Hits & Takes
Broadridge has secured a deal to buy Itiviti, which used to be named Orc and was spun out of OM. Broadridge is a firm to keep your eye on as it buys and builds key parts of market infrastructure.
The Cboe received regulatory approval to launch periodic auctions for U.S. equities trading from the SEC. This is something the Cboe has talked about for several years, including having a professor who was a proponent of the periodic auctions give a presentation to the press at Boca one year, back when Bill Brodsky was still the chairman and CEO.
Bloomberg’s Joe Weisenthal and Tracy Alloway have recorded an interview with Virtu CEO Doug Cifu, who explains payment for order flow and the future of HFT. Worth a listen.
The big story in the market is an old one. It is about a hedge fund that ate like a bird and is pooping like an elephant.
The television show Saturday Night Live’s Pete Davidson explained NFTs in an Eminem parody on the show over the weekend.
There were no new donations to the JLN Marketswiki Education GoFundMe campaign over the weekend. 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
Wolters Kluwer covered CFTC Commissioner Brian Quintenz‘s “dissent” published last week about cryptocurrency futures exchange ErisX‘s withdrawal of proposed futures contracts on football gambling. ErisX withdrew its proposal shortly before the CFTC was set to disapprove it. Brad Rosen’s piece, which recounts the commissioner’s position, was published Friday after we mailed our newsletter. It is now available here.~Thom Thompson
The Spread: Moonshot
This week on The Spread, bitcoin options hit records for bullishness, the OCC adds two industry veterans to its board of directors, and more.
How a Desert Wind Blew $10 Billion of Global Trade Off Course; The giant Ever Given container ship remains wedged in the Suez Canal. We spoke to captains and analyzed marine tracking data to look at what might have gone wrong.
K Oanh Ha, Javier Blas, Mirette Magdy, and Ann Koh – Bloomberg
The forecast for Tuesday, March 23, showed wind gusts of more than 40 miles per hour and sand storms sweeping through northern Egypt. Indeed, such weather is common in the Sinai desert at this time of year. The Suez Canal—one of the most critical, yet precarious waterways on the planet—remained open. Ships were starting to form the daily convoy as the gusts picked up. One of the world’s biggest container vessels, the Ever Given, joined it. The decision would reverberate globally within hours.
*****With a little help from the moon, there is some progress that has been made. If you really look at it, what we had here was a ship captain that was not very good at the game of Tetris.~JJL
Robinhood Trader May Face $800,000 Tax Bill
Shahar Ziv – Forbes
Over eight million people opened new brokerage accounts in the first three quarters of 2020. While the thrill of enormous stock gains may have provided a much needed distraction for some during the pandemic, unintended tax consequences are now manifesting for new investors. In one jaw-dropping case, a Robinhood newbie is facing a potential tax bill of $800,000 despite only making $45,000 in net trading profits; the individual also earned $60,000 at his day job. The example reinforces the importance of understanding complex trading rules and the tax implications of certain strategies. More broadly, it should serve as a loud warning for the new crop of do-it-yourself investors.
*****Here is a lesson on why it is important to read the rules of the game you are playing. This trader is probably not alone in this type of predicament.~JJL
Remote Work Is Here to Stay. Manhattan May Never Be the Same; New York City, long buoyed by the flow of commuters into its towering office buildings, faces a cataclysmic challenge, even when the pandemic ends.
Matthew Haag – NY Times
Spotify’s headquarters in the United States fills 16 floors of 4 World Trade Center, a towering office building in Lower Manhattan that was the first to rise on the site of the 2001 terror attacks. Its offices will probably never be full again: Spotify has told employees they can work anywhere, even in another state. A few floors down, MediaMath, an advertising tech company, is planning to abandon its space, a decision fueled by its new remote-work arrangements during the pandemic.
*****This is a real question for me: What will the downtown areas be like when people feel free to go back to work together? I think it will be different. Many firms will be downsizing their space. The WeWork approach will be more popular. And many people will continue to work at home, empowered by the technology and experience of having done it for a year during the pandemic.~JJL
Friday’s Top Three
The top-read story on Friday was a recap of by the FIA’s Will Acworth, Six things we learned from Boca V. The second most-read was the lengthy statement by CFTC Commissioner Brian Quintenz on the withdrawn ErisX NFL futures contracts Any Given Sunday in the Futures Market. And third was a press release about the commodity deal Marex Spectron Acquires Starsupply.
202,039,499 pages viewed; 25,526 pages; 231,195 edits
|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
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‘Unprecedented’: Wall Street Ponders Goldman’s Block-Trade Spree
Vivianne Rodrigues, Albertina Torsoli, and Jan-Patrick Barnert – Bloomberg
‘Never seen something of this magnitude in my 25-year career’; ‘The question now is: Are they done? Is this over?’: Investor
As Wall Street speculated on the identity of the mysterious seller behind the massive $10.5 billion in block trades executed on Friday by Goldman Sachs Group Inc., investors also pondered just how unprecedented the selloff was — and whether there’s more to come. The sales lit up trader chat rooms from New York to Hong Kong and were part of an extraordinary spree that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates. “I’ve never seen something of this magnitude in my 25-year career,” said Michel Keusch, portfolio manager at Bellevue Asset Management AG in Switzerland.
Nordic Capital to sell Itiviti, a leading trading technology and service provider, to Broadridge, a global Fintech leader
Itiviti has grown significantly during Nordic Capital’s ownership, creating a global force in capital markets technology and infrastructure; By joining forces with global Fintech leader Broadridge (NYSE: BR), Itiviti is taking the next step in enhancing its capital markets capabilities and extending its global reach
Nordic Capital has agreed to sell Itiviti, a leading provider of trading technology and services to financial institutions worldwide, to Broadridge Financial Solutions a global Fintech leader, in a transaction valued at EUR 2.143 billion. Since Nordic Capital took Itiviti private in 2012, it has made substantial technology investments and fully transformed the Company to create one of the world’s leading providers of trading technology for the global capital markets industry.
Abu Dhabi launches new oil futures as it targets Asian refiners; Move aims to create benchmark to rival other regional players including Dubai and Oman
Anjli Raval – FT
Abu Dhabi began trading futures contracts for its most important oil grade Murban on Monday as the emirate seeks to create a rival regional benchmark as part of a big shake-up in the way its crude is traded. The Abu Dhabi National Oil Company began trading Murban futures on a new local exchange, the ICE Futures Abu Dhabi. It will compete with Dubai, operated by S&P Global Platts, and the Oman crude futures on the Dubai Mercantile Exchange.
Cboe Receives Regulatory Approval to Launch Periodic Auctions for U.S. Equities Trading
Cboe Global Markets, Inc.
New auction mechanism designed to enhance intraday liquidity and price discovery in the public markets; Builds on success of Cboe Europe Periodic Auctions, the largest periodic auction platform in Europe; Further expands Cboe’s block trading capabilities;Planned for launch in the third quarter of 2021
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today announced it has received approval from the U.S. Securities and Exchange Commission (SEC) to introduce periodic auctions on Cboe BYX Equities Exchange – bringing to the U.S. equities markets a new, innovative intraday auction mechanism based on a reimagining of a process that it first launched in Europe. Cboe expects to launch U.S. periodic auctions in the third quarter of 2021.
A Tiger Cub’s $20 Billion Margin Call Means More Hedge Fund Pain Ahead; The protege of a legendary firm has been injured in the ugly first quarter of 2021 as the short squeezes of January give way to the crowded long position selloffs of March.
Shuli Ren – Bloomberg
What do U.S. media company ViacomCBS Inc. and Chinese after-school education provider GSX Techedu Inc. have in common? Not much, other than that they were part of a massive $20 billion selling spree by Goldman Sachs Group Inc. and Morgan Stanley on Friday. That “unprecedented” block trade — as one portfolio manager described it — prompted talk that a hedge fund or a family office was in trouble and forced to sell. And that the selling may not be over.
Archegos blow-up poses hard questions for Wall Street; Biggest hedge fund collapse since LTCM raises concerns over level of exposure enabled by big banks
Robin Wigglesworth – FT
It is still unclear exactly where Archegos Capital fits into the annals of spectacular hedge fund blow-ups. But the early signs are that it will probably prove the biggest since Long-Term Capital Management’s collapse in 1998.
New York, London Winning Finance Hubs’ Race for Vaccinations
Jinshan Hong – Bloomberg
About 30% of London’s population has had initial shots; City’s rate higher than New York; Hong Kong, Tokyo are behind
The financial capitals hit hardest by Covid-19 are pulling ahead in the race to vaccinate their residents. London has outpaced global peers when measured by the percentage of residents inoculated with at least one dose, while Asian hubs like Hong Kong and Tokyo that recorded fewer infections are lagging far behind, according to the latest data available from each city’s government as of March 24.
Broadridge Extends Capital Markets Franchise with Acquisition of Itiviti
Significantly expands Broadridge’s Capital Markets franchise by extending into the front office and strengthening multi-asset capabilities; Drives additional global scale and enhances its ability to serve global clients; Expected to generate strong returns and be accretive to recurring revenue growth, margins, and Adjusted EPS growth; Positions Broadridge to deliver at higher end of its three-year financial objectives
Significantly strengthening its capital markets capabilities and enhancing its position as a global Fintech leader, Broadridge Financial Solutions, Inc. (NYSE:BR), today announced it has signed a definitive agreement to acquire Itiviti Holding AB (“Itiviti”), a leading provider of trading and connectivity technology to the capital markets industry, in an all-cash transaction valued at EUR2.143 billion (approximately $2.5 billion) from Nordic Capital.
Abu Dhabi Wants to Revolutionize How Middle East Oil Is Sold
Anthony Di Paola – Bloomberg
Emirate to begin trading of Murban crude futures on March 29; UAE’s aim to create oil benchmark underscores wider ambition
Tucked between the Gulf of Oman and a craggy mountain range, the dusty port Fujairah isn’t an obvious base from which to try and revolutionize the Middle East’s oil markets. But on Monday, when Abu Dhabi begins selling futures contracts for its oil and then shipping the barrels from Fujairah, it will mark an aggressive shift by the emirate. It hopes to change the way nearly one-fifth of the world’s crude is priced.
Goldman U-Turn on Hwang Put Bank at Nexus of Margin Call
Erik Schatzker and Sridhar Natarajan – Bloomberg
Bank removed Tiger Cub from blacklist, financed his positions; Goldman has now cut most of its exposure, sees immaterial loss
Bill Hwang, a former hedge fund manager who’d pleaded guilty to insider trading, was deemed such a risk by Goldman Sachs Group Inc. that as recently as late 2018 the firm refused to do business with him. Those misgivings didn’t last.
Tiger Cub Hwang’s Family Office Behind Friday Trade Frenzy
Crystal Tse and Sridhar Natarajan – Bloomberg
ViacomCBS and Discovery shares plunged after block trades; Archegos Capital was forced by its banks to sell, people say
The family office of former Tiger Management trader Bill Hwang was behind the unprecedented selling of some U.S. stocks Friday, according to two people directly familiar with the trades. Archegos Capital Management was forced by its banks to sell more than $20 billion worth of shares after some positions moved against him, said the people, who asked not to be named because the details aren’t public. The companies involved ranged from Chinese technology giants to U.S. media conglomerates.
Billions in Secretive Derivatives at Center of Archegos Blowup
Sofia Horta e Costa, Tracy Alloway, and Bei Hu – Bloomberg
Archegos used equity swaps or CFDs, people familiar have said; Instruments are popular with hedge funds, allow non-disclosure
The forced liquidation of more than $20 billion in holdings linked to Bill Hwang’s investment firm is drawing attention to the covert financial instruments he used to build large stakes in companies. Much of the leverage used by Hwang’s Archegos Capital Management was provided by banks including Nomura Holdings Inc. and Credit Suisse Group AG through swaps or so-called contracts-for-difference, according to people with direct knowledge of the deals. It means Archegos may never actually have owned most of the underlying securities — if any at all.
Citadel’s Griffin warns of inflation risk to markets enjoying retail trading boom; Stimulus could jolt inflationary pressures back to life, top hedge fund manager warns
Robin Wigglesworth – FT
The retail stock trading frenzy will reach a new crescendo in the coming weeks thanks to the US government’s stimulus cheques but the inflation this support could ignite represents a threat to the stock market bull run, according to Citadel’s Ken Griffin.
Traders brace after fire sale of stocks linked to Archegos; Block trades captivated Wall St on Friday, leaving focus on remaining exposure at private investment firm
Ortenca Aliaj and Eric Platt and Kaye Wiggins and Katie Martin – FT
Archegos Capital, a private investment firm, was behind billions of dollars worth of share sales that captivated Wall Street on Friday — a fire sale that has left traders scrambling to calculate how much more it has to offload, according to people with knowledge of the matter.
Nomura flags $2 billion loss, cancels bond issue; shares plummet
Makiko Yamazaki, Stanley White – Reuters
Nomura Holdings Inc on Monday flagged a possible $2 billion loss at a U.S. subsidiary, prompting Japan’s biggest brokerage and investment bank to shelve a hefty bond issuance and sending its stock tumbling by the most in over a decade.
Day Traders Miss the Days When Stocks Were Wild and So Much Fun; Individual investors who poured into markets via apps such as Robinhood last year lament the lack of volatility and supersized gains.
Misyrlena Egkolfopoulou – Bloomberg
The thrill is gone. A year into a pandemic that sent stocks plunging then soaring, individual investors are confronting a market that’s offering up smaller gains and fewer wild swings in everything from meme stocks to SPACs and social-media friendly ETFs. “Last March’s madness was some of the best fun I’ve ever had,” said San Xie, 32, a trader based in Maryland, referring to the extreme volatility in stocks last year as the world went into Covid-19 lockdowns. “It’s much slower these days.”
Junior Banker in Parents’ Attic Shows Why Industry Is in Uproar; The pandemic is exposing the rigors of Wall Street life, and the industry’s struggle to attract and retain talent
Jennifer Surane and Hannah Levitt – Bloomberg
The moment his eyes blink open, Maninder Sachdeva pulls his glowing phone to his face and skims emails. He promptly sits up, slides to a small desk by his bed and starts his workday. Sachdeva is a first-year analyst at JPMorgan Chase & Co.’s investment bank in London — or more precisely, in an attic bedroom at his parents’ home, working on a laptop while also video blogging his 16-hour workday. He starts by responding to emails, jots a to-do list, calls a colleague. Then he puts on jeans.
Morningstar unleashes robots to write fund research; Computer-generated commentary to be rolled out on thousands of mutual funds and ETFs
Michael Mackenzie – FT
Robots are being let loose to write investment reports for Morningstar, the research house that helps investors choose among thousands of mutual and exchange traded funds for saving and retirement.
Wall Street Bonuses Rose 10% in 2020, N.Y. Comptroller Says
Jennifer Surane – Bloomberg
The payments are in line with the state’s projections; ‘Near-record year shattered all expectations,’ DiNapoli says
The average Wall Street bonus climbed 10% last year as the coronavirus pandemic fueled market volatility and a surge in underwriting. The typical bonus paid to employees in New York’s securities industry climbed to $184,000, according to calculations by New York State Comptroller Thomas DiNapoli. That was in line with the state’s projections, meaning the city will likely meet or exceed its income-tax revenue projections in its fiscal 2021 year.
UK and EU reach post-Brexit agreement on financial services; The agreement follows months of stalemate in discussions between the two entities regarding UK-EU equivalence across the financial markets.
Annabel Smith – The Trade
The UK and the EU have reached an agreement in a move that could pave the way for future market access rights for the UK following Brexit. The HM Treasury confirmed in a statement on 26 March that technical discussions on the text of the agreement, known as a memorandum of understanding, have now been concluded.
City of London grasping that EU will be closed for financial services, says lawmaker
Huw Jones – Reuters
There is a growing realisation that Britain should not wait for unlikely European Union access for financial services but get on with building a more competitive City of London, a senior lawmaker said on Thursday. Britain left the bloc’s orbit in December and its new trade deal with the EU does not include financial services.
House Prices Are Inflating Around the World; Pandemic-related stimulus, ultralow rates and changes in buyer behavior are turbocharging markets from Europe to Asia
Mike Cherney and Patricia Kowsmann – WSJ
As the U.S. housing market booms, a parallel rise in residential real-estate prices across the world from Amsterdam to Auckland is raising fears of possible bubbles and prompting some governments to intervene to prevent their markets from overheating. Policy makers were already worried about high property prices in parts of Europe, Asia and Canada before the pandemic, especially as years of low interest rates kept demand strong.
The Start-Up Enemies of Wall Street Are Booming; Times are flush for young tech companies like Stripe and Coinbase, which are having a moment as they upend the financial establishment.
Erin Griffith – NY Times
In 2009, Shamir Karkal and several colleagues struggled to raise money for a banking start-up, Simple. Most of the 70 venture capital firms they met over the course of a year didn’t see the point of the idea, he said. The few that did thought it would fail.
U.S. Farmers Vie for Land as a Grain Rally Sparks Shopping Spree; Rising prices for farmland sideline many smaller growers; ‘it’s a real kick in the shorts’
Jesse Newman – WSJ
In a resurgent American Farm Belt, the hottest commodity around is dirt. Across the Midwest, prices to buy and rent farmland are climbing as demand is driven by rallying grain markets, historic government payments and low interest rates, according to economists, agricultural lenders and land managers.
Pandemic Accelerates Retirements, Threatening Economic Growth; Nearly 1.5 million over-55-year-olds exited the job market as recession, virus weighed on opportunities
Amara Omeokwe – WSJ
The proportion of older workers participating in the labor force is hovering at its worst level since the onset of the coronavirus pandemic, raising the prospect that many of these Americans may have permanently left the workforce, potentially impairing future economic growth. The labor force participation rate—the proportion of the population working or seeking work—for Americans age 55 and older has fallen from 40.3% in February of 2020 to 38.3% this February—representing a loss of 1.45 million people from the labor force.
China Helped Rev Up, and Then Slow Down, the Global Commodities Boom; Prices of industrial metals that go into batteries and electric vehicles have fallen from records, as China eases buying and oversupply worries grow
Chuin-Wei Yap – WSJ
A bull market in industrial metals that lasted nearly a year is faltering after China started unwinding economic stimulus, underscoring the pivotal role its state-led economy plays in global commodity booms. China last year put some $500 billion in state investment to prop up its pandemic-pummeled economy. The stimulus drew imports of everything from crude oil to steel. With Beijing wanting to be a global leader in clean energy, many in the resources industry viewed the boom as the start of a yearslong growth arc, or “supercycle,” especially among metals crucial to electrification and batteries.
Man Group’s Ellis Says Some Hedge Funds Are Being Too Greedy
Erik Schatzker – Bloomberg
In the never-ending give and take between hedge funds and their investors, some managers are simply taking too much. Says who? Surprisingly, a hedge fund manager — one of the biggest, in fact. “It’s really important that most of the alpha goes to the clients,” Luke Ellis, who oversees about $124 billion as chief executive officer of Man Group Plc, said in a Bloomberg “Front Row” interview. “The client is the one taking all the risk, and the client should get the majority of the rewards.”
Indigenous Australians Are Skeptical About Covid-19 Vaccines, and They’re Hard to Reach; Nearly 150,000 Aboriginal people live in remote areas of the country where severe health problems are common and medical care is limited
Rhiannon Hoyle – WSJ
To reach indigenous clans in northern Australia, vaccinators must navigate monsoon rains that can ground aircraft and waterways infested with crocodiles. Once they reach communities, they face another tough challenge in convincing those groups to accept the shots.
Europe warns hospitals at ‘breaking point’ as third Covid wave hits; Germany, France and Poland report soaring infection and death rates amid slow vaccine rollout
Erika Solomon and Ben Hall – FT
European governments have warned that their hospitals are at risk of being overwhelmed by Covid-19 cases as leaders struggle to get a grip on the pandemic after a week of ill-conceived lockdown measures and recriminations over the EU’s slow vaccine rollout.
Mexico Says Excess Deaths in 2020-21 Have Exceeded 417,000
Nacha Cattan – Bloomberg
Deaths above expected levels double official Covid fatalities; Overstretched health systems and a shortage of testing
Excess deaths in Mexico for 2020 and early 2021 exceeded 417,000, more than double the current official number of fatalities from the coronavirus, the federal government reported. On Thursday Mexico became the third country with more than 200,000 confirmed Covid-19 deaths, trailing only U.S. and Brazil, countries with much larger populations.
Younger Brazilians Are Dying From Covid in an Alarming New Shift
Martha Viotti Beck, Julia Leite, and Caroline Aragaki – Bloomberg
Hospitals are seeing a big rise in deaths of those under 50; Risk factor has gone from “being older” to “being Brazilian”
Staggering under its worst period of the pandemic, with daily records of caseloads and deaths, Brazil is facing a daunting development: a rising number of deaths among the young.
Care for Dying With Human Touch an Enduring Casualty of Pandemic; Low paid and unglamorous in the best of times, hospice care jobs go begging as workers find safer employment elsewhere
David R Baker and Dina Bass – Bloomberg
Never has there been a greater need for hospice care than during the deadly pandemic that has killed more than half a million Americans. But Covid-19 has disrupted almost every aspect of comforting the terminally ill at the end. Even as vaccinations roll out across the country, the system remains under unprecedented strain. As infection rates and hospitalizations plateau and, in some regions, rise after months of improvements, pressures on hospice care are unlikely to ease anytime soon.
Philippine Capital Returns to Lockdown as Vaccinations Lag
Clarissa Batino and Andreo Calonzo – Bloomberg
Duterte may announce late Monday if lockdown to extend: Roque; Philippine stocks rose after weak start, peso up on Monday
The Philippines’ key economic area plunged back into another lockdown for a week starting Monday as the Southeast Asian nation faces its worst coronavirus surge and a slow vaccine rollout. Metro Manila and the adjacent provinces of Bulacan, Cavite, Laguna and Rizal were placed under enhanced community quarantine or ECQ, the nation’s strictest classification of movement curbs, from March 29 to April 4. A curfew from 6pm to 5am will be imposed during the lockdown.
Hong Kong to Allow 14-Day Quarantine From Low-Risk Destinations
Jinshan Hong and John Cheng – Bloomberg
City allows swimming pools, beaches to reopen from Thursday; Hong Kong to restart negotiations over air travel bubbles
Hong Kong will shorten mandatory hotel quarantine to 14 days, down from 21, for people coming from low-risk areas including Singapore, Australia and New Zealand, as the city works to reopen its pandemic-battered economy.
Biden admin remakes vaccine strategy after mass vaccination sites fizzle; The federal government has found that Americans prefer vaccination at pharmacies over expensive mega-sites.
Erin Banco – Politico
The Biden administration is rethinking a costly system of government-run mass vaccination sites after data revealed the program is lagging well behind a much cheaper federal effort to distribute doses via retail pharmacies.
No ‘consistent rationale’: Why vaccinations are open to all in some states and not others
Maureen Groppe – USA Today
When Alaska led the nation in offering COVID-19 vaccinations to all adults earlier this month, officials could point to the state’s vaccination pace – the best in the country.
U.S. Officials Air Concerns About WHO’s Covid Origin Report
Ros Krasny and Tony Czuczka – Bloomberg
Officials say China may have had a hand in writing the report; Blinken says focus should be on building a stronger system
Sign up here for our daily coronavirus newsletter on what you need to know, and subscribe to our Covid-19 podcast for the latest news and analysis. Top Biden administration officials on Sunday expressed concern about the way a pivotal report examining the origins of the Covid-19 pandemic was crafted, including the possibility that the Chinese government had a hand in writing it.
Special Report: How a coronavirus variant tore through an English island and onto the world stage
Andrew MacAskill, Andrew R.C. Marshall – Reuters
Warm weather brings tourists to the Isle of Sheppey, a flat, marshy island near the mouth of the River Thames. Each summer, they fill Sheppey’s many caravan parks or flock to villages with seaside attractions geared toward old-school British tourists: pubs and penny arcades, mini-golf and fish and chips.
Covid Keeps Spreading Death Where Vaccines Haven’t Reached
Todd Gillespie – Bloomberg
Just over half a billion vaccine doses have been given; Major countries including Brazil and India still face hurdles
We’re tracking the latest on the coronavirus outbreak and the global response. Sign up here for our daily newsletter on what you need to know. If you’re living in Israel, the U.S. or the U.K., where vaccination programs are rolling out with remarkable speed, glimpses of a post-pandemic future are starting to appear: Schools have mostly reopened, family gatherings are being planned and summer vacations may be just over the horizon.
Exchanges, OTC and Clearing
ICE Marks Historic Milestone in Global Energy Markets As The World’s First Murban Crude Futures Contracts Are Launched on ICE’s New Exchange in Abu Dhabi
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading global provider of data, technology, and market infrastructure, today announced the launch of ICE’s newest exchange, ICE Futures Abu Dhabi (“IFAD”), and ICE Murban Crude Oil futures, the world’s first Murban futures contract. IFAD is being launched with the Abu Dhabi National Oil Company (ADNOC) and nine of the world’s largest energy traders including BP, ENEOS, GS Caltex, INPEX, PetroChina, PTT, Shell, TOTSA (Total) and Vitol.
ICE Futures Abu Dhabi Recognized as an Overseas Investment Exchange by UK’s Financial Conduct Authority
Intercontinental Exchange, Inc.
Intercontinental Exchange, Inc. (NYSE:ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listings services, today announced that ICE Futures Abu Dhabi (“IFAD”), ICE’s new exchange in Abu Dhabi, has been recognized as an overseas investment exchange by the UK’s Financial Conduct Authority. This recognition ensures that UK-based traders can access IFAD markets and trading in ICE Murban Crude Oil Futures and 18 related cash settled derivatives and inter-commodity spreads launching on March 29, 2021.
Ørn Software lists on Euronext Growth Oslo
The Norwegian software company Ørn Software has today been admitted to trading on Euronext Growth (ticker code: ORN). Ørn Software is a Nordic provider of SaaS (Software as a Service) solutions enabling efficient operations and maintenance across a wide range of asset-heavy industries.
Frøy listed on Oslo Børs
The aqua service provider Frøy has today been listed on Oslo Børs (ticker code: FROY). Frøy is a Norwegian provider of salmon farming services with an operational track-record of more than 20 years.
STOXX Indices to Underlie New Total Return Futures on Eurex
The TRFs on the EURO STOXX Banks Index and EURO STOXX Select Dividend 30 Index will be listed on Mar. 29. TRFs have seen strong demand from banks selling structured products and other market participants, as a way to efficiently gain exposure to price-plus-dividend returns of shares and indices.
Equity Index Derivatives: Introduction of Total Return Futures on FTSE 100 Index (Update)
This circular contains an update of the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland with respect to the Day Count Convention ACT/365 for FTSE 100 Index Total Return Futures, with effect from 29 March 2021.
Collaborations are to drive Eurex’s TRF segment
Having launched the TRF segment in 2016 as a pioneering example within the futurization theme, Eurex has since managed to migrate over 50 per cent of the EURO STOXX 50 OTC market to its product. The current open interest stands at 1.5 million contracts. Now Eurex is extending its strategically important index segment by collaborating with two leading index providers: FTSE Russell and STOXX. Randolf Roth, Member of the Eurex Executive Board, explains the important role of the TRF segment and the strategy behind the cooperations.
Franklin Wireless Approved for Nasdaq Listing
Franklin Wireless Corp. (OTCQB: FKWL), a market leader in broadband data communications, has received approval to uplist to the Nasdaq Capital Market®. The company’s common stock will commence trading on the exchange at the opening of the market Monday, March 29, 2021, under the same symbol, “FKWL”.
OTC IRS and FX – Emerging Markets Discounting and Price Alignment Transition
Please be advised that CME Clearing has successfully completed the Emerging Markets Interest Rate Swaps (“IRS”) and Over the Counter Foreign Exchange (“OTC FX”) Products Discounting Transition and Price Alignment processing in accordance with the process set out in Clearing Advisory 21-087. All USD-settled and MXN OTC IRS and OTC FX products have been transitioned to SOFR-based discounting and price alignment. All EUR-settled OTC FX products have been transitioned to EURSTR-based discounting and price alignment.
Review of Collateral Haircuts – Effective March 26, 2021
In conjunction with the regular review of market volatility to ensure adequate collateral coverage, please review the advisory for acceptable collateral and haircuts for CME Clearing.
Amendments to the Termination of Trading Rule and Holiday Schedule for Three (3) Argus Saudi Aramco Liquefied Petroleum Gas Futures Contracts
Fintech firm Broadridge to acquire trading technology provider Itiviti for over EUR2 billion
Steffy Bogdanova – Leaprate.com
Fintech firm Broadridge Financial Solutions, Inc. today announced the acquisition of Itiviti, a provider of trading and connectivity technology to the capital markets industry, from Nordic Capital. Broadridge and Itiviti have signed a definitive agreement for all-cash transaction. The deal is valued at EUR2.143 billion (approximately $2.5 billion).
Broadridge secures deal to acquire Itiviti for $2.5 billion; Itiviti serves 24 global investment banks and over 2,000 brokers, trading firms and asset managers in 50 countries.
Annabel Smith – The Trade
Broadridge Financial Solutions is set to acquire trading technology provider in a $2.5 billion deal that will expand its capital markets business and global footprint. The FinTech firm has entered into a definitive agreement for the all-cash acquisition that is expected to close in the fourth quarter this year, subject to regulatory approval.
Washington, Texas, Florida Top New Ranking of Innovation Hubs; VC investor Tim Draper says U.S. remains a leader in promoting innovative tech, though Singapore, Hong Kong and Switzerland are closing the gap
Angus Loten – WSJ
Washington, Texas and Florida are the best states to launch a technology startup, beating California’s Silicon Valley, according to a new index that ranks the vitality of national and global innovation hubs. The U.S. remains a leader world-wide in promoting innovative technology, though Singapore, Hong Kong and Switzerland are closing the gap, according to the findings.
Robinhood Trader’s Battle Cry: ‘It’s All Just a Game to Me’; Traders who boast about their own cluelessness are upending the traditional investing hierarchy. It probably won’t last.
Jason Zweig – WSJ
This isn’t a bull market or a bear market. It’s a know-nothing market. Bragging rights used to go to those investors who worked the hardest at learning the most. Now the glory often goes to those who know the least and don’t even care. That has turned the traditional investing hierarchy upside down, although it probably won’t last.
Morningstar unleashes robots to write fund research; Computer-generated commentary to be rolled out on thousands of mutual funds and ETFs
Michael Mackenzie – FT
Robots are being let loose to write investment reports for Morningstar, the research house that helps investors choose among thousands of mutual and exchange traded funds for saving and retirement. At a time when the finance industry is debating the workloads of its staff during a boom in activity and a disruptive pandemic, Morningstar has found a way to increase its written research without further taxing its army of human analysts.
The Market Plumbing Behind the Meme Stock Frenzies
Nick Baker – Bloomberg
Learning about financial market structure can make for sleep-inducing reading. But stock market plumbing became a topic of global interest earlier this winter amid an investing frenzy on social media. GameStop Corp.’s social-media-fueled surge was underpinned by changes in how brokerages make their money, and it was halted by old rules on how much collateral they need to keep on hand. So here’s a guide to some of the most important concepts to inform your next Reddit debate.
Zoom, Other WFH Tech Darlings, Risk User Exodus as the World Reopens; Some internet companies are already losing mobile users in the post-pandemic recovery, while other services are sticking
Brody Ford – Bloomberg
Many internet companies posted record performance during the pandemic as consumers turned to apps and other cloud software to work, study, socialize and shop from home. But as vaccines roll out and restrictions relax, some of this unprecedented digital demand is fading.
SoFi Joins Robinhood in Plotting Early IPO Access for Retail Investors
Annie Massa – Bloomberg
Brokerages looking at new way for customers to invest; There’s no word yet on whether regulators approved the plans
It used to be the ultimate Wall Street insider deal: Buy into the latest hot company before its shares start trading. Now, at least two retail brokerages are looking at giving their customers early access to initial public offerings and the opportunity to buy shares at the same time as professional asset managers.
US buy-side firms struggle to see benefit of new rules for electronic treasury venues; Research by Greenwich Associates found that only 44% of US buy-side firms thought the SEC’s proposed ruling on electronic treasury trading venues would benefit the market.
Annabel Smith – The Trade
Only 44% of US buy-side firms agree that proposed rules for electronic treasury trading venues to increase transparency will be beneficial for the market, research by Greenwich Associates has found.
Crypto Shadow Banking Explained and Why 12% Yields Are Common
Matthew Leising – Bloomberg
A severe lack of dollars is fueling double-digit interest; Bitcoin basis trade between spot and future drives disparity
A swathe of shadow banks in the $1.6 trillion cryptocurrency market have figured out how to generate returns of 12% with minimal risk: Lend U.S. dollars to hedge funds so they can buy Bitcoin. Some of the largest non-bank firms in cryptocurrency including BitGo, BlockFi, Galaxy Digital and Genesis are stepping up to meet investor demand for dollars amid a long-standing weariness by banks to lend to individuals or companies associated with Bitcoin and other digital assets. In this case, they’re lending to hedge funds that need cash to buy Bitcoin for a trade that is almost guaranteed to pay out at annualized returns that have recently hit 20% to 40%.
Microsoft Launches Decentralized Identity Platform ION On Bitcoin’s Blockchain
Samyuktha Sriram – Benzinga
Microsoft Corporation’s (NASDAQ: MSFT) decentralized identity platform ION is now live on the Bitcoin blockchain. What Happened: After four years in the making, the layer two network was successfully deployed on the Bitcoin mainnet, according to the company’s recent announcement. “We have deployed an ION node to our production infrastructure and are working together with other companies and organizations to do so as well,” said Daniel Buchner of Microsoft’s Decentralized Identity team.
Duke University’s Early Coinbase Investment Could Now Be Worth $500M: Sources
Ian Allison – Coindesk
The endowment fund of Duke University, the alma mater of Coinbase co-founder Fred Ehrsam, was one of the fortunate few to have made an early investment in the soon-to-list cryptocurrency exchange, CoinDesk has learned. Two people familiar with the matter said the $3.9 billion Duke Endowment was included early on in the cap table of Coinbase, which is expected to command a price tag of around $100 billion when its shares debut on Nasdaq. Those shares are now worth a small fortune, on the order of nine figures, the sources said.
How to Be Smart About Taxes on Bitcoin; Savvy cryptocurrency investors can lower their capital-gains obligations. Heedless ones are asking for trouble.
Alexis Leondis – Bloomberg
Are you among the estimated 15% of Americans who own digital currency? If you sold or traded it last year, you’re probably sitting on big gains, and those will come with hefty tax bills. There are smart ways to manage those obligations, and not-so-smart ones, too.
Blockchain forensics startup Chainalysis raises $100 million at $2 billion valuation
Anna Irrera – Reuters
New York-based Chainalysis, a startup that allows companies and government agencies to analyse and investigate blockchain transactions, said on Friday it had raised $100 million from investors at a valuation of more than $2 billion.
Digital Currencies Jump as Visa Pilots Crypto Settlement
Jennifer Surane – Bloomberg
Visa says payments network will use a stablecoin backed by USD; Bloomberg Galaxy Crypto Index rises most in three weeks
Bitcoin and other cryptocurrencies rose after Visa Inc. said its payments network will use a stablecoin backed by the U.S. dollar to settle transactions, as blockchain technology gains more acceptance in the established financial system.
Pete Davidson explains NFTs in another amazing Eminem parody on ‘SNL’
Adam Rosenberg – Mashable
Pete Davidson is really carving out a place for himself as Saturday Night Live’s premiere Eminem impersonator. After recently taking on the rap star’s “Stan” in a sketch that laid into the futility of shopping for a PlayStation 5, Davidson is back now with a new version of “Without Me” that turns its attention to another hot tech story of the moment: NFTs.
Insurers Come to Crypto’s Wild West Promising 50% Plus Returns
Olga Kharif – Bloomberg
Developers are selling protection against hacks of DeFi apps; Investors can pool funds to provide coverage for specific apps
Adventurers in what is perhaps the most lucrative and risky corner of the cryptocurrency world are starting to see a bit of a safety net. In the past year, scores of investors big and small have poured billions into decentralized-finance applications that allow users to lend, borrow and trade crypto without intermediaries like banks. While the DeFi sector is booming, it has also been plagued by hacks, fraud and a copy-and-paste coding culture where a modified app can siphon away users from an established rival.
Visa now settles payments in USDC stablecoin on Ethereum blockchain
Yogita Khatri – The Block
Visa announced Monday that it now settles payments in the USDC stablecoin on the Ethereum blockchain. The development means Visa has become the first major payments network to use stablecoin as a settlement currency. Until now, Visa settled payments in fiat currencies only. For its new USDC settlement capability, Visa is initially working with Crypto.com as part of a pilot program, letting the crypto firm manage its card business now entirely in digital assets.
Square CFO Says There’s ‘Absolutely a Case’ for All Balance Sheets to Have Bitcoin
Sebastian Sinclair – Coindesk
The chief financial officer (CFO) of payments giant Square, Amrita Ahuja, believes more companies need to get on board with cryptocurrency. In an interview with Fortune Magazine’s new CFO newsletter on Sunday, Ahuja said her company sees bitcoin and cryptocurrency as “expanding access to financial services” particularly on a global scale. “There’s absolutely a case for every balance sheet to have bitcoin on it,” said Ahuja in relation to user adoption and an emerging trend by large firms to pick up the nascent asset class.
How Arizona Won the Weed Legalization Race; Four states voted to legalize recreational cannabis in November. Only one is selling it so far.
Valeriya Safronova – NY Times
PHOENIX — When Arizonans voted to legalize recreational cannabis in November, it seemed plausible that sales would begin sometime in the spring. But on Jan. 22, less than three months after the vote, the Arizona Department of Health Services started quickly approving applications, allowing dispensaries to sell cannabis to adults 21 and older immediately.
New York to Expunge Convictions With Marijuana Legalization
Keshia Clukey – Bloomberg
Bill to legalize recreational pot would erase previous records; Legislation would allow grow-your-own and delivery services
Marijuana convictions would be erased with the stroke of the New York governor’s pen under a pot legalization bill ready for a vote this week in the state Legislature. The measure (S.854A /A.1248A), details of which were released late Saturday, calls for the automatic expungement of records for people with previous convictions for activities that would no longer be criminalized when marijuana is legalized for use by adults 21 and older.
U.S. Senate Democrats aim to undo Trump-era shareholder voting rights rule
Katanga Johnson – Reuters
U.S. Senate Democrats on Friday introduced a resolution to rescind a rule they say curbs shareholder voting rights, their second move aimed at unraveling business regulations introduced by former President Donald Trump’s administration.
Andrew Bailey refuses to back down in row with former judge over LCF; Letters released on Friday show dispute between BoE governor and Dame Elizabeth Gloster simmers on
Chris Giles – FT
The Bank of England governor Andrew Bailey has refused to back down in his public dispute with a former Court of Appeal judge over criticism of his response to a report on the £236m collapse of London Capital & Finance.
U.K. Man Must Pay $571 Million Over Stolen Bitcoin, CFTC Says
Matt Robinson – Bloomberg
Benjamin Reynolds took more than 20,000 tokens, agency says; Current whereabouts unclear; he didn’t respond to CFTC suit
A U.K. man accused of scamming consumers into sending him more than 20,000 Bitcoin has been ordered to pay $571 million in penalties. But collecting the money could be tough because U.S. authorities don’t seem to know where the alleged fraudster, Benjamin Reynolds, is. The Commodity Futures Trading Commission announced the sanctions in a Friday statement, saying a March 2 order issued by a federal court in Manhattan required Reynolds to pay a $429 million fine and almost $143 million in restitution.
Federal Court Orders UK Man to Pay More Than $571 Million for Operating Fraudulent Bitcoin Trading Scheme
The Commodity Futures Trading Commission today announced that the U.S. District Court for the Southern District of New York entered a default judgment against Benjamin Reynolds, purportedly of Manchester, England, finding that he operated a fraudulent scheme to solicit bitcoin from members of the public and misappropriated customers’ bitcoin. This case was brought in connection with the Division of Enforcement’s Digital Assets Task Force.
France Probes Missing Greensill Loan to GFG Smelting Plant
Gaspard Sebag and William Horobin – Bloomberg
Loan to Liberty Aluminium Poitou plant was government-backed; Probe seeks to determine whether a criminal offense occurred
The disappearance of a loan provided by failed startup lender Greensill Capital to a French aluminum smelting plant linked to industrialist Sanjeev Gupta’s GFG Alliance Ltd. is the focus of a preliminary investigation in France. The case relates to a state-backed loan worth about 18 million euros ($21 million) provided to a GFG-owned site, Liberty Aluminum Poitou, in central France, according to local media. Local investigators will seek to determine whether any criminal offense took place, an official from France’s industry ministry said.
ASIC adopts ‘no-action’ position and re-issues guidelines for virtual meetings
ASIC had adopted a ‘no-action’ position in relation to the convening and holding of virtual meetings. This position is a temporary measure. Modifications to the Corporations Act 2001 (Corporations Act) to facilitate the convening and holding of meetings using virtual technology were in place under the Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 (the Determination). The Determination, which temporarily removed impediments to the use of virtual technology to hold meetings and permitted the dispatch of notices of meeting by electronic means, ceased to have effect on 21 March 2021.
House of Representatives Standing Committee on Economics – Opening statement – 29 March 2021
Opening statement by ASIC Chair James Shipton at the House of Representatives Standing Committee on Economics, 29 March 2021, Parliament House, Canberra.
ASIC’s CFD product intervention order takes effect
ASIC’s product intervention order imposing conditions on the issue and distribution of contracts for difference (CFDs) to retail clients takes effect from today. The order strengthens protections for retail clients trading CFDs after ASIC found that CFDs have resulted in, and are likely to result in, significant detriment to retail clients.
ESMA advises the European Commission on the application of sanctions under MiFID II/MiFIR
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes its advice to the European Commission (EC) on the application of administrative and criminal sanctions under MiFID II/MiFIR.
ESMA Updates Q&A on Inducements
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today updated its Questions and Answers on the implementation of investor protection topics under the Market in Financial Instruments Directive and Regulation (MiFID II/ MiFIR).
2021 Advisory Committee Overview and Engagement Notice
FINRA has multiple committees that facilitate effective engagement with its member firms and representatives of the public regarding regulatory and policy initiatives related to FINRA’s mission of promoting market integrity and investor protection in a manner that promotes vibrant capital markets. The purpose of this Notice is to encourage employees of member firms and other interested parties with diverse skills, backgrounds, perspectives, and experiences who will provide innovative feedback and support FINRA’s mission of investor protection and market integrity, to become involved in these committees. Interested individuals should use FINRA’s Engagement Portal to submit an online form to be considered for future committee vacancies.
Holiday Reminder Regarding FINRA Market Transparency Reporting Systems
In observance of Good Friday, FINRA’s Market Transparency Reporting Systems will be closed on Friday, April 2, 2021.
FCA publishes Decision Notice against Jon Frensham for non-financial misconduct
The FCA has published a Decision Notice in respect of Jon Frensham (formerly known as Jonathan James Hunt), an independent financial adviser and the sole director at Frensham Wealth Limited.
FCA publishes feedback to Call for Input on open finance
We have published a feedback statement to our Call for Input on open finance. Open finance refers to the extension of open banking-like data sharing to a wider range of financial products, such as savings, investments, pensions and insurance.
Joint Bank of England and FCA review of open-ended investment funds
The Bank of England and Financial Conduct Authority have published the findings of their joint survey of UK-authorised open-ended funds.
Investing and Trading
Betsy Cohen Has Launched Nine SPACs and Is Still Going;The banking veteran is known for persistence and focus in an area some fear is a fad with newcomers chasing a quick buck
Veronica Dagher – WSJ
Celebrity influencers like Serena Williams, Ciara and Chamath Palihapitiya have jumped on the blank-check-company boom. One of the biggest stars in this white-hot corner of Wall Street is a 79-year-old financier who doesn’t tweet or court the Reddit daytrading crowd. What Betsy Cohen does do is deals—lots of them.
Investors hunt for source of fire sale that sent stocks tumbling; Friday’s block trade selling spree on Wall Street hit several Chinese groups and US media companies
Ortenca Aliaj and Eric Platt – FT
Wall Street traders are hunting for the source of a distressed stock selling spree that caused a sharp slide in several Chinese technology companies and US media groups on Friday. The mysterious share sales, worth almost $19bn, sparked rumours that a hedge fund or family office had blown up and was moving to wind down billions of dollars worth of its positions.
Allianz Studies Hartford Situation After Chubb’s $23 Billion Bid
Jan-Henrik Foerster and Aaron Kirchfeld – Bloomberg
German insurer said to discuss options with potential advisers; Allianz is reluctant to enter pricey bidding war, sources say
Chubb Ltd.’s $23 billion takeover offer for Hartford Financial Services Group Inc. has prompted Germany’s Allianz SE to study the feasibility of a counteroffer, according to people familiar with the matter. Europe’s biggest insurer is discussing its options with potential advisers, said the people, asking not to be identified because the discussions are private. While Allianz views Hartford as one of the remaining property and casualty insurance targets with scale in the U.S., it’s also reluctant to enter into a pricey bidding war with Chubb because of a lack of synergies between the two, the people said.
Mystery Block Trade Erases $3 Billion From GSX Founder’s Fortune
Pierre Paulden and Gillian Tan – Bloomberg
Larry Chen, founder and chairman of GSX Techedu Inc., lost $3.1 billion overnight as American depositary receipts of his online education company tumbled amid a barrage of block trades in some giant Chinese and U.S. companies. Shares in the Chinese firm plunged 42% on Friday after Morgan Stanley managed the trade, according to a person familiar with the matter. Chen’s net worth dropped to $4.2 billion, knocking him from the Bloomberg Billionaires Index ranking of the richest 500 people globally
Block-Trade Bevy Wipes $35 Billion Off Stock Values in a Day
Drew Singer and Gillian Tan – Bloomberg
Chinese ADRs like Baidu and Vipshop swing on high volume; Media stocks ViacomCBS, Discovery also among blitz of deals
An extraordinary spree of block trades on Friday erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media companies. The unregistered stock offerings were said to be managed by banks including Goldman Sachs Group Inc. and Morgan Stanley, according to people familiar with the matter, on behalf of one or more undisclosed shareholders. Some of the trades exceeded $1 billion in individual companies, calculations based on Bloomberg data show.
Bond Investors Are Already Betting on a Return to Normal Life
Tasos Vossos – Bloomberg
Airlines, real estate among best performers in Europe; Aviva warns optimism is overblown if demand problems linger
It wasn’t so long ago that airliners and real estate companies were asking for emergency support and precautionary bank loans. Now investors are desperate to lend them money.
What Investors Need to Know About Those Huge Block Trades; A flurry of block trades wiped billions of dollars off stocks on Friday. Here’s what we know happened.
Emily Cadman – Bloomberg
The moves on Friday were staggering. Major U.S. entertainment companies ViacomCBS Inc. and Discovery Inc. both dropped 27%, their biggest declines ever. In all, $35 billion was wiped off of a range of bellwether stocks. The U.S. listings of Chinese tech giants Baidu Inc. and Tencent Music Entertainment Group were also caught up in the episode. There were also extreme moves in smaller stocks, with the likes of Chinese online education provider GSX Techedu Inc. falling 42%.
The Firm Behind The $30 Billion Firesale Shaking Financial Markets Disclosed Almost Nothing
Antoine Gara – Forbes
Up until recently, the website of Archegos Capital Management, the firm behind a reported $30 billion financial firesale that is battering stocks worldwide, contained a giant image of Central Park. The vista displayed on Archegos’ webpage was a fitting homage to the views of its offices atop a Manhattan skyscraper on 57th street, until the site was taken down as the firm gets liquidated.
More women are turning to investing during the pandemic
Michelle Cheng – Quartz
After getting furloughed by American Airlines, and watching her side gig leading trips outside of the US evaporate overnight at the start of the pandemic, Brittany Floyd felt unsettled. Just prior to the global spread of Covid-19, she had gotten out of a serious relationship that had provided her a comfortable lifestyle. Having lived across every aspect of the income scale—she grew up in a low-income household, where her mother worked as a custodian and her father as a construction worker—she had no intention of going back to a life of financial struggle. “I just can’t do that again,” she says.
SPACs Are the Stock Market’s Hottest Trend. Here’s How They Work; Hundreds of blank-check firms are doing deals or are on the hunt for companies to take public
Value of SPAC IPOs and mergers, monthly
Peter Santilli and Amrith Ramkumar – WSJ
SPACs are the investment of the moment. With interest rates on the floor and investors chasing young companies, this is a dream scenario for SPACs. To know what’s next and how the boom will end, investors need to understand these quirky financial concoctions.
Coronavirus Was Supposed to Drive Bankruptcies Higher. The Opposite Happened; Stimulus checks and other government measures kept many borrowers from bankruptcy last year despite high unemployment, but economists worry it won’t last
Soma Biswas and Harriet Torry – WSJ
The number of people seeking bankruptcy fell sharply during the pandemic as government aid propped up income and staved off housing and student-loan obligations. Bankruptcy filings by consumers under chapter 7 were down 22% last year compared with 2019, while individual filings under chapter 13 fell 46%, according to Epiq data. After holding above 50,000 filings a month in 2019 and in the first quarter of 2020, bankruptcy filings have remained below 40,000 a month since last March when the pandemic hit.
Here’s How the World’s Chip Shortage Is Playing Out for Stocks
Kit Rees, Kurt Schussler, Ceran Wittenstein, and Chiara Remondini – Bloomberg
Tech-heavy autos, consumer-exposed firms could struggle; Chip-equipment stocks are benefiting from increased spending
A global semiconductor shortage has upended the supply of everyday devices from smartphones to gaming consoles to tech-dependent cars. With companies warning the issue may last into the second half, the fallout threatens to weigh on share prices for months to come.
Virtu CEO Doug Cifu Explains Payment for Order Flow and the Future of HFT
Joe Weisenthal and Tracy Alloway – Bloomberg
When the GameStop and Robinhood story exploded at the end of January, suddenly everyone took an interest in market structure and things like payment for order flow, as well as the role that high-frequency trading shops play in enabling free retail trading. This, of course, gave rise to lots of conspiracy theories about ways retail traders are taken advantage of. On the new Odd Lots, we speak with Doug Cifu, the CEO of Virtu, which is one of the largest HFT shops in the country, to get his perspective on how this part of the market really works.
Environmental, Social and Corporate Governance
As the Shift to Green Energy Speeds Up, Shell’s Big Natural-Gas Bet Is at Risk; The fuel faces growing environmental scrutiny and competition from cleaner energy sources
Sarah McFarlane – WSJ
Royal Dutch Shell RDS.A 2.33% PLC bet big on natural gas as the energy source of the future when it bought BG Group for $54 billion. Five years later, it appears the gas era won’t last long. Falling prices for wind and solar power, coupled with government and businesses’ new green goals, are accelerating a shift to cleaner energy and leaving natural gas—long seen by energy companies as a bridge between fossil fuels and renewables—in the lurch. The fuel is also under growing scrutiny for methane leaks, leading some potential customers to skip gas and move ahead to lower-carbon alternatives.
ESG battles to watch during this year’s AGM season; Investors will be demanding action on issues from climate change to workplace diversity
Attracta Mooney – FT
PepsiCo, Amazon and Citigroup have been named alongside a small group of global companies to watch during this year’s annual meeting season, as investors demand businesses step up on issues from climate change to employing diverse workforces.
Beijing Hit by Sandstorm Again as Pollution Goes Off the Charts
Beijing residents woke up to yellow sky on Sunday morning as northern China was hit by the second sandstorm in less than two weeks. Air pollution readings surged to the upper limit of 500 at 8 a.m., according to data from the city’s environmental monitory center, as visibility was reduced to less than 1,000 meters (3,280 feet) in parts of the city. Concentrations of PM10, the inhalable particles commonly associated with sand and dust, rose to more than 2,000 micrograms per cubic meter at some monitoring stations.
Are Cities Underestimating Carbon Pollution? Greenhouse gas emissions may be worse than we thought. But figuring out the right way to calculate them is complicated.
Camille Squires – Bloomberg
The city of Los Angeles has been collecting data on its carbon pollution footprint for over a decade as a part of its efforts to fight global climate change. In 2017, the city reported that it had reduced greenhouse gas emissions by 40% from 2008 levels, through various changes such as improving electricity usage in traffic lights, energy efficiency gains in buildings and airport design modifications. It turns out that the city’s emissions measurements were off, though – by more than 50%.
What Does the World Need? More Humans; Global depopulation is the looming existential threat that no one is talking about.
Tyler Cowen – Bloomberg
How worried should we be about global depopulation? Some East Asian countries have fertility rates near or even below 1.0, while much of the core population of Europe is shrinking. In the U.S., fertility rates have fallen below replacement rates, hitting a historic low of 1.7 in 2019, and will likely fall even further in 2020 in part due to Covid. Many of the world’s poorer countries are seeing their birth rates plunge at unprecedented rates. By the year 2100, according to one projection, world population growth will be practically zero.
Companies Ask Their Customers to Help Them Cut Emissions; Makers of shampoo, detergent and toothpaste are trying to tackle a major source of their carbon emissions by changing consumer habits
Saabira Chaudhuri – WSJ
Take shorter showers, do laundry at cooler temperatures and turn off the tap while brushing your teeth. Those are messages the world’s biggest makers of shampoo, detergent and toothpaste have been pushing as they try to reduce carbon emissions linked to the use of their products.
Goldman Sold $10.5 Billion of Stocks in Block-Trade Spree
Bei Hu, Gillian Tan, and Drew Singer – Bloomberg
Trade was part of a selling spree that erased $35 billion; ViacomCBS, Discovery, Baidu, TME among those hit hard
Goldman Sachs Group Inc. liquidated $10.5 billion worth of stocks in block trades on Friday, part of an extraordinary spree of selling that erased $35 billion from the values of bellwether stocks ranging from Chinese technology giants to U.S. media conglomerates.
Mizuho to acknowledge flaws in system management
The Japan Times
Mizuho Bank will acknowledge flaws in its system management in a report over a series of glitches that the Japanese lender will soon submit to regulators, informed sources said Friday. The report will say that Mizuho failed to fully recognize the impact of glitches that hit parts of its systems, according to its outline. It will say that the four glitches had no direct causal link with each other, according to the outline.
Ex-Citadel exec joins Calamos as COO; Dan Dufresne retired from the hedge fund firm last year after about two decades there.
Dan Dufresne, a former top executive at Citadel LLC who retired from the firm last year, is joining Calamos Investments as chief operating officer. Dufresne’s decision to join the Naperville-based firm is “an affirmation of our recent accomplishments,” Calamos President and CEO John Koudounis said in a statement. His appointment is an “integral step that reinforces the strong foundation” of Calamos, said the firm’s founder, chairman and global chief investment officer, John Calamos Sr..
Wall Street bonuses jump 10% in 2020, says NY state comptroller
The average bonus paid to employees in New York City’s securities industry in 2020 rose by 10% to $184,000, a top New York state financial regulator said in a statement on Friday.”Wall Street’s near-record year shattered all expectations,” New York State Comptroller Thomas DiNapoli said.
Goldman Sachs Is Said to See Immaterial Losses From Archegos
Cathy Chan – Bloomberg
Nomura’s warning of ‘significant’ loss is tied to Hwang’s firm; Investors are hunting for more information on banks’ exposures
Goldman Sachs Group Inc. is telling shareholders and clients that any losses it faces from the unwinding of trades by Archegos Capital Management are likely to be immaterial, a person familiar with the matter said. The New York-based bank’s loans to Archegos were fully collateralized and Goldman was among the first to begin reducing its exposure, the person said, asking not to be identified because the information is private. The bank has exited most of its Archegos-related positions, the person said.
Credit Suisse, Nomura Warn of Financial Hit From Fund Selloff; Swiss bank says it is unwinding positions in relation to trades
Quentin Webb and Margot Patrick – WSJ
A fire sale of stocks from a large U.S. investor slammed global investment bank Credit Suisse Group AG, which said it could incur substantial losses related to the trades. Japanese rival Nomura Holdings Inc. also said it was owed about $2 billion by an unnamed U.S. client.
Concerns grow over ETFs’ illiquid holdings; Funds with large stakes in barely traded stocks could be hit harder in a market downturn
Emma Boyde – FT
The surge in ETF investment is beginning to spark concerns that retail investors will not be able to differentiate between exchange traded funds that own securities which are easy to trade and those that have illiquid holdings.
The great hedge fund rebound from ‘M&A arb-ageddon’; Event-focused investors bet on further jump in corporate deals and restructurings in 2021
Laurence Fletcher – FT
Many hedge funds that bet on corporate events such as takeovers were left reeling last March after an “M&A arb-ageddon”, when a wave of deals fell apart or threatened to. That nightmare month is a distant memory for so-called event-driven funds that are licking their lips at the opportunities they see to bet on corporate deals and restructurings this year.
Commerzbank Nominates New Board Chairman Amid Turmoil at Top
Steven Arons – Bloomberg
Gottschalk is former supervisory board chairman of DZ Bank; Bank says it moved quickly so it can reschedule AGM swiftly
Commerzbank AG nominated Helmut Gottschalk, formerly at DZ Bank AG, to head its supervisory board in an attempt to put a quick end to a leadership crisis that threatens to derail the bank’s reorganization.
Secret-Strategy Funds Struggle to Win Fans in Their First Year
Claire Ballentine – Bloomberg
Active nontransparent ETFs gain $1.2 billion since April 2020; High costs, short track records keep investors from jumping in
They were a hot new thing in an industry known for innovation. But in a year when practically everything on Wall Street boomed, exchange-traded funds that hide their strategies struggled to make a mark. Active nontransparent ETFs — known as ANTs — are touted by proponents as the key to sucking yet more assets from the mutual-fund world. They merge the access and tax advantages of ETFs with the magic of active management, letting stock pickers deploy their investment playbooks without fear of front-running or copycats.
Deutsche Bank can sue Madoff feeder funds over $1.6 billion claims sale
Jonathan Stempel – Reuters
A U.S. judge said on Friday Deutsche Bank AG may sue two offshore funds for allegedly reneging on an agreement to sell the German bank $1.6 billion of claims in the bankruptcy of swindler Bernard Madoff’s namesake firm.
Nomura, Credit Suisse warn on losses after Archegos share dump
Makiko Yamazaki, John Revill – Reuters
Nomura and Credit Suisse warned on Monday they were facing big losses after a U.S. hedge fund, named by sources as Archegos Capital, defaulted on margin calls, putting investors on edge about who else had been caught out.
Funds Bet on a Consumer Boom to Rival ‘Roaring Twenties’
Ishika Mookerjee, Albertina Torsoli, and Lisa Pham – Bloomberg
Fund managers are investing in bricks and mortar, luxury; Analysts see MSCI’s consumer discretionary index climbing 17%
Some of the world’s top money managers are betting on a post-pandemic spending boom that will boost real-world companies as economies reopen and people go back to their normal lives.
Japanese female financial analysts urge change in male-dominated profession
Yuka Nakao – The Japan Times
With the gender gap still large among financial analysts in Japan, women who have blazed a trail in the male-dominated profession are calling for changes in the industry’s punishing workstyle as well as an end to what they see as society’s deep-rooted bias. “I think Japanese firms (in general) must work to increase the number of women, and the financial industry especially lags” behind other sectors, said Rie Nishihara, a senior analyst at JPMorgan Securities Japan Co.
Suez Shows Civilization Is More Vulnerable Than We Think; Choke points imperil global supply chains, and the remedies aren’t simple or cheap.
Chris Bryant – Bloomberg
A gust of wind was all it took to bring global container flows and oil shipments to a halt. The errant container ship that blocked the Suez canal this week has cut off a route that handles more than 10% of international trade. Part of this situation was simply unfortunate: Egypt has expanded parts of the canal to enable two-way traffic and accommodate larger carriers. The Ever Given ship went off course and got stuck in part of the waterway that’s still narrow.
What is Going on with China, Cotton and All of These Clothing Brands? A user’s guide to the latest cross-border social media fashion crisis.
Vanessa Friedman and Elizabeth Paton – NY Times
Last week, calls for the cancellation of H&M and other Western brands went out across Chinese social media as human rights campaigns collided with cotton sourcing and political gamesmanship. Here’s what you need to know about what’s going on and how it may affect everything from your T-shirts to your trench coats.
Vegas Sands Probes Money-Laundering Safeguards at Singapore Unit
Chanyaporn Chanjaroen – Bloomberg
U.S. casino sets up committee to review possible breaches; Internal review follows scrutiny by DOJ, Singapore police
Las Vegas Sands Corp. set up a special committee to look into potential breaches of anti-money laundering procedures at its Singapore casino, which has already been the target of probes by U.S. officials and local police.
Australia’s AMP says Ares keen to buy unit’s $1.7 billion private markets business
Troubled Australian wealth manager AMP Ltd said on Monday that Ares Management was interested in a potential buyout of its A$2.25 billion ($1.72 billion) private markets business, nearly a month after the U.S. private equity fund withdrew its takeover bid for the parent company.
Brexiteer living in Spain made to return to UK over deportation fears and people have little sympathy
Greg Evans – Indy100.com
Brits living in Spain are being forced to temporarily return to the UK to avoid being deported from the EU country as illegals and yes, it’s because of something that many of them voted for. Thanks to Brexit, as many as 500 ex-pats are expected to leave Spain in the coming weeks otherwise they will be deemed illegal immigrants unless they wish to become Spanish residents (spoiler: they do not).
Why the Financial Times was ready for the financial crisis, but not Brexit
Oliver Staley – Quartz
From 2005 to 2020, Lionel Barber served as editor in chief of the Financial Times, the London-based broadsheet read by investors, executives, and policy makers around the world. Barber, 66, leveraged his position at the top of the FT to interview a dizzying range of world leaders—including US presidents Barack Obama and Donald Trump, Russia’s Vladimir Putin, Saudi Arabia’s Mohammed bin Salman, and India’s Narendra Modi—as well as CEOs at dozens of the world’s biggest companies. A dedicated note-taker, Barber drew on his recollections of these encounters for his book, The Powerful and the Damned: Private Diaries in Turbulent Times, a brisk and wryly amusing account of his years running the FT.
One in Four Small U.K. Exporters Halt EU Sales Amid Brexit Costs
Camomile Shumba – Bloomberg
One in four small U.K. exporters have halted sales to the European Union because of red tape caused by Brexit, according to a survey published Monday. The polling by the Federation of Small Businesses will add to concern that leaving the EU is further damaging the pandemic-hit economy by reducing trade and increasing costs. Official figures show exports and imports fell sharply after Britain completed its withdrawal from the bloc on Dec. 31. “Three months on from the end of the transition period, what we hoped would prove to be teething problems are in danger of becoming permanent, systemic ones,” said FSB National Chairman Mike Cherry.
Bank of England clamps down on Brexit-driven EU relocations
Stephen Morris and Caroline Binham – FT
The Bank of England is demanding that lenders seek its approval before relocating UK jobs or operations to the EU, after becoming concerned that European regulators are asking for more to move than is necessary for financial stability after Brexit. The BoE has taken this stance — described by one senior banker as “increasingly curmudgeonly” — after hearing of several requests from the European Central Bank that it considers excessive and beyond what is required from a prudential supervisory perspective, according to people familiar with the move. Governor Andrew Bailey has taken a personal interest in the issue, they added.
BOE Intervenes in Lenders’ Post-Brexit Relocations, FT Reports
Lucy Meakin – Bloomberg
The Bank of England is insisting that lenders seek approval before moving U.K. jobs or operations to the European Union, the Financial Times reported Monday. The central bank is concerned European authorities are asking for more relocations than necessary for financial stability after Brexit, the newspaper said without disclosing where it got the information. The BOE has heard of several requests from the European Central Bank that it believes go beyond what is required from a prudential supervisory perspective, according to the FT. The BOE declined to comment when contacted by Bloomberg News.
More than a fifth of small UK exporters have temporarily halted EU sales
More than a fifth of small British exporters have temporarily halted sales to the European Union and 4% have done so permanently, a survey showed on Monday, highlighting problems that have followed the Brexit trade deal.
A trade agreement between London and Brussels that came into force on Jan. 1 has caused disruption and delays for some companies having to deal with new bureaucracy and rules. In the survey by the Federation of Small Businesses (FSB), 30 out of 132 exporters said they had stopped sales to the European Union temporarily, while five reported having done so permanently.
Leon Black Is Stepping Down From His Role as MoMA Chairman
Amanda L Gordon and Sabrina Willmer – Bloomberg
Apollo co-founder has been under scrutiny over Epstein ties; Black told executive committee he won’t stand for re-election
Leon Black, who stepped down this month from Apollo Global Management Inc. after more than a year of intense scrutiny of his ties to convicted sex offender Jeffrey Epstein, is preparing to let go of another prestigious title as he retreats from the glare of public life. Black, 69, has indicated he won’t stand for re-election as chairman of the Museum of Modern Art in New York, according to a person familiar with the decision. The billionaire told the board’s executive committee on Friday, according to the New York Times, which earlier reported the move.