawyer says
Call it the Falciani Principle. A former UBS Group AG employee who’s appealing his conviction for commercial espionage and money laundering is unlikely to risk arrest by showing up at a Swiss court Monday morning. The man, only identified as Rene S., was convicted in absentia last year after fleeing to Germany. That’s similar to Herve Falciani, the former HSBC Holdings Plc’s employee who escaped to France and was found guilty in 2015 of stealing client data.

Danske Bank Axes Administrative Jobs in Bid to Cut Bureaucracy
Morten Buttler – Bloomberg
Danske Bank A/S is firing scores of people who had focused on business development and technology, as part of a broader revamp of its organization designed to cut bureaucracy.

Ex-JPMorgan Credit Trader’s Hedge Fund Starts With $200 Million
Alastair Marsh and Nishant Kumar – Bloomberg
Fajr Bouguettaya left JPMorgan in 2018 to set up BirchLane; Most of BirchLane’s funding said to come from single investor
BirchLane Capital, a hedge fund started by a former top credit trader at JPMorgan Chase & Co. who helped unwind bets made by the so-called London Whale, has started trading with more than $200 million of assets.


PBOC Liquidity Stance Leaves Banks Looking for More Action
Bloomberg News
Central bank offered 200 billion yuan of medium-term loans; RRR cut likely this month to avoid liquidity squeeze: analysts
The People’s Bank of China supplied banks with 200 billion yuan ($28 billion) in fresh liquidity Monday while letting some previous loans expire, leaving the financial system needing further injections if a looming cash crunch is to be avoided.

Traders Gear Up for Hong Kong to Defend Dollar Peg for 7th Day
Kari Soo Lindberg – Bloomberg
Hong Kong dollar is still trading near the strong end of band; City seeing more capital inflows than outflows, Paul Chan says
Traders are preparing for Hong Kong’s de facto central bank to defend the local currency’s peg to the greenback for the seventh straight session, the longest run in five years. The city’s dollar remains strong despite last week’s interventions, trading at 7.7504 versus the greenback Monday afternoon in Hong Kong. That’s just 4 pips away from the strongest it can technically trade. The Hong Kong Monetary Authority sold HK$1.43 billion ($185 million) of local dollars on Friday, taking the total since it began intervening in April to HK$49.45 billion.

Saudis Cut Oil Supply to Some Asian Buyers by Up to 40%
Sharon Cho, Serene Cheong, and Tsuyoshi Inajima – Bloomberg
Producers curb contracted oil volumes for July to five buyers; Three Japanese buyers spared curbs after getting cut in June
Saudi Arabia reduced the amount of crude it will supply next month to five refiners in Asia after OPEC+ agreed to extend its historic output cuts through July.

Owner of Asia’s ‘Fort Knox’ Sues Over Failed Freeport Sale
Chanyaporn Chanjaroen and Hugo Miller – Bloomberg
Yves Bouvier says prospective buyer breached contract; Singapore’s Le Freeport is for sale after a decade of losses
Swiss art dealer Yves Bouvier is suing a group of businessmen who he alleges agreed to buy his Singapore freeport for about $60 million before repeatedly delaying and ultimately reneging on the deal. Jaime Ordonez and two associates caused Tayrona Pacific Star Pte to breach the terms of an October 2019 contract to buy Le Freeport, according to a lawsuit filed in Singapore’s High Court. They pushed the deal completion date back on four separate occasions, citing among other things a negative article about Bouvier’s business on one occasion and concerns about the condition of Le Freeport’s infrastructure on another, the lawsuit alleges.

Sweden Weighs Stricter Bond-Trading Rules After Funds Gated
Love Liman and Rafaela Lindeberg – Bloomberg
Sweden’s financial watchdog says it may need to tighten rules around bond trading following a liquidity crunch that led 35 fixed-income funds to slam shut in March. Peter Svensson, a spokesman for the Financial Supervisory Authority in Stockholm, said one area of particular interest is an exemption granted to Swedish securities firms a few years back, essentially giving them more lenient reporting obligations.

Norway’s $1 Trillion Fund Should Deepen Weapons Ban, Panel Says
Mikael Holter – Bloomberg
Norway should strengthen a ban on its $1 trillion sovereign wealth fund investing in certain weapons makers, a government-appointed commission said. The weapons rules should include a ban on so-called lethal autonomous weapons and restrict ownership of companies that produce submarines and other vehicles that deliver nuclear weapons, the commission said in a report published on Monday. The panel, led by law professor Ola Mestad, also advised a new rule against the sale of weapons to states where there is an unacceptable risk of violations of humanitarian law.

Oil Spill Taints Kremlin Plan to Sell $4 Billion of Green Bonds
Evgenia Pismennaya and Aine Quinn – Bloomberg
State development bank plans to set up green bond guidelines; Investors say green finance might be tough sell for Russia
Russia’s state development bank wants to start turning the world’s biggest energy exporter into a hub for green finance days after a 20,000-ton diesel spill in the nation’s far north.

Hong Kong’s Rich Are Preparing for a Worst-Case Scenario
Alfred Liu, Lulu Yilun Chen, and Vinicy Chan – Bloomberg
They’re opening offshore accounts, applying for new passports; ‘I’m just trying to protect my money against any uncertainty’
One Hong Kong businessman moved $10 million to Singapore and plans to transfer more. Another is eyeing London property, worried that prices in Hong Kong are too high. Well-to-do families across the city are opening offshore bank accounts and applying for alternative passports.


Winesellers accuse government of misleading over Brexit costs; Prices will rise and choice fall given ‘catastrophic’ impact from red tape
Daniel Thomas and Laura Hughes – FT
The UK wine industry has accused the government of misleading the public over the cost of not securing a trade deal with the EU, warning that prices would rise and choice fall given the “catastrophic” impact from border red tape.

Boris Johnson seeks to galvanise Brexit talks with EU chiefs; Brussels has warned it will not sacrifice the bloc’s economic interests for the sake of a deal
Jim Brunsden and Laura Hughes – FT
Boris Johnson will push for rapid progress in future-relationship talks with the EU on a call with the bloc’s chiefs on Monday, as Brussels warned it would not sacrifice its economic interests for the sake of a deal.


Call Centers Discover WFH Doesn’t Work for Them; Concern about data security, power outages, and poor internet service fuels a return to offices.
Bruce Einhorn, Siegfrid Alegado – Bloomberg
For Americans with questions about their bank accounts, mobile phone service, or e-commerce orders, getting answers has long involved talking on the phone with someone in the Philippines, where English-speaking operators handle queries, complaints, and other calls. U.S. companies outsourcing this kind of customer service benefit from lower labor costs while counting on their Philippine operators to keep customers’ confidential information safe within the walls of the call centers.

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