The ‘Roaring Kitty’ Rally: How a Reddit User and His Friends Roiled the Markets

Jan 29, 2021

First Read

$27,651/$300,000 (9.2%)


++++

Hits & Takes
John Lothian & JLN Staff

Bubbles. Pump and dumps. Good guys. Bad guys. Good guys being bad. Bad guys trying to do good. Lots of people making money. Some people making lots of money. Lots of people losing money. Some people losing lots of money. Regulators alarmed. Politicians alarmed. Strange bedfellows agreeing. Clearing firms calling for more capital. Problems because of T+2. Strange comments from everywhere. Trying to blame the other guy. Jon Stewart joining Twitter just to comment. All this and more in today’s newsletter.

I interviewed Tom Price of The Price Group yesterday. I learned that he studied pre-med and finance and was accepted to medical school but decided to pursue finance instead. I heard the story about the president of the CME offering him 10 memberships at a good price that he turned down because he was concerned about the annual fees. He said it was the worst trade he never made. I also learned the CME was trying to sell the memberships because they had an agreement to buy the memberships back from members who went off to serve in the Vietnam War, and those were some of the memberships they were offering Tom. Lots of industry history in this interview. Stay tuned. Thank you to Tom and his wife Nancy for this hospitality yesterday.

Just after I left Greenville, SC yesterday I received a call from my swag vendor, the one who provides us with the nice drawstring bags for the MarketsWiki Education events. He is located in Greenville, SC, which I had forgotten. I am going to write a story about him and his business, as there are some interesting things going on in the swag business in light of the pandemic and lack of in person events.

I stopped in Louisville, KY today on my way back to Chicago. The Louisville Slugger Museum is on the schedule before we leave.

There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support industry history by donating 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

*****

While it’s still very early in 2021, index provider FTSE Russell said Thursday that a comparison of its Asia and emerging market indexes shows that those that include ESG criteria are beginning to outperform their parent indexes year to date (as of January 25). The FTSE Emerging Asia-ESG Index, for example, has returned nearly 13 percent, versus 11.3 percent for its parent non-ESG index. To see a chart that illustrates recent performance, click here. FTSE Russell partnered with the Singapore Exchange Limited for SGX’s launch on Monday of index futures based on FTSE Russell ESG benchmarks. ~SC

The SEC released a statement today from Acting Chair Lee and Commissioners Peirce, Roisman, and Crenshaw about the “recent market volatility,” which begins: “The Commission is closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days. Our core market infrastructure has proven resilient under the weight of this week’s extraordinary trading volumes. Nevertheless, extreme stock price volatility has the potential to expose investors to rapid and severe losses and undermine market confidence.”~SR

Jon Stewart, former host of “The Daily Show,” joined Twitter (for the first time) yesterday to weigh in on the GameStop/Reddit story. He said, in part, “The Redditors aren’t cheating, they’re joining a party Wall Street insiders have been enjoying for years.”~JB

++++

Sponsored Content
【Special Report】 First year anniversary workshop of TOCOM/JPX Electricity Futures

Asia’s Most Successful Electricity Futures at Tokyo Commodity Exchange (TOCOM)/Japan Exchange Group (JPX) celebrated its first year of listing in a co-hosted webinar with Quick Corp. on December 15, 2020. The event was attended by over 250 people from 152 companies.

At the workshop, Mr. Hatakeyama, Director-General for Commerce and Service Industry Policy of METI gave an opening remarks and Mr. Ishibashi of Astmax Trading, Inc. gave a keynote speech on Electricity trading and Risk management. In the panel discussion, traders from different power companies shared their experiences in using TOCOM Electricity Futures and their internal risk control systems. They pointed out that there is still a huge opportunity in Electricity Futures market in Japan and requested the exchange to list new products such as those covering the Hokkaido and Kyushu areas and change the product design to extend contract months.

For more details, please refer to the following link
https://www.tocom.or.jp/uploads/en_news/2021/report_E.pdf

++++

LSEG completes $27 billion Refinitiv acquisition; After confirming earlier this month the deal would complete on 29 January, LSEG has completed its blockbuster acquisition of Refinitiv.
Annabel Smith – The Trade
The London Stock Exchange Group (LSEG) has completed its transformational acquisition of data and analytics giant Refinitiv for $27 billion. LSEG has been working towards closing the deal for almost a year and a half, after confirming plans to acquire Refinitiv in August 2019.
/bit.ly/3oxS3kO

*****No GameStop for LSEG. It is now GAME ON!~JJL

++++

Robinhood and Reddit top the App Store following GameStop mania
Jordan Bevan – Mobile Marketing Reads
Stock trading & investing app Robinhood and social networking platform Reddit rise to the top on the App Store charts following the GameStop mania and Google deletes 100,000 negative Robinhood reviews.
/bit.ly/3qWg3jc

*****No surprise here.~JJL

++++

San Antonio 10-year-old cashes in on GameStop stocks he was gifted 2 years ago
Madalyn Mendoza – Houston Chronicle
When Jaydyn Carr unwrapped his GameStop shares his mom gifted him for Kwanzaa two years ago, neither mother nor son expected he’d eventually be in the middle of a stock surge.
Stock talks this week are centering on small investors, but Jaydyn might be the smallest and youngest, at least in San Antonio. He became a GameStock shareholder on Dec. 30, 2019, when he was eight, long before Reddit users combined and skyrocketed the prices of the struggling gaming company’s shares from single to triple digits, blindsiding Wall Street. The now 10-year-old fifth grader is reeling from the excitement of selling his first set of stocks amid the GameStop trading frenzy.
/bit.ly/2Ytx2wY

***** My father always said it was better to be lucky than smart.~JJL

++++

NYC protesters slam Robinhood, scream at Wall Street traders amid GameStop stock chaos
Elizabeth Rosner and Tamar Lapin – NY Post
A few dozen people gathered at the New York Stock Exchange on Thursday to protest investing app Robinhood and badger Wall Street traders amid the ongoing GameStop stock chaos. Several of the protesters were spotted tailing people leaving the building, yelling “Shame!” and “Eat the rich.”
/bit.ly/3ppArZL

*****If you eat the rich, I suggest Grey Poupon.~JJL

++++

Thursday’s Top Three
Thursday was another all GameStop, all the time day. Our top story was The New York Times’ ‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game. Second was Bloomberg’s Reddit Crowd Bludgeons Melvin Capital in Warning to Industry. Third was the Wall Street Journal’s WallStreetBets Founder Reckons With Legacy Amid Stock-Market Frenzy, about Jaime Rogozinski.

++++

CryptoMarketsWiki Coin of the Week: Dogecoin (DOGE)
GameStop stock wasn’t the only asset driven up in value this week by the coordinated efforts of retail investors. Dogecoin, a cryptocurrency created as a joke, surged this week as users on the Reddit thread “SatoshiStreetBets” enthusiastically agreed to buy the cryptocurrency to drive its price up. It jumped over 500 percent since Wednesday, boosted when Elon Musk tweeted about it. This pushed DOGE into the top 10 biggest cryptocurrencies in the world by market cap. Users on Reddit joked that Dogecoin is “the first dog on the moon.”
bit.ly/2pQTKBr

++++

MarketsWiki Stats
198,797,582 pages viewed; 25,217 pages; 229,722 edits
MarketsWiki Statistics

++++

CryptoMarketsWiki Website»
CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages

Recently updated pages include
TZERO
BSTX
Ethereum (ETH)
Ethereum Foundation

CryptoMarketsWiki Stats

1,487 pages; 13,500 edits
CryptoMarketsWiki Statistics

Lead Stories

The ‘Roaring Kitty’ Rally: How a Reddit User and His Friends Roiled the Markets; A Massachusetts man who goes by “Roaring Kitty” on social media helped fuel the frenzy around GameStop. His $53,000 investment in the company briefly reached $48 million in value.
Nathaniel Popper and Kellen Browning – NY Times
In mid-2019, a Reddit user — known as “Roaring Kitty” on some social media accounts — posted a picture on an online forum depicting a single $53,000 investment in the video-game retailer GameStop. The post attracted little attention, except from a few people who mocked the bet on the struggling company. “This dude should sell now,” a Reddit user named cmcewen wrote at the time.
/nyti.ms/3ou9R0c

Anger as brokers curb retail investors’ bets on GameStop; Robinhood says limited trading to resume on Friday after rebukes from users and politicians
Madison Darbyshire and Philip Stafford – FT
Online brokers clamped down on retail investors’ bets on several highly popular but volatile stocks on Thursday, locking traders out of the market and drawing sharp criticism from some users and politicians. Large US brokers, including Schwab and Robinhood, curbed trading in shares including the video game retailer GameStop, cinema chain AMC and tech pioneer BlackBerry, sending them all sharply lower. GameStop was down 44 per cent, for example, and AMC closed down 57 per cent.
/on.ft.com/3cu9G2u

r/WallStreetBets throws down challenge to regulators; What is fairer: making certain speculation illegal, or letting some speculators get crushed?
Robert Armstrong – FT
The simplest and most common form of stock fraud is the “pump and dump.” It has three parts. Someone gets hold of some cheap shares; tells lies about why they are going to rise; and when they do, sells them, before the lies are discovered and the shares fall. This is against the law.
/on.ft.com/3cnclek

Will the Real Robin Hood Please Stand Up?; Charity backed by hedge-fund honchos lambasted by Reddit crowd
Spencer Jakab – WSJ
The mythical Robin Hood stole from the rich and gave to the poor. It was no accident that the brokerage firm that finds itself in the news lately chose that name, even if its novice customers often unwittingly did the opposite until this week when they rocked the hedge-fund world.
/on.wsj.com/2YtnSkl

GameStop Frenzy Causes Glitches for High-Speed Traders; Brokers were unable to route investors’ orders to Susquehanna and Wolverine
Alexander Osipovich and Gunjan Banerji – WSJ
High-speed trading firms that execute orders for individual investors faced technical hiccups this week because of exploding volume in GameStop Corp. GME -44.29% , AMC Entertainment Holdings Inc. AMC -56.63% and other popular stocks. Brokers that route investors’ orders to Susquehanna International Group LLP and Wolverine Trading LLC had difficulty connecting to the firms on Wednesday and routed their trades elsewhere, people familiar with the matter said.
/on.wsj.com/3r295sX

Robinhood Raises $1 Billion in Dash for Cash After Trader Revolt
Annie Massa, Misyrlena Egkolfopoulou, Michelle F Davis, and Matthew Monks – Bloomberg
DTCC asked brokerages for $33.5 billion in collateral Thursday; Robinhood taps its existing investors and bank credit lines
New York markets had just fired up, and the investing world was tuning in for Thursday’s episode of the continuing drama: Legions of Robinhood Markets investors versus hedge-fund Goliaths. But within minutes, a shock wave invisible to the outside world rattled the mechanics of Wall Street — sending Robinhood rushing for more than $1 billion of additional cash. The stock market’s central clearing hub had demanded large sums of collateral from brokerages including Robinhood that for weeks had facilitated spectacular jumps in shares such as GameStop Corp.
/bloom.bg/3r2NP6x

Robinhood Users Suing Over Trade Limits Face High Legal Bar
Chris Dolmetsch, Christopher Yasiejko, and Christian Berthelsen – Bloomberg
Experts say brokerages get wide power to restrict transactions; Suits claim losses from blocked access amid share-surge frenzy
Frustrated investors who sued after getting locked out of trading in frenzied shares like GameStop Corp. aren’t likely to have much luck in court either. Online brokerage Robinhood Markets was named as a defendant Thursday in several federal suits demanding it reinstate trading of shares including GameStop, BlackBerry Ltd., Nokia Oyj and AMC Entertainment Holdings Inc. Just hours earlier, Robinhood, Interactive Brokers and others took steps to curtail activity in the high-flying stocks after several dizzying days of trading on their platforms whipped up volatility.
/bloom.bg/2M6ZqTr

The battle ahead: war is coming for your money; Investors underestimate the pandemic-induced risk of conflict and imposition of capital controls
John Dizard – FT
War risk is consistently underestimated by money people. Yes, investors now understand that pandemics can happen and disrupt business and holiday travel. Somehow, though, Wall Street, the City of London and their counterparts appear to believe that once vaccines are distributed to most of the developed world’s population, the problem ends. The 1990s assumptions of peace and free financial flows will work once again.
/on.ft.com/2M5FtMJ

British Hedge Fund Billionaire Takes Climate Fight to S&P 500; Christopher Hohn’s campaign targets Alphabet, Union Pacific, Monster Beverage, Booking Holdings and others
Matt Wirz – WSJ
A billionaire hedge-fund manager is bankrolling an unprecedented campaign to force dozens of the world’s largest companies to publish carbon-emission reduction plans and put them up for shareholder vote. Frustrated by the pace at which corporations are cutting emissions, Christopher Hohn is backing a global effort to speed things up. He is working with nonprofit groups and investor organizations to get at least 100 of the companies in the S&P 500 stock index to adopt the initiative by the end of 2022—voluntarily if possible and through proxy battles at annual shareholder meetings if not.
/on.wsj.com/3aiQG4m

The GameStop Reckoning Was a Long Time Coming; This week, gleeful online hordes turned the stock market upside down. This shouldn’t come as a surprise.
Kevin Roose – NY Times
This week, the biggest story in the financial markets is the absurdist, pretty-sure-I-hallucinated-it drama involving GameStop, a struggling video-game retailer that became the rope in a high-stakes tug of war between Wall Street suits and a crusading internet mob.
/nyti.ms/3ouJSFV

GameStop’s ‘French Revolution’ Is a Crypto-Farce; Pseudo-populist Redditors show Bitcoiners a thing or two about taunting regulators.
Lionel Laurent – Bloomberg
The GameStop Corp. short squeeze has been tipped as finance’s “French Revolution” — a middle finger to the establishment by a hive mind of Redditors able to channel cash into the stock market at such pace and scale that expert hedge funds have had to be thrown lifelines. That bored day-traders could teach the pros a thing or two is reminiscent of other tales of the wisdom of the crowds — Garry Kasparov’s four-month chess match against the internet in 1999 comes to mind. It’s also rightly attracting regulatory scrutiny.
/bloom.bg/3oD2kMV

Famed GameStop bull ‘Roaring Kitty’ is a Massachusetts financial advisor
Chris Prentice, Pete Schroeder – Reuters
A YouTube streamer who helped drive a surge in the shares of GameStop Corp is a 34-year-old financial advisor from Massachusetts and until recently worked for insurance giant MassMutual, public records and social media posts show.
/reut.rs/3owO6gl

How the GameStop Trading Surge Will Transform Wall Street
Zachary Karabell – Time
For years, professional money managers and hedge funds have tsk-tsked about individual investors. They have dismissed them as “dumb money” and cautioned that so-called “retail” investors lack the acumen and experience to make the right calls and weather the inevitable storms. That has often been the case, but then came the GameStop phenomenon, when a tsunami of that so-called dumb money flooded parts of the stock market, leaving Wall Street professionals not just scratching their heads but a few of them badly wounded. And while this might be an anomaly, it more likely is the first rumbling of what will prove to be radical transformation of money and markets.
/bit.ly/2Myd7dU

Robinhood Banning GameStop Proves the Free Market Is a Lie
Eric Levitz – NYMag.com
Robinhood is a stock-trading app that exists to “democratize finance” — but will also, on occasion, prohibit you from buying stocks because democratically unaccountable experts have declared them overpriced.
/nym.ag/2Mydl4K

Eurozone banks are underestimating risks from the pandemic, E.C.B. warns.
Jack Ewing – NY Times
The European Central Bank on Thursday effectively warned eurozone banks to clean up their acts, saying that many are complacent about losses they may suffer from a surge in problem loans caused by the pandemic.
/nyti.ms/2L2I1dW

The ‘Gamification’ Of Wall Street?
Mondovisione
When college kids start enthusiastically discussing short interest activity in a particular stock, maybe there has been a fundamental shift in market behavior? Rather akin to one of the game ploys sold within its outlets, gamers, enabled by social media platforms and game-like brokerage technology, appear to have wrought havoc on one of the biggest short plays established by hedge funds, Gamestop (GME). Seemingly urged on by the CEO of one of the largest targets of the short side, Elon Musk, at first sight it would appear to be a classic case of a short squeeze causing hedge funds to buy back their shares at a loss because of lack of inventory to establish more short positions. However, is it as simple as this?
/bit.ly/2YtgxRE

Coronavirus

AstraZeneca Discloses EU Vaccine Contract After Supply Dispute
Suzi Ring – Bloomberg
AstraZeneca Plc bowed to pressure from the European Union and published its contract for the delivery of Covid-19 vaccines to the region as tensions escalate over an expected shortfall in supplies. The text suggests that U.K. manufacturing sites can be counted toward the company’s manufacturing arrangements for the EU, which has been a subject of dispute between the bloc and the British drugmaker. But the contract says only that the company should exercise “best reasonable efforts” to resolve capacity problems arising from competing supply agreements.
/bloom.bg/3cn9ZMQ

Novartis Signs Pact to Help Produce Pfizer-BioNTech Vaccine
James Paton – Bloomberg
Novartis AG, the Swiss drugmaker, agreed to help produce the Covid-19 vaccine developed by Pfizer Inc. and BioNTech SE, boosting efforts to meet demand amid concerns about supply constraints. Production is due to begin in the second quarter, with estimated delivery in the third quarter, according to a statement from the company on Friday. The pharma giant will rely on manufacturing facilities at a site in Stein, Switzerland.
/bloom.bg/3t7v4Rf

EU warned by business group on plan to curb Covid vaccine exports; International Chamber of Commerce tells Brussels move could have ‘devastating’ impact on global jab supplies
Michael Peel and Guy Chazan – FT
Brussels has been warned by a leading business group that its plans to give EU member states powers to block vaccine exports threatens to trigger retaliation and have a “devastating” impact on global jab supplies. The International Chamber of Commerce said in a letter to Ursula von der Leyen, European Commission president, that the move to limit exports — which is expected as early as Friday — could “very rapidly erode essential supply chains”.
/on.ft.com/36qt7p8

Dubai pays price for festive parties as coronavirus cases surge; Hospitals feel strain even with new restrictions and mass vaccination drive
Simeon Kerr – FT
Dubai cemented its reputation as a party city over the festive period, drawing revellers from around the world. Barely a month later the Gulf emirate is paying a high price as coronavirus cases surge and doctors complain of a shortage of beds.
/on.ft.com/3aiu2ci

Novavax’s Covid-19 vaccine shown to be 89% effective; US biotech says its jab also displayed ‘significant clinical efficacy’ against two virus variants
Hannah Kuchler – FT
Novavax’s Covid-19 vaccine is 89 per cent effective and works against new variants of the virus, according to interim data published from clinical trials in the UK and South Africa.
/on.ft.com/3clQS5D

Covid-19: how close is the light at the end of the tunnel? Only now are the first vaccines starting to reduce the death toll — and we should see major progress soon
Tim Harford – FT
Will it ever end? In November, we were celebrating the announcement that the BioNTech/Pfizer vaccine seemed to be highly effective against Covid-19, followed with bewildering speed by similar claims for the Sputnik V, Moderna and Oxford/AstraZeneca vaccines. Nearly three months later, hospitals are overwhelmed and the global death toll is climbing twice as fast as in the worst days of the first wave.
/on.ft.com/3cqsOyv

J&J Covid-19 Vaccine Was 66% Effective in Late-Stage Study; Based on the positive results, the company plans to seek authorization of the single-dose shot in the U.S. early next month
Peter Loftus – WSJ
Johnson & Johnson JNJ 0.76% said its experimental Covid-19 vaccine was 66% effective at protecting people from moderate to severe disease in a large clinical trial, positive results that could pave the way for its deployment across the U.S. within weeks. The J&J vaccine also appeared to be generally safe and well tolerated among the 44,325 adults aged 18 years and older in the late-stage trial, J&J said Friday, though some of the volunteers reported side effects like fever.
/on.wsj.com/3clwUrD

Johnson & Johnson’s Vaccine Offers Strong Protection but Fuels Concern About Variants; The vaccine’s efficacy rate dropped from 72 percent in the United States to just 57 percent in South Africa, where a highly contagious variant is driving most cases.
Carl Zimmer, Noah Weiland and Sharon LaFraniere – NY Times
Johnson & Johnson announced on Friday that its one-dose coronavirus vaccine provided strong protection against Covid-19, potentially offering the United States a third powerful tool in a desperate race against a worldwide rise in virus mutations.
/nyti.ms/39rlMrw

Coronavirus variant first seen in South Africa identified in South Carolina
Carolyn Y. Johnson and Joel Achenbach – Washington Post
A highly transmissible coronavirus variant first identified in South Africa was reported Thursday in the United States, hours before Maryland biotech company Novavax announced that its coronavirus vaccine was highly effective in preventing illness — except against that variant.
/wapo.st/3j1tVpQ

Exchanges, OTC and Clearing

LSEG Turquoise welcomes back Swiss securities as exchange equivalence is agreed; As the UK and Switzerland agree stock exchange equivalence, LSEG’s Turquoise confirms the relaunch of Swiss securities on the trading venue.
Jon Watkins – The Trade
The London Stock Exchange Group’s (LSEG) pan-European equities trading venue, Turquoise, has confirmed it will re-admit Swiss securities for trading on or after 3 February 2021. The move comes following an agreement between Switzerland and the UK regarding stock exchange equivalence, one of many aspects of the fallout of Brexit on the markets in recent weeks.
/bit.ly/3t4AaO9

Dividend Derivatives: Assessing the Impact of Covid-19
Eurex
In 2020, an unusual year, pre-announced dividends were slashed or cancelled. Antoine Deix, Equity Derivatives Strategist at BNP Paribas, discusses the pandemic’s impact on short, medium and long-term maturities and what the dividend market may look like as a recovery gets underway.
/bit.ly/3pzBOoM

GFF Summit: When the going gets tough, the tough get going;A blog by Matthias Graulich, Member of the Executive Board of Eurex Clearing
Eurex
With so much to worry about these days, let’s focus on the good things for a change: for example, the upcoming Global Funding and Financing (GFF) Summit 2021 from Tuesday, 2 February, to Thursday, 4 February 2021. Hope to see many of you there if, unfortunately, only virtually this year.
/bit.ly/2YpTEi7

Eurex connectivity: Introduction of new market data and order entry switches; Eurex Circular 009/21 Eurex connectivity: Introduction of new market data and order entry switches
Eurex
To provide existing participants with further growth opportunities and to ensure additional network capacity to serve new participants in the future, Eurex Exchange has decided to take the following actions:
/bit.ly/3ovVaKf

Market Data Dissemination Agreement – Trading Usage
Eurex
As a Trading Participant of Eurex Deutschland you receive Information, i.e. quotes, prices, turnover figures, indices and other data marketed by Deutsche Börse AG, directly or indirectly from the trading venue.
/bit.ly/2KYnlne

Position Limits and Accountability Levels
CME Group
Effective on trade date March 15, 2021, and pending all relevant CFTC regulatory review periods, this Market Regulation Advisory Notice supersedes CME Group Market Regulation Advisory Notice RA1907-5 from August 2, 2019.
/bit.ly/2KYnWFu

Amendments to CME, CBOT, and NYMEX/COMEX Rules 559. (“Position Limits and Exemptions”) and 562. (“Position Limit Violations”)
CME Group
Effective on trade date March 15, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME”), The Board of Trade of the City of Chicago, Inc. (“CBOT”), New York Mercantile Exchange, Inc. (“NYMEX”), and Commodity Exchange, Inc. (“COMEX”) (collectively, the “Exchanges”) are adopting amendments to CME CBOT, and NYMEX/COMEX Rules 559. (“Position Limits and Exemptions”) and 562. (“Position Limit Violations”) concurrent with the March 15, 2021, effective date for the CFTC’s final rule on Position Limits for Derivatives (“Final Rule”).
/bit.ly/2Myt4Ra

Performance Bond Requirements: Ether Margins – Effective February 05, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below. Please email any questions to Clearing.RiskManagement@cmegroup.com
/bit.ly/39v56PP

Performance Bond Requirements: Agriculture, Energy, FX, and Metal Margins – Effective January 29, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/3ovi2cO

Performance Bond Requirements: Agriculture and Energy Margins – Effective January 29, 2021
CME Group
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
/bit.ly/39tNrYL

Increase of Position Limits for Certain Agricultural Futures and Related Contracts
CME Group
Pending all relevant Commodity Futures Trading Commission (“CFTC” or “Commission”) regulatory review periods, The Board of Trade of the City of Chicago, Inc. (“CBOT” or “Exchange”) will increase the position limits for certain agricultural futures and related options contracts as more specifically described in CBOT Submission No. 21-068 and in the proposed revisions to the position limit table found HERE effective concurrent with the March 15, 2021
effective date for the Commission’s final rule on Position Limits for Derivatives (“Final Rule”).
/bit.ly/2Mwkhzc

Amendments to the CBOT, COMEX, and NYMEX Position Limit, Position Accountability, and Reportable Level Tables in Connection with the CFTC Final Rule on Position Limits for Derivatives
CME Group
Effective on trade date March 15, 2021 for the April 2021 contract month and beyond, the Commodity Exchange Inc (“COMEX”), the New York Mercantile Exchange (“NYMEX”) and the Chicago Board of Trade (“CBOT”) will make changes to position limits as noted below and in Exhibit A of CBOT Submission 21-068, Exhibit A of NYMEX/COMEX Submission 21-067, and Exhibit A of NYMEX Submission 21-066.
/bit.ly/2YrrFyA

EBS Market Integration onto CME Globex
CME Group
In Q4 2021, subject to applicable regulatory approvals, EBS Market’s Central Limit Order Book and eFix Matching Service will launch on CME Globex. You will receive subsequent notices with additional details and actions required to support the EBS Market integration onto CME Globex.
/bit.ly/39reB2v

SGX and Temasek JV ties up with Covalent to build end-to-end digital infrastructure
SGX
Singapore Exchange (SGX) and Temasek today announced that its digital assets joint venture (JV) – Marketnode – has partnered with fixed income issuance and data firm, Covalent Capital (Covalent), to build Asia Pacific’s first, end-to-end digital infrastructure in the fixed income space. This latest development follows the JV announcement by SGX and Temasek on 22 January. As part of the partnership, Marketnode will acquire a minority stake in Covalent.
/bit.ly/3iWPZSc

Schedule update for setting up systems at New Secondary Center
JPX
With the aim of further enhancing stability in operating its markets, Japan Exchange Group, Inc. has been constructing a new secondary data center (back-up center) in the Kansai region. As such, we hereby update the schedule for setting up systems at the center as indicated in the PDF below.
/bit.ly/3oviN5E

Fintech

Crackdown on Ant Group will be echoed elsewhere; Jack Ma’s disappearance tells us a lot about the nature of China’s brand of capitalism. It also speaks to just how political a weapon currency is, the world over.
Claire Jones – FT
Soon after the reappearance of Jack Ma last week, the FT’s China team had a story detailing how the country’s central bank was about to clamp down on Ant Group, the payments and technology arm of his business empire:
/on.ft.com/3r08KqO

Top 5 Fintech Trends That Will Shape Financial Markets in 2021
James Jorner – Entrepreneur
The year 2020 was not the greatest for many industries due to COVID-19. But interestingly, the likes of fintech reported rapid growth during the pandemic. In the absence of physical contacts, consumers relied on virtual financial services to access and disburse funds and fintech solutions came through.
/bit.ly/2MvqE5P

Fintech darling Nubank raises blockbuster $400M Series G at $25B valuation
Marcella McCarthy – TechCrunch
While the pandemic has left some startups strapped for cash, the aptly-named Brazilian neobank Nubank is swimming in it. This morning, the company announced that it has raised a $400 million Series G round, putting their total funding to date at $1.2 billion. But even more remarkable, in addition to their new $25 billion valuation (up from $10 billion in 2019), is their customer base of 34 million users, which they’ve built up since the fintech’s launch in 2013.
/tcrn.ch/3pHzcVK

M&T teams with fintech to help small businesses understand finances
Penny Crosman – American Banker
M&T Bank in Buffalo, N.Y., is working with a Canadian fintech called Railz to solve pain points for small businesses.
Getting a firm handle, for example, on the money flowing in and out of a small business can be an elusive goal for owners. Small businesses often lack steady work and they can’t predict when they will land big clients or accounts, or when those customers will pay their bills.
The problem is so prevalent that several lenders are looking to offer solutions for clients.
/bit.ly/3j9IwQ9

German Neobank N26 Mulling Takeover In FinTech Space
PYMMNTS.com
German neobank N26 is looking to make an acquisition in the FinTech space as speculation builds that it is readying an IPO. Privately held N26 is currently valued at around $3.5 billion. The FinTech’s CEO and Co-founder Maximilian Tayenthal told CNBC on Thursday (Jan. 28) that his bank has started looking around for a possible takeover target. “We have started to look, and we are still looking, opportunistically at some interesting targets,” Tayenthal said. “It could be players that are strong in certain areas, think about trading, think about KYC (know your customer). There could be other FinTechs, challenger players in our space that have a good customer base.” The company also announced that the bank, which now serves seven million customers around the world, plans to hire an additional 200 employees and expand into Brazil, where it recently obtained a banking license.
bit.ly/36lKqaW

Barclays reveals new Fintech startups for Accelerator class; New York Barclays Accelerator programme class list reveals nine latest Fintech contenders for the 2021 initiative
Joanna England – Fintech Magazine
Barclays has released the class list of Fintech startups that will join the bank’s exclusive New York Accelerator programme later this year. First launched in 2014 and powered by Techstars, the three-month programme was created to fast-track the next generation of fintech enterprises towards success. Companies taking part will partner with a team of Barclays experts and the Techstars worldwide network. Several industry leaders facilitate the programme, providing essential guidance on trouble-shooting, problem-solving and fine-tuning business propositions. After 13 weeks of mentorship, the companies then highlight their progress and showcase their ideas.
bit.ly/2M7hFYU

Cryptocurrencies

Coinbase Global Intends to Go Public Via Direct Listing; Company is latest to forgo traditional public-offering process
Allison Prang – WSJ
Cryptocurrency exchange Coinbase Global Inc. said Thursday it plans to go public through a direct listing, making the popular platform the latest company to forgo the traditional public-offering process. The company said last month it had filed a draft registration statement with the Securities and Exchange Commission for a public offering. Direct listings differ from traditional initial public offerings in that companies take their shares to the stock market directly. Companies are able to save money that in a more traditional IPO would be shelled out to investment banks. This option to go public isn’t as common as traditional IPOs.
on.wsj.com/3aiBwMq

Retail Wave Spurs Sevenfold Surge in Dogecoin Into Crypto Top 10
Gregor Stuart Hunter – Bloomberg
Fresh from a blistering rally on Thursday, cryptocurrency Dogecoin is soaring again atop a wave of demand churned up in chat rooms and on social media. The digital coin originally created as a joke jumped into the top 10 cryptocurrencies by market value on Friday at the end of a volatile week characterized by frenzied speculative trading by retail investors.
/bloom.bg/36ngMlU

Crypto Exchange Binance Says Its Systems Are Under Stress
Joanna Ossinger and Nour Al Ali – Bloomberg
Binance CEO says it almost ran out of Dogecoin addresses; Bitcoin soared after Musk added a reference to his Twitter bio
Binance, the world’s largest cryptocurrency exchange by volume, said a rush of new users put its systems under stress, forcing it to briefly suspend withdrawals. Chief Executive Officer Changpeng Zhao said that user sign-ups and trades jumped to a record high. Crypto prices surged on Friday after Tesla Inc. founder Elon Musk added a reference to Bitcoin to his Twitter profile and posted a mock magazine cover of a whippet in a red sweater, which users interpreted as a sign of support for Dogecoin.
/bloom.bg/3cu6uE2

Coinbase’s site down, Robinhood restricts crypto trading as bitcoin surges past $37,000
Yogita Khatri – The Block
Coinbase’s website is suffering from an outage since 7:41 am EST Friday, according to the crypto exchange’s status page. The exchange said it is currently investigating the issue. Meanwhile, the popular trading app Robinhood told CNBC that it has halted the instant crypto buying feature due to “extraordinary market conditions.” “Customers can still use settled funds to buy crypto. We’ll keep monitoring market conditions and communicating with our customers,” said Robinhood.
bit.ly/39rejZt

Coinbase enters top 10 free apps ranking on Apple’s US mobile store
Wolfie Zhao – The Block
Coinbase has entered the top 10 ranking of free apps on Apple’s U.S. mobile store. Live ranking of the free apps on Apple’s App Store in the U.S. shows Coinbase ranks the 4th as of Friday, following Robinhood, Webull and Reddit while ahead of TikTok, Cash App and Zoom.The new ranking comes weeks after Coinbase advanced to the top 30 free apps on the U.S. App Store earlier this month. Outside the U.S., Coinbase ranks the 15th and 131st on the U.K. and Singapore App Store. Meanwhile, Binance’s mobile app has also entered the top 20 free apps ranking and now at the 3rd and 18th spot on Apple’s App Stores in the U.K. and the U.S., respectively, living ranking shows.
bit.ly/36oD32r

Visa’s Q1 earnings call reveals details about its crypto strategy
Aislinn Keely – The Block
Visa dedicated a section to crypto during its Q1 2021 earnings call today. In his prepared remarks, CEO Alfred Kelly said Visa is poised to make crypto payments safer and more widely used through its partnership approach. Kelly said Visa plans to work with wallets and exchanges to enable Visa users to purchase crypto-assets, and to allow users to cash out and make fiat purchases with their crypto.
bit.ly/3ais7Vp

FTX Exchange Lists WallStreetBets Futures to Capitalize on Investing Movement; The futures contract is based on a basket of stocks being targeted by WallStreetBets and dogecoin.
Sebastian Sinclair – Coindesk
Cryptocurrency derivatives exchange FTX has listed a WallStreetBets (WSB) index quarterly futures contract in a bid to capitalize on the retail trading fervor that exploded in recent days. Announced Thursday via blog post, the basket of markets that make up the contract include stocks being targeted by the Reddit trading group – Nokia (NOK), Blackberry (BB), EMC Entertainment (AMC), GameStop (GME), iShares Silver Trust (SLV) – as well as the dogecoin (DOGE (+299.4%)) cryptocurrency and FTX’s native token FTT. The stocks and DOGE comprise 99% of the index, while FTT accounts for just 1%.
bit.ly/3t6mZw4

Blockfolio launches zero-fee crypto trading on its app
Frank Chaparro – The Block
Nearly six months after FTX acquired the crypto price tracking app Blockfolio in a $150 million deal, the platform is now ready to roll-out a crypto trading functionality. Blockfolio got its start in the crypto market as a place where users could track the price of various cryptos and the performance of their holdings. The new functionality — which will be powered by FTX’s trading systems — will put the firm up against a long list of players that offer crypto trading, such as Coinbase and Robinhood.
bit.ly/3acInXS

MicroStrategy says it will look into ‘various approaches’ to obtain more bitcoin
Michael McSweeney – The Block
MicroStrategy wants to acquire more bitcoin, according to the firm’s Q4 2020 results filing, and it’s exploring alternative avenues for doing so. Michael Saylor, who was quoted in the Q4 results, remarked on the publicly-traded company’s bitcoin treasury strategy, which has seen it acquired tens of thousands of BTC to date.
bit.ly/3cn4q0L

Politics

Suspected Russian Hack Extends Far Beyond SolarWinds Software, Investigators Say; Roughly 30% of victims are said to have no connection to the network-management company’s tainted software
Robert McMillan and Dustin Volz – WSJ
Investigators probing a massive hack of the U.S. government and businesses say they have found concrete evidence the suspected Russian espionage operation went far beyond the compromise of the small software vendor publicly linked to the attack. Close to a third of the victims didn’t run the SolarWinds Corp. SWI -4.88% software initially considered the main avenue of attack for the hackers, according to investigators and the government agency digging into the incident. The revelation is fueling concern that the episode exploited vulnerabilities in business software used daily by millions.
/on.wsj.com/3cjvE8w

Arizona GOP lawmaker introduces bill to give Legislature power to toss out election results
Dartunorro Clark – NBC News
The Republican chair of Arizona’s state House Ways and Means Committee introduced a bill Wednesday that would give the Legislature authority to override the secretary of state’s certification of its electoral votes. GOP Rep. Shawnna Bolick introduced the bill, which rewrites parts of the state’s election law, such as sections on election observers and securing and auditing ballots, among other measures. One section grants the Legislature, which is currently under GOP control, the ability to revoke the secretary of state’s certification “by majority vote at any time before the presidential inauguration.”
nbcnews.to/2KXPCKC

Fired Fox News political editor calls out ‘hype men in the media’ who helped Trump attempt to ‘steal an election’
Oliver Darcy – CNN
A longtime Fox News politics editor, who was fired by the network earlier this month after angering former President Donald Trump, rebuked the current state of American media and skewered right-wing propagandists in a candid opinion piece published Thursday. Chris Stirewalt, who drew scorn from Trump and his supporters after calling the state of Arizona early on election night for now-President Joe Biden, did not name Fox News while leveling criticism against the media in his Los Angeles Times piece. But it was clear that he was referring to the right-wing cable channel throughout his critique.
cnn.it/3r1UihZ

Regulation

Sic the SEC? Not so fast — case near impossible to prove
Charles Gasparino – NY Post
The GameStop trading frenzy has morphed from an insane market story to a political one as well. Regulatory sources tell me that Wall Street’s top cop, the Securities and Exchange Commission, is eyeing a possible market manipulation case over the tremendous run-up in shares that turned a penny stock into the next Amazon nearly overnight. That sounds like a big deal until you realize that bringing the case would be the regulatory equivalent of the Jets winning the Super Bowl. Possible . . . but highly, highly unlikely.
/bit.ly/39q6cwe

ESMA consults on changes to CRA supervisory fees
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today launches a public consultation on the revision of the Delegated Regulation regarding fees charged to CRAs.
/bit.ly/39vMNtC

ESAs consult to amend technical standards on the mapping of ECAIs’ credit assessments
ESMA
The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) launched today a public consultation to amend the Implementing Regulations on the mapping of credit assessments of External Credit Assessment Institutions (ECAIs) for credit risk. The amendments are needed to assign mappings for two newly established ECAIs and to reflect the outcomes of a monitoring exercise on the adequacy of existing mappings, namely changes to the Credit Quality Steps (CQS) allocation for two ECAIs and the introduction of new credit rating scales for nine ECAIs. The Implementing Regulations are part of the EU Single Rulebook for banking and insurance aimed at creating a safe and sound regulatory framework consistently applicable across the European Union (EU). The consultation runs until 5 March 2021.
/bit.ly/2L2EoVm

ESMA calls for legislative action on ESG ratings and assessment tools
ESMA
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has written to the European Commission (EC) sharing its views on the main challenges in the area of ESG ratings and assessment tools. ESMA highlights the need to match the growth in demand for these products with appropriate regulatory requirements to ensure their quality and reliability.
/bit.ly/2YswN5E

Virtual Compliance Boot Camps
FINRA
FINRA’s Virtual Compliance Boot Camps are one-hour interactive virtual classroom sessions that include training on a variety of topics including Cybersecurity and Anti-Money Laundering (AML) and provide an opportunity to learn from and work closely with FINRA subject matter experts in a small group setting. Participants gain valuable insights on compliance activities for immediate application in the workplace.
/bit.ly/3iYCmC4

FINRA/NYSE TRF Delay in Trade Report Processing to FINRA and DTCC
FINRA
On Wednesday, January 27, 2021, starting at 2:40 p.m. ET, the FINRA/NYSE TRF experienced a technical issue resulting in delays when submitting trade information to DTCC and FINRA. Trade reports to the Consolidated Tape were not impacted, and all trades were submitted to clearing by 8:30 p.m. ET on January 27, 2021.
/bit.ly/3iWRorW

CFTC Orders Nebraska Company to Pay $400,000 for Position Limits Violations
CFTC
The Commodity Futures Trading Commission today issued an order filing and simultaneously settling charges against an Omaha, Nebraska-based company that refers to itself as AG Processing Inc a cooperative (AGP) for exceeding the CFTC’s all-months speculative position limits for soybean meal futures contracts traded on the Chicago Board of Trade (CBOT). The order requires AGP to pay a $400,000 civil monetary penalty.
/bit.ly/3ou8Zss

Charlie Thornton to Depart CFTC
CFTC
The Commodity Futures Trading Commission today announced that N. Charles “Charlie” Thornton III will leave the agency for a new opportunity in the private sector. Since 2017, Mr. Thornton has served in multiple leadership roles at the CFTC under two Chairmen, most recently as Chief of Staff and Chief Operating Officer under Chairman Tarbert. Previously, he served as Counselor to Chairman Tarbert, developing, communicating, executing, and sustaining the CFTC’s strategic initiatives.
/bit.ly/3ou9iU8

Canadian Securities Regulators Provide Additional Proficiency Options For Distributing Alternative Mutual Funds
Mondovisione
The Canadian Securities Administrators (CSA) today issued blanket relief that provides dealing representatives in the Mutual Fund Dealers Association (MFDA) channel and outside the MFDA channel in Québec with additional proficiency options for distributing alternative mutual funds.
/bit.ly/3ovnjB8

Ontario Securities Commission Issues Best Practice Guidance For Prospectus Filings http://
Mondovisione
/bit.ly/399JGrI

Investing and Trading

GameStop Rises More Than 100% as Brokerages Ease Curbs
Elena Popina, Sarah Ponczek, and Paul Jarvis – Bloomberg
GameStop, AMC jump in premarket after Thursday’s sharp losses; Robinhood says it will allow trading in some blocked stocks
GameStop Corp. and other day-trader favorites surged back after Thursday’s tumble as brokerages said they would start to ease trading restrictions, setting the scene for another wild day on the markets. GameStop, the face of the retail craze that’s gripped Wall Street and drawn scrutiny from Washington, rallied as much as 143% and was up 98% at $383 as of 6:55 a.m. in New York. The heavily shorted video-game retailer plunged 44% in Thursday’s U.S. cash session. AMC Entertainment Holdings Inc. rose 55% in premarket after falling 57% on Thursday.
/bloom.bg/36nyLbT

Inside GameStop’s Crazy Week
Lorcan Roche Kelly and Tracy Alloway – Bloomberg
What was that? This week markets were fixated by an astronomical run-up in shares of GameStop Corp., which at one point were up 2,000% in less than a month. Much of the moonshot was driven by retail investors, who used online forums like Reddit’s WallStreetBets to organize a concerted push at the expense of hedge funds like Melvin Capital Management LP.
/bloom.bg/3cqoVJV

How One Online Investor Made the Score of a Lifetime on GameStop
Tracy Alloway and Joe Weisenthal – Bloomberg
Everyone is talking about GameStop. The physical games retailer that was left for dead has been one of the hottest stocks of the year, surging well over 50x since its lows in late 2020. But how did it come about? Why GameStop? And what was the role that social media played? We speak with Rod Alzmann, the proprietor of GMEDD.com, which collects the fundamental bullish argument for the stock, about how it all happened.
/bloom.bg/3aiKkly

GameStop’s Plunge Erases $11 Billion as Brokers Curb Trades
Bailey Lipschultz and Divya Balji – Bloomberg
Stock halted 19 times with trading increasingly volatile; E*Trade joined other brokers, curtails trading in some stocks
GameStop Corp. plummeted, snapping a dizzying six-day rally and wiping out nearly $11 billion in market value after brokerages choked off demand for the stock by curbing trading on the apps used by the company’s zealous fan base. The stock plunged 44% Thursday after Robinhood Markets, Interactive Brokers Group Inc. and others took steps to curtail activity in several high-flying stocks, including GameStop and AMC Entertainment Holdings Inc. E*Trade Financial is preventing customers from purchasing shares of both firms, according to a person familiar with the matter.
/bloom.bg/2NNUx1Z

Silver Market Jitters Are on Display After Reddit Options Frenzy
Eddie Spence – Bloomberg
Spot prices jumped as much as 3.5% to three-week high; Thursday saw a trading frenzy as Reddit forum targeted silver
Silver prices were whipsawed again, suggesting the market remains on high alert after a call by Reddit posters to create a short squeeze sparked sharp moves Thursday. Spot silver rose as much as 3.5%, as prices resumed an earlier climb after the dollar erased its daily gains. Silver futures also saw sizable moves, increasing as much as 6.3% in New York, and gold prices rose more than 1% in both London and New York.
/bloom.bg/36qspbs

Day-trader bets on AMC hand big gains to lenders Silver Lake and Mudrick; Cinema operator’s skyrocketing stock price makes debt-to-equity conversion ‘trade of a lifetime’
Joe Rennison, Alice Hancock and Robert Smith, and Sujeet Indap – FT
The Reddit army of day traders has handed gains worth hundreds of millions of dollars to two big-name creditors of struggling cinema operator AMC Entertainment, after the investment firms swapped risky debt for equity that has skyrocketed in value.
/on.ft.com/3cu9DUm

Creator of WallStreetBets calls GameStop surge a ‘train wreck’
Kenneth Garger – NY Post
The creator of the Reddit forum at the center of the ongoing stock market frenzy called the recent coordinated strategy to pump ailing stocks like GameStop and AMC a “train wreck.” Jaime Rogozinski, 39, who established Reddit’s r/WallStreetBets in 2012 as a platform to discuss unconventional investing strategies, expressed unease over the forum’s astronomical rise in influence in an interview with The Wall Street Journal.
/bit.ly/2METKzB

Environmental, Social and Corporate Governance

Messy Carbon Offsets Show Markets Aren’t Always the Answer; Big finance may have to accept the reality that bespoke carbon removal solutions simply don’t lend themselves to an elegant, scalable market.
Kate Mackenzie – Bloomberg
Big finance and industry have waded into one of the most complicated and fraught parts of tackling climate change: carbon credits. These are the transactions made, for example, when you pay an airline a small “offset” fee to make your flight carbon neutral. The money is meant to fund projects that remove carbon dioxide from the air, perhaps by planting trees.
/bloom.bg/3cgHgJs

Hydrogen Could Be Key To Clean Long-Haul Transport in Canada; A national strategy launched in December could position the country as a global leader in clean hydrogen technology.
Danielle Bochove – Bloomberg
Long haul transportation, core to shipping people and goods across Canada’s vast geography, remains an obstacle to the country embracing clean energy. Between 1990 and 2018, Canada’s transport emissions grew 55%, much of that coming from trucks — both freight and light passenger models. With the long-awaited launch on December 16 of a national hydrogen strategy, the federal government signaled that hydrogen will be part of its long-haul solution. The strategy aims to position the country as a global leader in the production, export and use of clean hydrogen and associated technologies. To support those goals, the government has invested $1.5 billion in a fund to support low-carbon fuels, including hydrogen.
/bloom.bg/3czeEeL

Wall Street’s new mantra: green is good; Bankers once saw tackling climate change as a niche issue. Now it is a chance to fuel future profits. Is it a turning point?
Gillian Tett – FT
In August 2019, Larry Fink, co-founder of BlackRock, the world’s largest asset management group, flew out to the remote wilderness of Lake Iliamna in south-west Alaska. Fink makes that pilgrimage every summer with friends such as Philipp Hildebrand, the former Swiss central bank governor, who now works at BlackRock, and Mike Corbat, the outgoing head of Citibank. The men engage in fly-fishing, wine-tasting and economic debate amid the mountains’ pristine beauty.
/on.ft.com/3ae1iSe

Black Lives Matter ushers in new era for diversity officers; The wave of anti-racist protests in 2020 marked a turning point for many organisations
Taylor Nicole Rogers – FT
The killings of George Floyd, Ahmaud Arbery and Breonna Taylor last year not only launched a racial reckoning in the US, they also revitalised the diversity business. Tasked with overcoming workplace discrimination in areas ranging from recruitment to product development, chief diversity officers have long complained of being under-resourced and organisationally siloed. Veteran CDOs say the job has the highest rate of turnover in the C-suite.
/on.ft.com/2NMvnRj

Broadridge Launches ESG Advisory Services – New Offering With Third Economy Rapidly Accelerates Corporate And Institutional ESG Strategies
Mondovisione
To better help companies and investors enhance their Environmental, Social and Governance (ESG) programs, Broadridge Financial Solutions, Inc. (NYSE:BR), a global Fintech leader, and Third Economy, a leader in sustainable investment research and advisory services, have launched an ESG Advisory Service. This new service, leveraging proprietary data, will help corporate issuers and asset managers improve sustainability strategies while effectively positioning their ESG programs with stakeholders.
/bit.ly/2MyJngP

Institutions

Norway Wealth Fund Dumps Oil Stocks Amid $10 Billion Loss
Lars Erik Taraldsen – Bloomberg
Norway’s sovereign wealth fund has sold its entire portfolio of companies focused on oil exploration and production, marking a major step away from fossil fuels for the investing giant. The portfolio, worth about $6 billion in 2019, was fully exited by the end of last year, Trond Grande, the fund’s deputy chief executive, said by phone on Thursday. The move completes a years-long process to reduce the giant investor’s exposure to a sector that has defined Norway’s economy for the better part of half a century.
/bloom.bg/3taj1m0

Robinhood raises $1bn from investors and taps banks at end of wild week; Online brokerage poised to restart trading in some popular stocks after customer backlash
Michael Mackenzie, Eric Platt and James Fontanella-Khan and Philip Stafford – Ft
Robinhood, the online brokerage at the centre of wild trading in equities this week, has raised more than $1bn from its existing investors and tapped credit lines from banks to shore up its financial position after a turbulent four days.
/on.ft.com/3cmVmcf

Hedge funds rush to get to grips with retail message boards; Professional speculators start efforts to scrape data from Reddit to avoid assaults
Madison Darbyshire and Laurence Fletcher, Colby Smith and Michael Mackenzie – FT
Hedge funds accustomed to poring through arcane corners of earnings reports in search of companies to bet against are turning their sights on foul-mouthed online message boards in an effort to stay ahead of day traders who have started beating them at their own game.
/on.ft.com/3cnLMGe

Franklin Templeton named worst-selling fund manager of 2020; Active managers dominate latest Morningstar rankings of firms with the most net outflows last year
Attracta Mooney – FT
Franklin Templeton has been named the world’s worst-selling retail fund manager for 2020 after investors pulled almost $50bn from the US group, marking the latest sign that it is struggling to turn round its fortunes. The California-based asset manager has suffered more than half a decade of heavy redemptions, repeatedly holding the crown of the worst-selling investment manager.
/on.ft.com/3aiNHJc

Investors dump State Street ETF after GameStop weighting surges; Fund’s shares soar but exposure to the video game retailer also rises to nearly 20%
Steve Johnson – FT
State Street Global Advisors’ SPDR S&P Retail ETF (XRT) has been one of the biggest winners — and losers — from this week’s surge in shares in GameStop. The ETF has risen by 24 per cent this week, largely off the back of its exposure to the struggling video game retailer, which has seen its shares rocket by as much as 255 per cent in the past week as an army of retail investors put the mother of all short squeezes on hedge funds that had shorted the stock.
/on.ft.com/3tan55K

UK looks into ETF hub launch to boost industry post-Brexit; Consultation seeks input on how to enhance UK’s reputation as a location for entirely new funds
Robert Van Egghen – FT
The UK government is exploring whether the country could become a hub for exchange traded fund launches as it looks for ways to boost the asset management industry outside the EU. The UK Treasury on January 26 launched a wide-ranging industry consultation on the future shape of fund regulation in the UK.
/on.ft.com/2MekyHe

Mets owner Steve Cohen can’t escape GameStop stock fallout amid Reddit revolt
Thornton McEnery – NY Post
Steve Cohen has become the latest victim of the “Reddit Rally.” The billionaire Mets owner’s hedge fund Point72 Capital is down more than 10 percent since the start of the year because of the unprecedented short squeeze on stocks like GameStop and AMC Entertainment, industry insiders told The Post.
/bit.ly/2L0wLPh

Lead fixed income dealer at Royal London appointed dealing head; Kevin Flood has been appointed head of dealing following the departure of Cathy Gibson last year.
Hayley McDowell – The Trade
Royal London Asset Management has confirmed that its lead fixed income dealer will become head of dealing after three years with the firm. Kevin Flood will oversee the centralised dealing team at Royal London consisting of six traders working across equity and fixed income, covering all asset classes. He will report to chief investment officer, Piers Hillier.
/bit.ly/3oxShbE

Former UBS investment bank boss Orcel on track for UniCredit CEO role; The UniCredit board of directors has nominated Andrea Orcel for the role of CEO, a decision expected to be approved at the bank’s upcoming annual general meeting.
Annabel Smith – The Trade
The board of directors at Italian banking group UniCredit has nominated the former president of investment banking at UBS, Andera Orcel, as chief executive officer. Orcel will replace outgoing chief executive officer Jean Pierre Mustier following the bank’s annual general meeting in April where his nomination for the role will be presented for approval.
/bit.ly/2Yn0HrM

Here’s how to transfer stocks out of your Robinhood account
Jack Morse – Mashable
Taking from the poor and giving to the rich was never supposed to be Robinhood’s thing. Users of the free stock-trading app Robinhood were up in arms Thursday after the company blocked the purchase of several stocks associated with a short squeeze led by the subreddit r/wallstreetbets. Thankfully, just because their money is tied up in the Robinhood app doesn’t mean it has to remain that way.
/bit.ly/2YpYkob

Angry Hedge Fund Billionaire Leon Cooperman Is Mad at GameStop Redditors for “Attacking Wealthy People”; |”The reason the market is doing what it’s doing is people are sitting at home getting their checks from the government, okay, and this fair share is a bullshit concept.”
Bess Levin – Vanity Fair
As you’ve probably heard by now, shares of GameStop, the video game retailer, have surged approximately a gazillion percent in the past six months, spiking sharply in the last several days. You might wonder why that happened, given that most people don’t go to the store to buy video games anymore, particularly during a pandemic, and the short answer is that a gaggle of small-time traders, many of them posters on the Reddit forum r/WallStreetBets, decided it would be both funny and a bit of cosmic retribution for them to drive up the price of GameStop’s shares, screwing over the hedge fund managers who’d bet the company’s stock was going to drop precipitously.
/bit.ly/39riSTB

It Wasn’t Just Small Investors Behind the GameStop Frenzy, Some Fear
Jacob Sonenshine – Barron’s
Some investors have an upset stomach from the trading action of the past few days. Now others are wondering if Wall Street was behind the worst of it. On Wednesday, the major U.S. indexes fell more than 2% and had fallen almost 3% between Tuesday and Wednesday. In short, the volume of bullish call options on heavily shorted stocks surged. The brokers who write options contracts hedge the contracts by buying stocks, sending those stocks ever higher. The short sellers then must cover their positions by buying the shares of those companies back. In order to fund those purchases, those short sellers sold out of long positions in other stocks to raise the cash. That pressured the broader market.
/bit.ly/3pvotOk

Regions

Cargill, Deutsche Bank Among Firms Taiwan Accuses of FX Speculation
Bloomberg News
Authorities identified $11b positions linked to food trades; Louis Dreyfus, Citigroup also found to have speculated on TWD
Cargill Inc and Deutsche Bank AG are among a group of major foreign companies under probe in Taiwan for speculating on the surging local currency last year, hindering the central bank’s efforts to rein in a rampant foreign-exchange market.
/bloom.bg/3adS2gL

Brexit

How Brexit is already taking its toll on the U.K. economy
Pierre Briançon – MarketWatch
With disruptions at European borders and supply chains perturbed by new tariffs, the U.K. economy has begun to show the negative economic impact of leaving Europe’s single market and customs union at the beginning of the year, several indicators show.
/on.mktw.net/3j1NUob

Brexit negotiator David Frost pulled away from national security role
Heather Stewart – The Guardian
David Frost, who negotiated the Brexit deal on behalf of Boris Johnson, will no longer be given the plum role of national security adviser, the government has announced.
Lord Frost’s appointment provoked a backlash from Conservatives including the former prime minister Theresa May because of his lack of relevant expertise.
/bit.ly/3pwnP39

U.K. Business Chiefs Cite Substantial Brexit Woes in Gove Call
Alex Morales – Bloomberg
The U.K.’s five main business lobby groups said British companies face “substantial” post-Brexit difficulties in trading with the European Union after holding a call with Cabinet Minister Michael Gove.
The so-called B5 — the British Chambers of Commerce, Confederation of British Industry, Federation of Small Businesses, Institute of Directors and Make UK — described the call among members of the government’s Brexit Business Taskforce as “productive” in a joint statement issued late Thursday.
/bloom.bg/3j2lCKb

The Data & Brexit Digest – Drafting tips for contracts and policies
Bryan Cave and Leighton Paisner – JDSupra
With the UK now unambiguously out of the EU, the EU General Data Protection Regulation (2016/679) (“EU GDPR”) has been replaced by the United Kingdom General Data Protection Regulation (“UK GDPR”). In this third instalment of our Data & Brexit Digest, we highlight some practical implications of Brexit for data protection contractual drafting and policies.
/bit.ly/39vJF0Q

Less choice, less competition, higher prices: How Brexit will hit Irish retail; It will now be easier to import direct from the EU than via the UK, but the cost is significant
John FitzGerald – The Irish Times
The EU single market ushered in a major change in the organisation of supplies to retail groceries. Up to then the practice had been that producers distributed their wares to individual supermarkets, with many delivery trucks serving each premises. It was an expensive and time-consuming way to stock the shelves.
bit.ly/39vOtng

LSE looks at ‘blank cheque’ deals to keep London ahead after Brexit
Huw Jones, Rachel Armstrong – Reuters
Britain should replicate New York’s “blank cheque” listings to boost London’s appeal as a global financial centre after Brexit, London Stock Exchange Chief Executive David Schwimmer said. After cementing its $27 billion acquisition of data and analytics company Refinitiv on Friday, the LSE is likely to play a central role in keeping Britain’s huge financial services sector competitive after its departure from the European Union. This has cut the City of London adrift from its biggest customer and facing listings competition from Amsterdam, where the bulk of euro share trading in London moved on January 4.
reut.rs/3t93cw8

If the UK becomes a failed state after Brexit, what will happen to England? Britain is looking – and behaving – less like a united kingdom than ever before. And for the Tories, the demise of the union is the price they will happily pay for Brexit, reports Mary Dejevsky
Independent
As the reality of Brexit starts to hit home, with the disruption of trade between mainland Britain and Northern Ireland, trawlermen left with unsaleable fish, and that extra pound or so we’ll have to pay for a bottle of French or Spanish wine, so profound political and constitutional effects are also making themselves felt. The UK is looking, and behaving, less and less like a united kingdom.
/bit.ly/3ovgpfh

John Lothian Newsletter

We visit more than 100 websites daily for financial news (Would YOU do that?)

“John Lothian and Company… our industry intelligence.”

Rick Lane

CEO, Trading Technologies

Past JLN Newsletters

When Americans Took to the Streets Over Inflation

When Americans Took to the Streets Over Inflation

First Read $42,376/$300,000 (14.1%) ++++ Hits & Takes John Lothian & JLN Staff 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...

Gensler says SEC to review payment for order flow

Gensler says SEC to review payment for order flow

First Read $42,376/$300,000 (14.1%) ++++ Hits & Takes John Lothian & JLN Staff The new CME Group micro Treasury futures contracts are not the basis point futures I have suggested, but they are very close and maybe better. Certainly the micro name will enhance...

Pin It on Pinterest

Share This Story