Hits & Takes
EXPO week has come and gone. It was largely successful from JLN’s perspective. We conducted over 15 interviews in the booth we shared with Cinnober. Thank you to Cinnober for this kind collaboration. Our staff attended several of the panels and we saw lots of our readers, sponsors and industry friends. Congratulations to FIA and their staff for pulling this off again so well.~JJL
One of the realities of EXPO week was I don’t currently have the stamina to attend a trade show and then go out partying afterwards. I passed on the CME Group sponsored party on Wednesday and the Great Steakout on Thursday, despite wanting to attend both.~JJL
CME Group’s Terry Duffy had a memorable reply at the exchange leader panel at the FIA EXPO conference last week. When commenting on diversity and race, he said the only race he knows is the human race.~JJL
Based on social media metrics, four of the top five global banks are based in India, according to data collated by The Financial Brand.~SD
Professor James Angel has written a paper titled “Retail investors get a sweet deal: The cost of a SIP of stock market data.”~JJL
Friday I took the day off to visit one of my scouts who had been in the hospital for five weeks and had surgery last week. He finally came home Friday afternoon and Saturday he visited our campout, which was nearby. There is nothing like Scout spirit.~JJL
FIA 2018 charts the rise of institutional crypto investors
Matt Raebel, John Lothian News
Like most people, I tend to pay more attention when someone directly addresses me or people like me. As a millennial, I tend to exercise this principle a lot, as we’ve been inundated by the word “millennials” over the past 10 years or so. We’re a hot topic. At the FIA Expo this year, the talks focusing on Digital Assets mentioned millennials frequently. This ranged from comments explicitly mentioning my demographic’s greater activity in crypto trading and investment compared with other generations, to jokes about using Bakkt to buy pumpkin spice lattes – a stereotypical seasonal favorite for younger consumers – with bitcoin.
Bridging the Week: October 15 – 19 and October 22, 2018 (Bitcoin Fraud; Smart Contracts; Actual Delivery; Reg AT)
Gary DeWaal – Bridging the Week
The Commodity Futures Trading Commission obtained orders from a federal court in New York concluding its first-filed enforcement action against persons for bitcoin fraud. However, the outcome of an unrelated action having nothing to do with cryptocurrencies and pending in a federal court of appeals in California may have greater implications for the CFTC’s cryptocurrency enforcement efforts going forward. Separately, CFTC Chairman J. Christopher Giancarlo announced before an industry gathering last week that Reg AT – a 2015 Commission proposal to augment regulations regarding algorithmic trading purportedly to mitigate risks – was officially dead. Likely, no algorithmic traders mourned.
Quants Now Trade Exotic Stuff. But Can They Handle Illiquidity?
Nishant Kumar – Bloomberg
Computer models seek to profit from trends in niche markets; Some critics warn investors may get stuck during selloffs
The search for elusive alpha is sending a handful of computer-driven hedge funds trawling the remotest corners of financial markets. They’re a subset of the trend-following strategies known as commodity trading advisers, or CTAs, that were popular when central banks pushed up stocks and bonds over the past decade. Now a few of them are seeking uncorrelated returns and a little extra alpha in anything from cheese and Turkish scrap steel to obscure chemicals or eggs in China.
***** Look up the definition of “Roach Motel” before trading “exotic stuff.”~JJL
Friday’s Top Three
Our top read piece from Friday was Chuck Mackie’s coverage of FIA Expo from day one. Second went to the FT’s The heyday of the ugly American. And third went to the Wall Street Journal’s U.S. Banks Make Hay of European Trading Rules
134,089,723 pages viewed; 23,294 pages; 215,245 edits
Intercontinental Exchange Announces Launch of Permian WTI Crude Oil Futures Deliverable in Houston
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced the launch today of physically delivered Permian WTI (Contract code: HOU) crude oil futures, deliverable in Houston, Texas. Houston has become the pricing center for U.S. crude oil production and exports, and the new Permian WTI futures contract is designed to serve hedging and trading opportunities in this growing market.
Nasa says quantum computing is the future for funds; Study co-written with Standard Chartered points to benefits of faster processing
Owen Walker – FT
Embracing quantum computing may be a small step for asset managers but it would be a giant leap for investment decision-making, says a forthcoming report co-written by the US space agency.
The Real Currency Manipulators Get Off the Hook; Despite all the bluster, China isn’t the worst perpetrator. Strategic U.S. allies like Taiwan, Malaysia and South Korea get a lot more leeway.
David Fickling – Bloomberg
When is a currency manipulator not a currency manipulator? When it’s your friend
That’s the best conclusion to draw from the U.S. Treasury Department’s latest report on the macroeconomic and foreign-exchange policies of major trading partners, handed up to Congress Wednesday.
Wall Street enjoys trading bonanza from market turmoil; Big banks have best summer for equities revenues since 2009
Laura Noonan and Robert Armstrong – FT
Wall Street firms are on track for their best year in equities trading for a decade – a silver lining to the market turmoil that has created misery for big bank shareholders over the past few months.
China Health Checkmate Commits to Initial Series B Funding for Bcause LLC
China Health Checkmate (CHC) and Bcause LLC, creator of what is believed to be the world’s first full-stack cryptocurrency ecosystem, announced today that CHC has committed to serve as the initial investor in the Bcause Series B capital raise*. In this equity round, CHC has agreed to acquire an undisclosed but substantial amount of the equity shares of Bcause LLC, which will enable Bcause to open its spot cryptocurrency exchange in the near term and to jointly shape a project to launch exchange-related cryptocurrency initiatives to be co-located in Asia.
Nobel winner Muhammad Yunus wants two financial systems – one for the rich and one for the poor
Eshe Nelson – Quartz
For more than 40 years, Muhammad Yunus has been building a financial system for people who lack sufficient access to the one that already exists. In 2006, the now 78-year old won the Nobel Peace Prize for his work as “banker to the poor.”
UBS warns staff over China travel after banker held in Beijing: source
Swiss bank UBS Group AG. (UBSG.S) has asked its China wealth management staff to reconsider their travel plans to the country after authorities there asked one of its bankers to delay her departure from Beijing to meet with local officials, a person familiar with the matter said.
Global banks curb China travel after UBS banker stopped from leaving
Sumeet Chatterjee, Clare Jim – Reuters
Global banks including Citigroup (C.N) and Standard Chartered (STAN.L) have asked their private banking staff to postpone or reconsider travel to China after authorities there prevented a UBS (UBSG.S) banker from leaving the country, sources said.
Suddenly Toxic, Saudi Prince Is Shunned by Investors He Courted
Glen Carey – Bloomberg
Crown prince under pressure to provide answers about Khashoggi; He may become threat to his own project of attracting business
He was the man who sold the world on his vision of a Saudi economy no longer dependent on oil. Now Crown Prince Mohammed bin Salman could become the biggest risk to his own project. Everything changed when Jamal Khashoggi walked into the Saudi consulate in Istanbul on Oct. 2 and didn’t come out. Allegations rapidly spread that the Washington-based journalist was murdered by a hit team sent from Riyadh. And suspicion naturally fell on the oil-rich kingdom’s de facto ruler, the 33-year-old heir to the throne.
What the Permian Oil Boom Looks Like; RV parks, 24-hour laundromats, a brand-new Bennigan’s and other signs of a world-changing oil rush.
Justin Fox – Bloomberg
The first clear indication that I had entered an area experiencing an oil boom was the Halliburton Co. office with a “Now Hiring” sign out front on the north side of Artesia, New Mexico. Next came a couple of equipment rental places with some unfamiliar-looking equipment on their lots, then the first of what were to be many billboards advertising personal injury lawyers specializing in oilfield injuries and truck accidents (“$5.2 Million: Oilfield Explosion, Burn Injury” read one that I saw a little later from the Albuquerque law firm of Glasheen, Valles & Inderman). Tanker car after tanker car after tanker car sat on the railroad tracks to the left of the road, followed by what I eventually realized were lots of cars for hauling sand. Behind the railcars, I began to see the outlines of what appeared to be a giant refinery complex.
Saudi Arabia: how the Khashoggi killing threatens to overturn the prince’s project; The role of the Public Investment Fund was to reshape the kingdom’s economy and attract overseas money, its mission is now much harder
Andrew England and Simeon Kerr – FT
Just months after King Salman ascended to the throne, he presided over a cabinet meeting that would have a profound effect on the future of Saudi Arabia and the way the world’s top bankers view the conservative kingdom.
UBS moves back into battle for rich Americans; Swiss bank to pursue ‘ultra high net worth’ US clients 9 years after $780m fine
Stephen Morris, Ralph Atkins and Alice Ross – FT
UBS is putting super-rich Americans at the centre of its new strategy to boost growth, nine years after it was fined $780m by the US Department of Justice for helping thousands of clients evade taxes.
What Jamal Khashoggi’s death could mean for oil markets; While the Saudis have US support, the kingdom will boost production
Nick Butler – FT
The disappearance and death of Saudi journalist Jamal Khashoggi continues to produce unexpected consequences and to reshape relationships in the Middle East and beyond. Turkey has been surprisingly tough in its response, while US president Donald Trump has said that the affair will have “very serious consequences” for Saudi Arabia.
Tradeweb IPO being considered, says owner; Future of bond trading venue has been a topic of debate since
Samuel Agini – Financial News
The chief executive of Blackstone-owned Refinitiv has given the clearest indication yet that a multi-billion-dollar initial public offering of one of the world’s largest bond trading platforms is under consideration.
Beijing finds unlikely anti-Trump weapon in global indices; Inclusion of Chinese shares in major EM index has helped steady inflows
James Kynge – FT
A trade war is raging between the US and China, but somebody forgot to tell foreign portfolio investors. Surging inflows of foreign capital have headed to the Chinese bond and stock markets and helped to stem the depreciation of the renminbi against the US dollar.
Hedge Funds In A Time of Wear and Tear
The latest report from Eurekahedge tells us that Asia-focused strategies in the hedge fund universe are showing the wear and tear of the US/China trade dispute. The Eurekahedge Greater China Hedge Fund Index shows losses of 8.16% through the first nine months of the year. The Eurekahedge commentary observes that the People’s Bank of China decided to reduce its reserve requirements in early October in a bid to improve liquidity.
Exchanges, OTC and Clearing
ICE’s new Houston crude futures contract begins trading
Intercontinental Exchange Inc said its new Permian West Texas Intermediate (WTI) crude oil futures contract deliverable in Houston, Texas, will begin trading on Monday.
Maker-Taker Malaise: LSE’s Turquoise Bins Broker Rebates
Tim Cave – TABB Forum
The focus on exchange rebates moved from the US to Europe this month, as equity venue Turquoise announced plans to abolish certain rebates on its lit book. TABB’s Tim Cave examines the maker-taker controversy as efforts to re-tilt the market structure playing field back in favour of investors gather steam globally and breaks down the drivers and implications of Turquoise’s decision.
Amendments to the FCM Regulations and FCM Default Rules of Eurex Clearing AG
On 24 August 2018, Eurex Clearing published Eurex Clearing circular 072/18, which announced Eurex Clearing’s plan to launch a refined Legally Segregated Operationally Commingled (LSOC) framework as soon as final CFTC approval is received, as well as corresponding amendments, including renewed Futures Commission Merchant (FCM) Regulations exclusively for the LSOC framework and FCM Default Rules.
Amendment of the Clearing Conditions related to Reporting Requirements in accordance with Part 45 of the Rules by the U.S. Commodity Futures Trading Commission (CFTC)
With this circular, Eurex Clearing AG (Eurex Clearing) announces the amendment of the Clearing Conditions of Eurex Clearing in relation to trade submissions from an Approved Trade Source (ATS) which is not a Swaps Execution Facility (SEF) to EurexOTC Clear in order to ensure compliance with Swap Data Reporting (SDR) Requirements under Part 45 of the CFTC rules. The changes will be effective on 12 November 2018.
Amendments to the Clearing Conditions and to the Price List of Eurex Clearing AG regarding the generalisation of Repo transactions
This circular contains information with respect to Eurex Clearing’s service offering and corresponding amendments to the Clearing Conditions of Eurex Clearing AG (Clearing Conditions) regarding the following topics:
Clearing fees for transactions concluded on the Frankfurt Stock Exchange and OTC transactions as part of the T7 Entry Service
Starting 5 December 2018, the entry of transactions concluded on the Frankfurt Stock Exchange (Frankfurter Wertpapierborse, FWB) and OTC transactions in the Xetra T7 trading system will be enabled via a new T7 Entry Service.
DTCC Unveils New Data Offering For Institutional Investors Seeking Insights Into U.S. Equity Markets – DTCC Equity Kinetics Offers An Aggregated View Of All U.S. Equity Trade Volumes Over Time, In The Context Of Broader Market Activity
The Depository Trust & Clearing Corporation (DTCC), the premier post-trade market infrastructure for the global financial services industry, today announced the release of its latest Data Services product, DTCC Equity Kinetics, providing institutional investors with a comprehensive depth of market view of activity across all U.S. equity trading venues. The data is therefore ideal for quantitative market participants seeking insights to enhance their understanding of the U.S. equities markets.
John Mack, Old-School Financier, Coaches Fintech Wannabes; Former Morgan Stanley CEO is among former Wall Street executives now reinventing themselves in fintech
Liz Hoffman – WSJ
A decade after the financial crisis, The Wall Street Journal has checked in on dozens of the bankers, government officials chief executives, hedge-fund managers and others who left a mark on that period to find out what they are doing now. Today, we spotlight former Morgan Stanley CEO John Mack.
Broadridge launches new global asset servicing solution
Broadridge Financial Solutions has launched a new solution aimed at addressing key industry, business and operational challenges with global asset servicing.
Global Network Management: Artificial Intelligence the Charm?
Chris Kentouris – FinOps
For global custody network managers, analyzing the tsunami of data on dozens of local agent banks and markets to ensure the safety of client assets remains a sore spot. The use of artificial intelligence appears to be an elusive ideal, acknowledge panelists and attendees at a recent global custody event in New York hosted by The Network Forum, a London-headquartered networking group for custody specialist worldwide. Instead, the drudgery of creating and sending local agent banks dozens if not hundreds of questions and manually reviewing all of the answers is the accepted norm.
FCA: Regtechs must be realistic about their capabilities
Rebekah Tunstead – bobsguide
Regtech organisations need to be honest about their capabilities, according to Nick Cook, head of regtech and advanced analytics at the UK’s Financial Conduct Authority (FCA), during a panel discussion at this year’s Money20/20.
Goldman-backed fintech startup Marqeta launches in Europe
Anna Irrera – Reuters
Marqeta, a U.S. financial technology startup that helps young companies including digital-only banks issue payment cards, has expanded into Europe, the company said on Sunday.
FlexTrade Integrates ipushpull Real-Time Interoperability Platform Into FlexNOW EMS – Provides Real-Time Data Sharing & Improved Workflow Automation
FlexTrade Systems (@FlexTrade) today announced the integration of ipushpull (iPP), a real-time interoperability platform, with its FlexNOW execution management system to provide users with access to iPP’s live data sharing and workflow automation between desktop applications, messaging platforms, in-house systems and cloud services.
Is Coinbase Listing Tezos or Is CEO Brian Armstrong Really Tweeting About Weight Loss
Krystle M – Bitconinexchangeguide.com
Suggestions of Baking from Coinbase’s CEO Leaves Investors Wondering If It’s a Hint that Tezos is their New Altcoin
Deribit Ranks as Fastest Crypto Exchange, Based on Its Own Order Speed Analysis
Bitcoin Exchange Guide News Team
Speed is one of the most important factors when it comes to trading cryptocurrencies, more so for those who’re engaged in high-frequency trading. When executing orders, every millisecond counts. Actually a fraction of a second can make a big difference between loss and profit.
Checkbooks Ready! US Marshals to Hold $4 Million Bitcoin Auction
The US Marshals Service has announced an upcoming auction for over $4 million worth of bitcoin seized during various legal proceedings. The sealed bid auction, which is scheduled to take place in November, will offer approximately 660 BTC seized during about 31 federal criminal, civil and administrative cases under the asset forfeiture framework of the Department of Justice.
How the Dollar-Backed Crypto Tether Might Be Influencing the Price of Bitcoin; Should crypto investors be concerned about the drop below $1 in the stablecoin, as cryptos that are tied to the value of other assets are known?
Tanzeel Akhtar – The Street
There are many red flags surrounding the cryptocurrency Tether (USDT). The first is the lack of transparency surrounding the cryptocurrency.
Monero Fees Fall to Almost Zero After ‘Bulletproofs’ Upgrade
Rachel Rose O’Leary – Coindesk
Transaction fees on the monero network have fallen sharply after last Thursday’s system-wide update. The reduction comes in the wake of the activation of a highly-anticipated form of cryptography named “bulletproofs” on the privacy-centric cryptocurrency Thursday.
Bitcoin’s White Paper Gave Us Liberty – Let’s Not Give It Back
Charlie Shrem – Coindesk
Ten years after Satoshi published the white paper that gave us bitcoin – and the explosion of innovation it launched – I continue to be astounded at its transformative power.
Hedge fund billionaire Ken Griffin gives $6M to top state Republican leaders
Mike Riopell – Chicago Tribune
Hedge fund founder and Illinois’ richest person, Ken Griffin, gave $6 million to the state’s Republican legislative leaders as they fight for seats in Springfield, campaign records showed.
Mnuchin dismisses risk of contagion from China’s economic slowdown
Lesley Wroughton – Reuters
U.S. Treasury Secretary Steven Mnuchin dismissed concerns that China’s weakest economic growth since the global financial crisis could spill into other emerging markets and destabilize U.S. financial markets.
“Nobody Loves Daddy Warbucks”: Michael Bloomberg’s Cash-Bombs Will Elect Democrats in 2018 – But Will They Help Him In 2020?
Chris Smith – Vanity Fair
For months the polling has shown basically a dead heat between California Republican Congressman Steve Knight and Democratic challenger Katie Hill. Third-party spending in the race has been pretty even, too.
Trump Hasn’t Killed Foreign Investment in China; Cutting off Chinese supply chains’ oxygen without Europe and Asia on board will be difficult
Nathaniel Taplin – WSJ
China isóallegedlyóa large-scale pilferer of intellectual property, runs roughshod over foreign companies’ rights and is bracing for a drawn-out trade war with the U.S.
Mnuchin’s $100 Billion Market Gets Boost With Rules on Tax Break
Laura Davison and Noah Buhayar – Bloomberg
IRS proposal provides flexibility on opportunity zone projects; More detailed regulations for funds expected later this year=
The Internal Revenue Service unveiled proposed regulations Friday for what Treasury Secretary Steven Mnuchin says could be a $100 billion investment opportunity for real estate and businesses in distressed areas.
U.S. Charges Russian for Conspiracy to Interfere in 2016 and 2018 Elections
Chris Strohm and Greg Farrell – Bloomberg
Accusations are first related to impending midterm vote
Operation had a proposed budget of $35 million, U.S. alleges; U.S. Charges Russian for Conspiracy to Interfere in Elections
The U.S. charged a Russian woman with conspiring to interfere in both the 2016 and 2018 elections, marking the first criminal charges related to next month’s congressional midterm vote.
Trump Resists Saudi-Crisis Pressure, Citing $450 Billion at Risk
Justin Sink – Bloomberg
Sanctions against kingdom “could be considered” Trump says; Saudis have promised to explain Khashoggi’s fate in days
President Donald Trump said $450 billion in investments are at stake as Congress raises pressure on him to punish Saudi Arabia for the presumed death of journalist Jamal Khashoggi, and he promised to involve lawmakers in any U.S. response.
SEC investigates Honeywell for asbestos-related accounting
Honeywell International Inc (HON.N) said on Friday the U.S. Securities and Exchange Commission had opened an investigation into its accounting for asbestos-related liabilities.
Sef reforms could distort new, sounder benchmark rates; Tradition’s Fitzpatrick warns that more ways of trading swaps could dent progress made on fixings
Robert Mackenzie Smith – Risk.net
The head of Tradition’s swap execution facility (Sef) has warned regulators that any new proposals on the way interest rate derivatives trade might slant the setting of important financial benchmarks.
Ticked Off About Spoofing? Consider This
Craig Pirrong – Streetwise Professor
An email from a legal academic in response to yesterday’s post spurred a few additional thoughts re spoofing. One of my theories of spoofing is that is a way to improve one’s position in the queue at the best bid or offer. Why does one stand in a queue? Why does one want to be closer to the front? Simple: because there is a rent there to capture. Where does the rent come from? When what you are queuing for is underpriced, likely due to some price control. Think of gas lines, or queues for sausage in the USSR.
Esma slammed as whistleblowing hotline runs cold; Five cases in nearly two years ‘speaks for itself’, says MEP Sven Giegold, as scrutiny of whistleblowing procedures rises
David Ricketts – Financial News
Europe’s main securities regulator has fielded just five claims from whistleblowers since it set up a dedicated hotline nearly two years ago, prompting calls from a prominent German MEP for the system to be overhauled.
Stamford hedge fund co-founder charged with defrauding investors of $19.6M
Kevin Zimmerman – Westfaironline.com
Jason Rhodes, co-founder of Stamford hedge fund Sentinel Growth Fund Management, was arrested on Oct. 16 on conspiracy, securities fraud, wire fraud and investment adviser fraud charges.
CFTC to Hold an Open Commission Meeting on November 5
Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo announced today that the CFTC will hold an open meeting on Monday, November 5, 2018 at 10:00 a.m. to consider the following:
Ex-UBS compliance officer to begin trial for insider trading; Prolific day trader also to face jury on charges he used inside information
Caroline Binham in London – FT
A former compliance officer at UBS, Fabiana Abdel-Malek, will stand trial this week in London on 10 counts of insider trading.
Former South Australia grain trader pleads guilty
Mr Brenton Jeffrey Strauss of Murray Bridge, South Australia has pleaded guilty to acting as an officer of a company while it was under external administration.
UPDATE: FINRA’s Cloud Strategy Shone amid Recent Volatility
Steve Randich – FINRA
UPDATE 10/19/2018: During the week of Oct. 8, 2018, exceptional market volatility again produced record numbers of electronic messages processed by FINRA, including the three highest-volume days in history:
Investing and Trading
How To Invest Your $1.6 Billion Mega Millions Winnings
Garth Friesen – Forbes
One in 300 million. The odds aren’t great, but your chances of winning the massive Mega Millions lottery are as good as the next person. The current jackpot is estimated to be more than $1.6 billion. That is 1,600 million for those who are used to seeing smaller prizes. According to the USA Mega lottery website, the lucky winner will take home approximately $687 million after taxes if he or she opts for the cash option — life-changing wealth by any standard. It’s fun just dreaming how would you spend or invest the money if you won. The opportunities would be endless. Well, almost.
Carsten Jung, Theresa Lober, Anina Thiel and Thomas Viegas – Bank Underground Blog
Governments have pledged to meet the Paris Target of restricting global temperature rises to ‘well below’ 2∞C. But reducing CO2 emissions and other greenhouse gases means reallocating resources away from high-carbon towards low-carbon activities. That reallocation could be considerable: fossil fuels account for more than 10% of world trade and around 10% of global investment. In this post, we consider the macroeconomic effects of the transition to a low-carbon economy and how it might vary across countries. While much of the discussion has focussed on the hit to economic activity and the potential for job losses in higher-carbon sectors, we highlight that the transition also offers opportunities. And the overall impact depends crucially on when and how the transition takes place.
Are financial literacy programs a waste of time?
Allison Schrager – Quartz
Ten years ago, I volunteered to teach financial literacy skills to a group of homeless women. All of us volunteers, mostly working in finance, came in excited to teach the women about the wonders of compound interest and the benefits of saving. Our knowledge was totally useless to them. The women led complex financial lives, mostly negotiating intricate rules and charges they faced from government benefits. They could understand why compound interest was great, but long-term saving was not a priorityóor even possibleófor them.
Why aren’t most Americans rich? These theories may help explain it; A recent social-media hashtag, #ReasonsImNotRich, attempted to answer that complex question
Elisabeth Buchwald – MarketWatch
What does it take to become wealthy? Most Americans believe it takes $2.4 million in personal net worth, or nearly 30 times the actual median net worth of U.S. households to be considered wealthy, according to The Modern Wealth Index, a May 2018 study by Charles Schwab and Koski Research, a market research company in San Francisco.
The Student Loan Debt Crisis Is About to Get Worse; The next generation of graduates will include more borrowers who may never be able to repay.
Riley Griffin – Bloomberg
While Wall Street and U.S. President Donald Trump tout news of a booming stock market and low unemployment, college students may be quick to roll their eyes. The improved economy has yet to mean higher wages for graduates already struggling to pay down massive debt, let alone ease the minds of students staring down the barrel of six-digit loan obligations yet to come.
The Stock Market Has a Profit Problem
Elena Popina – Bloomberg
Industrials stocks are heading for the worst month since 2012; Higher rates and labor costs, trade war woes crimp margins
Package maker Sealed Air Corp. fell the most in six months Thursday after saying higher raw material costs would crimp the bottom line. A few days earlier it was rising freight outlays at Fastenal Co., where $1.1 billion of market value was erased. On Oct. 9, paint maker PPG Industries Inc. mentioned rising expenses. The shares cratered.
Investors dump listed asset managers as sentiment sours; Shrivelling inflows and falling profit margins put sector under intense pressure
Attracta Mooney and Chris Flood – FT
The outlook for the asset management industry is the worst it has been since the financial crisis as the share prices of listed fund houses plummet, profits come under pressure and fears rise that some big investment companies will be wiped out.
Halliburton notes slowdown in North American oil and gas business
Ed Crooks – FT
Halliburton, one of the world’s largest oilfield services groups, has reported a slowdown in its North American oil and gas operations, reflecting wider difficulties that have emerged in the industry this year.
JPMorgan to build Silicon Valley fintech office
David Henry – Reuters
JPMorgan Chase & Co (JPM.N) said on Friday that it was building a new “fintech campus” in Silicon Valley for more than 1,000 employees, as it pushes to keep abreast of changes in digital payments.
Goldman Sachs changes Asia investment banking leadership: memo
Sumeet Chatterjee – Reuters
Goldman Sachs Group Inc (GS.N) has named veteran banker Todd Leland as its investment banking head for Asia Pacific excluding Japan, according to an internal memo seen by Reuters, adding to leadership changes at the bank with CEO David Solomon taking over this month.
Standard Chartered plans job cuts as shareholder gloom deepens; Investors become frustrated over bank’s turnround strategy
David Crow and Stephen Morris – FT
Standard Chartered is preparing a fresh round of job cuts to reduce costs in response to rising pressure from investors who are frustrated over the emerging market bank’s flagging performance.
\Vanguard to set up ETF research centre in London; Asset manager aims to boost adoption of exchange traded funds outside the US
Chris Flood – FT
Vanguard will establish a London research centre focused on exchange traded funds as part of a push by the world’s second-largest asset manager to boost the adoption of the investment products outside the US.
Italy vows to stay in euro but stick with spending plan; European Commission had accused coalition government of breaching budgetary rules
Miles Johnson in Rome – FT
The leaders of Italy’s populist coalition government said they had no intention of leaving the euro but will stick with spending plans that have triggered both a credit rating downgrade and sharp criticism from Brussels.
State of the nation: What the China opportunity looks like now
Sandrine Soubeyran – FTSE Russell Blog
Since the introduction of economic reforms some 40 years ago, China’s economy has transformed into a formidable driver of global growth. As the country continues to open its equity market to international investors, they will find a market with a broader set of industries. And alsoóperhaps surprisingly to someóthey will see an increase in focus on the green economy.
Fentanyl smuggled from China is killing thousands of Americans
Del Quentin Wilber – LA Times
The Zheng drug trafficking organization was hardly clandestine. The Shanghai-based network sold synthetic narcotics, including deadly fentanyl, on websites posted in 35 languages, from Arabic and English to Icelandic and Uzbek.
The $600 billion reason why China’s stock market crash might get a whole lot worse
Will Martin – Business Insider
Perhaps the biggest financial market story in 2018 so far is the colossal fall from grace of the Chinese stock market, which has witnessed losses in excess of 30% since the start of the year.
MUFG says bank’s CEO will not attend Saudi conference
The CEO of Mitsubishi UFJ Financial Group’s banking arm will not attend the Future Investment Initiative conference in Saudi Arabia, the group said on Sunday, joining a growing list of business executives to withdraw over concern about the death of journalist Jamal Khashoggi.
Saudis have ‘no intention’ of using oil as leverage in Khashoggi case; Energy minister says crude production is ‘isolated’ from politics
David Sheppard in London – FT
Saudi Arabia’s energy minister said the country is likely to raise oil production close to 11m barrels a day, signalling it has “no intention” of using its status as the world’s largest crude exporter to respond to the international political pressure it faces over the death of journalist Jamal Khashoggi.
London marchers call for new Brexit vote; Organisers say protest is biggest yet in support of a rethink on leaving EU
Robert Wright in London – FT
Hundreds of thousands of people marched through central London on Saturday to demand a new referendum on the UK’s membership of the EU, in the biggest demonstration so far in support for a rethink of the historic 2016 vote.
Bordeaux Heading for `Great’ Vintage After Unusually Dry Summer
Guy Collins – Bloomberg
Harvest conditions in September were exceptionally favorable; Wet weather in the spring gave some growers issues with mildew
Bordeaux wine-makers are heading for a “great” vintage this year after an unusually warm growing season and exceptionally dry summer and harvest, according to Olivier Bernard, whose family owns Domaine de Chevalier in Pessac-Leognan south of the city.
Yann Couellan: The path of the curious; Curiosity is the key to survival in the world of FICC (Fixed Income, Currency and Commodities) trading, and Yann Couellan, head of FICC trading at BNP Paribas Asset Management, knows this better than most. Couellan speaks to David Whitehouse about his career so far and what still excites him about the future.
By David Whitehouse – The Trade
Yann Couellan’s day starts early. He sets off from his home in a village near Versailles to the south of Paris at around 6.30 am, arriving between 7 and 7.30 at the headquarters of BNP Paribas Asset Management, on rue BergËre, near the Grands Boulevards metro station.