The John Lothian Daily Update is a podcast turning the daily JLN hits and takes comments, our original content and the stories and quips in the top box of First Read into a daily podcast.
Hits & Takes
CME Group and FTSE Russell are putting on a webinar TODAY at 11 a.m. ET titled, “Russell U.S. recon: Mitigating risk with derivatives.” If you are invested in small cap stocks, you will want to know more about the annual Russell Reconstitution and the changes that are captured during this process, including shifts in market capitalization, sector composition, company rankings, and style orientation. During the reconstitution, how can you mitigate your exposure risk? Find out from experts from FTSE Russell, Cboe Global Markets and the CME Group. They include:
Kevin Davitt, senior instructor, Cboe Options Institute; Giovanni Vicioso, senior director, equity products, CME Group; Mark Barnes, PhD, head of investment research, Americas, FTSE Russell; and the moderator, Catherine Yoshimoto, director, product management, FTSE Russell.
Speaking of the Russell 2000, it was recently the focus of an episode of Anthony Crudele’s Futures Radio podcast. Sean Smith from FTSE Russell, Rick Rosenthal from CBOE and Russell Rhoads from EQ Derivatives spoke about the Russell 2000 futures and options products with the impeccably coiffed Crudele. — YouTube
In the Bad News section (isn’t that every section some days?), we have the story from the Wall Street Journal, “Covid-19 Deaths This Year Have Already Eclipsed 2020’s Toll; As wealthy nations vaccinate, growing death tally underscores worsening divide between rich and poor countries.” This is a grim reminder we are still in this pandemic and NOT all in this together. We all need to be vaccinated. — WSJ
In the Miscellaneous section of JLN at the bottom of the newsletter we have some hedge fund related real estate news that involves New York and Palm Beach, but does not involve Citadel’s Ken Griffin. It does involve the Cleveland Indians and New York Mets baseball teams though. The Mets’ new owner Steve Cohen finally dumped sold his New York City condo for more than he asked, but only after dropping his asking price from $113 million in 2013 to $29.5 million in February of this year. Also, WorldQuant hedge fund manager Igor Tulchinsky bought the North Palm Beach mansion of Jeffrey Jacobs, scion of the Cleveland real-estate family that formerly owned the Cleveland Indians. Mr. Tulchinsky paid $39.5 million for the Florida residence less than two months after dropping another $33 million on an apartment in Manhattan.
Lake Mead, the largest reservoir of water, the one at the iconic Hoover Dam in the U.S., fell to levels not seen since 1937. Bloomberg reported that three-fourths of the American West is in drought conditions, so this is not good news. — Bloomberg
The New York Times has an article titled, “How to Reopen Offices Safely; Flush the taps, focus on indoor air quality and consider getting creative about staff schedules.” This is probably a timely story to read this week as many offices are reopening. — NY Times
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Chuck Mackie has a follow-up column at Medium, “Three takeaways — and final thoughts” from the final day of #cryptoconnection2021 from Tabb Forum and Global DCA, including: Sponsors in the spotlight, a search for the “white whale” of crypto markets and a look at some of the bizarro world that can be crypto. You can read it here.~SR
Locally grown: Chicago-based Small Exchange announced yesterday that it plans to list Small Cannabis futures, a product that will offer access to 21 related stocks, on June 21. Details on Small Cannabis S420 futures are available here. ~SC
G7 leaders to pledge 1bn Covid-19 vaccine doses for poorer countries; Initiative to be unveiled at Cornwall summit to address criticism wealthy nations have taken bulk of supplies
George Parker and Jasmine Cameron-Chileshe – FT
Leaders of the G7 economies convening in the UK will announce a pledge to provide 1bn coronavirus vaccine doses to poorer countries as part of a plan to “vaccinate the world” by the end of 2022.
*****We are all in this together. We must all get out of it together.~JJL
How the FBI Got Colonial Pipeline’s Ransom Money Back; Seizure of more than half of the company’s payment cuts against crypto’s reputation as an untraceable financial medium for hackers
David Uberti – WSJ
After Colonial Pipeline Co. on May 8 paid roughly $4.4 million in cryptocurrency to hackers holding its computer systems hostage, the Federal Bureau of Investigation followed the digital money. Over the next 19 days, court records show, a special agent watched on a publicly visible bitcoin ledger as hackers transferred the 75 bitcoins to other digital addresses. A May 27 transfer of nearly 64 bitcoins landed at a virtual address to which the FBI gained access, providing an opportunity to get a warrant and pounce.
***** Good old fashioned police work, that is how.~JJL
First Crypto and Cannabis. Now Psychedelics
Swetha Gopinath – Bloomberg
Clarify Pharma raised $2.3 million on the Aquis Stock Exchange; IPO is fourth for Jonathan Bixby, Mike Edwards in eight months
Jonathan Bixby and Mike Edwards, the duo that’s taken public companies involved in cryptocurrencies, e-sports and cannabis, are back with a fourth London listing in eight months. This time, it’s psychedelics. Clarify Pharma invests in biotech and life-sciences companies seeking to prove the safety and efficacy of psychedelic-based substances. It raised 1.96 million pounds ($2.3 million) on the Aquis Stock Exchange, a small U.K. bourse. The stock opened at 2.77 pence, up 11% from the 2.50 pence listing price.
******* Take a deep breath and consider this. Now let it out.~JJL
What Is Payment for Order Flow? Behind the Trading Controversy at Robinhood and Other Brokers.
Bill Alpert – Barron’s
With meme stocks once more riding a wave of retail trader enthusiasm, regulators are scrutinizing payment for order flow—the controversial payments that brokerages like Robinhood receive for routing trades to third-party trading firms, instead of stock exchanges. Order-flow payments subsidize the commission-free trading that’s become the norm with U.S. retail brokers, but they are banned in markets like Canada and the U.K. Why? The concern is that the payments discourage brokers from obtaining the best trades for their customers—violating the broker’s duty to get a customer the “best execution” on a buy or sell order.
***** The best execution is the one that pays the broker the most while also giving the appearance of getting the customer a regulatorily required good fill.~JJL
Thursday’s Top Three
Our top story Thursday was the Financial Times’ Gensler says SEC to review payment for order flow. Second was Marex cancels London listing, also from the Financial Times. Third was, for the fifth or sixth time in the top three, A former head of macro strategy at legendary investment firm Citadel lays out the 5 key qualities he believes makes a great trader — and provides a rare outlook on the future of hedge funds, from Business Insider.