Observations & Insight


Simon Puleston Jones, CEO of FIA Europe – In Pursuit of Happiness

JohnLothianNews.com

“Try to find someone who does things right that you really aspire to be over the course of your career.”

Simon Puleston Jones, CEO of FIA Europe, gives advice for balancing personal life with career life. Jones begins his presentation with an acronym for “DREAM”, discussing how happiness and achieving your goals is related to Diligence and drive, Relationships and recruitment, Education and ethics, Adjustments and appreciation, and Mistakes and mentors. He stresses that your career should be something you truly enjoying waking up for and how some perks such as fancy cars and large boats can be outweighed by having a family and raising children. Jones shows that happiness is not about materialistic possessions, but rather the relationships you build with others and the experiences you have throughout your life.

Watch the video »

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Kilting for Quid; Kilting for Kids
Doug Ashburn – JLN

You may be asking why we are rerunning the above video from last fall’s MarketsWiki Education event in London. The answer is twofold. First, Simon Puleston-Jones delivered one of the best talks we ever had the pleasure of publishing, and one well worth repeating. Second, we want to give a glimpse of the guy who will be donning a kilt at this year’s IDX Gala Kilt Challenge.

You may recall that at last year’s IDX dinner, FIA CEO Walt Lukken put on the kilt for Futures for Kids, and helped the organization reach a milestone – GBP2 million raised for the charity since its inception. He then passed the magic sporran to Mr. Puleston-Jones, who on June 10, 2015, will take his place among such illustrious Kilt Challenge alumni as Clive Furness, Simon Rostron, Jeremy Grant and, of course, our own John Lothian, who did the honor in 2011.

Though Simon has just passed the halfway point in his quest to raise GBP5,000 by the 10th, there is still a long way to go. And consider the sacrifice:

“My Welsh ancestors may well turn in their grave to see a son of Wales wearing a Scottish kilt,” says Puleston-Jones, “but it’s well worth their ire as I strive to reach the goal.”

Regular readers of the John Lothian Newsletter know how much FFK does for a host of children’s charities across the globe including, most recently for the victims of the Nepal earthquake. Please check out the FFK site, and give generously, in the hope that today’s children may participate in the DREAM that Simon Puleston-Jones speaks about so eloquently in his video.

Click here to learn more about Futures for Kids

Click here to donate via Simon’s JustGiving page

Lead Stories

OCC Comments on S&P Reaffirmation of AA+/Stable Rating
Press Release – OCC
OCC, the world’s largest equity derivatives clearing organization, today commented on the reaffirmation of its AA+/Stable rating by Standard & Poor’s.
“We’re pleased with the reaffirmation of our AA+/Stable rating by Standard & Poor’s. The report reflects the outstanding work by the management and employees of OCC to strengthen the resiliency, risk management and capitalization of our company,” said Craig Donohue, Executive Chairman. “As a SIFMU, we understand the importance of continued vigilance and internal oversight in order to strengthen our role as the foundation for secure markets.”
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**JK – To see a nice summary of changes at OCC, see our recent interview “Clearing Evolution: Michael McClain on the changes at OCC” at http://jlne.ws/1EQdd2l

U.S. Stocks Fall as Better Data, Fed Remarks Boost Rate Bets
Jennifer Kaplan – Bloomberg
U.S. stocks fell the most in three weeks, as better-than-forecast economic data and comments by Federal Reserve officials bolstered bets for an interest-rate increase this year.
Energy and raw-material companies retreated as the dollar jumped, while Apple Inc. and Intel Corp. paced a drop in technology shares. Hewlett-Packard Co. decreased 3.5 percent. Time Warner Cable Inc. added 4.9 percent after Charter Communications Inc. agreed to buy the cable provider for about $55 billion in cash and stock. Cablevision Systems Corp. climbed 2 percent.
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China to launch first stock index options soon: state media
Reuters
The China Financial Futures Exchange (CFFEX) will soon launch the country’s first-ever stock index options, state media reported on Monday, giving investors more hedging tools as the government steps up financial market reforms.
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***DA: Please hurry. Lots of price action these days. (And see “As LME looks east, CME throws down challenge in west” below)

For S&P 500, Expensive Is New Cheap as Bull Market Plods On
Joseph Ciolli – Bloomberg
Rarely has it cost so much to purchase low-priced stocks.
With oil’s rebound helping U.S. energy producers recover from a 27 percent plunge, the least-expensive industry in the Standard & Poor’s 500 Index just became banks, where the median company trades at 17.6 times earnings from the past 12 months. That’s no bargain: only once has the cheapest sector commanded a higher valuation, a quarter century of data compiled by Bloomberg and Leuthold Group show.
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***DA: But it’s different this time. Right? Right?

Heavy Economic Lineup Could Deliver Stock Market’s Breakout
JJ Kinahan – Forbes
It was more whimper than roar, but the S&P 500 (SPX) ground to another record high last week. This achievement was scored within whisker-thin trading ranges as select measures of broader-market volatility probed 2015 lows. Now, economic data comes into focus in this holiday-shortened week and in the week following, which features the typically closely watched monthly jobs report.
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**JK – One trading day later and we’re seeing the Dow down 228 points at 1:10 p.m. and the VIX price up around 20 percent to 14.47.

Bullish Levels Getting Entrenched – Weekly Market Outlook
Price Headley – CBOE Options Hub
It wasn’t a pretty or a convincing bullish move, but stocks did make forward progress last week, putting some distance between them and a huge hurdle that had otherwise been holding it back since February. Still, no later than it cleared that ceiling another possible one developed.
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Volatility On The Rise But Trading Ranges Grow Tighter
Urban Carmel – Investing.com
The S&P index is making new highs. The trend is higher. But in the process, the trading range has become very tight. In the past, this has been followed by higher volatility and limited, near-term upside for equities.
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Why Traders Are Most Bullish When Markets Are Closed
Adam Warner – Schaeffer’s Investment Research
StockTwits did a little data mining the other day to answer the question of when investors were most bullish, both in time of day and day of week. Intuitively, I would have guessed it’s mostly random. There’s no particular day-of-week or time-of-day biases in the actual market. If we had biases, they’d get gamed away in nanoseconds. The algo-bots would buy stocks at 10:57 every day, or whatever, until the blips smoothed out.
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**JK – I am always way more bullish when I have nothing to lose.

HFT is not the problem—commentary
Jack Bouroudjian, CEO of Index Futures Group – CNBC
Recently a Luddite mentality has worked its way into the debates centered around high-frequency trading and the effect it might, or might not have, on the overall market. The latest comments from Federal Reserve Chair Janet Yellen only enforces the notion that the HFT community has, somehow, rigged the markets.
Let’s understand something right away: Not all HFT is the same. There needs to be a basic understanding of the strategies which now make up an estimated 50 to 75 percent of overall exchange volume. It becomes painfully obvious to those of us who are veterans of the industry that there is a basic misunderstanding of what HFT is and how it contributes to the market.
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**JK – While such articles are essential in the education front on HFT, the word “rigged” is an easy one to remember. Michael Lewis used it early and often.

Exchanges

As LME looks east, CME throws down challenge in west
Andy Home – Gulf Times
The London Metal Exchange (LME) Asia festivities have just wrapped up in Hong Kong. It is the third such annual event since the LME was bought by Hong Kong Exchanges and Clearing (HKEx) in 2012 and each year, it seems, the Asian gathering of the metals industry gets larger.
The grand old London lady of metals trading is all part of Charles Li’s vision of positioning Hong Kong as the renminbi gateway between mainland China and international markets. The HKEx chief is confident the LME will help open up a commodities channel to complement the newly-opened Stock-Connect highway.
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Strategy

Boomers, It’s Time to Cash Out of This Bubble
Anthony Mirhaydari – The Fiscal Times
Equities seem unshakeable.
It’s been nearly four years since the S&P 500 has suffered a 10 percent correction — the third longest run since 1960. Investors are complacent, with Deutsche Bank Chief U.S. Equity Strategist David Bianco (one of Wall Street’s most bearish forecasters for much of 2014) now estimating we’re moving into mania territory last seen in late 2007 and early 2008, based on the ratio of the price-to-earnings multiple and the CBOE Volatility Index. Valuations are high, with the Shiller cyclically adjusted price-to-earnings ratio at levels that were only seen during the 1929 and 2000 market bubbles.
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