Hits & Takes
MarketsWiki Education World of Opportunity 2019 in Chicago is open for registration. Sign up your interns and newer employees today. The events are on July 16 and 17 and we have a great lineup of speakers.~JJL
CFTC Chairman Chris Giancarlo is a big fan of blockchain. In a speech in Rome yesterday, he said, “Imagine if in 2008 regulators could have viewed a real-time distributed ledger, and, perhaps, been able to utilize modern cognitive computing capabilities to recognize anomalies in market-wide trade activity and diverging counterparty exposures indicating heightened risk of bank failure. And imagine if, that insight would have shown that the $400 billion notional of outstanding credit default swaps written on Lehman Brothers represented under $8 billion in net market exposure to failure of the firm.” Imagine where we’d be today, indeed.~JK
NFA hosted a care package drive to send our troops a “taste of home” as they finish out their deployment. The expressed their gratitude for those who have served and continue to serve the USA.~JJL
The son of a JLN reader, who is studying economics at Bradley University with a minor in management information systems, is looking for a summer internship. The one he had lined up fell through at the last minute. Anyone interested in potentially hiring him for the summer, in Chicago, please give me a shout.~JJL
Matt Scharpf of Eurex is playing at a charity benefit show at Fitzgeralds in Berwyn for a great cause – St Jude Children’s Hospital. He plays at 7:30 PM on Jun 15. Tickets are $20 in advance. For more information, CLICK HERE.~JJL
The Chicago Bar Association’s program, “Futures & Derivatives: Looking Inside a Changing Industry” will be held on June 7, 2019 from 2:00-5:00 p.m. at The Chicago Bar Association, 321 S. Plymouth Ct., Chicago, IL. It is presented by the CBA Futures & Derivatives Committee. Register at www.chicagobar.org/cle or call 312-554-2056.~JJL
FIA’s Lukken: The Power Of Markets And The Markets Of Power
FIA’s President and CEO Walt Lukken today gave opening remarks at FIA’s International Derivatives Expo. Welcome to FIA’s 12th annual IDX conference—the international gathering of our industry to discuss and debate the issues of the day while having a little fun. The week of IDX has a tradition, or some might call it a curse, of attracting unexpected political activity.
***** Walt Lukken is on a bit of a power trip. The Power of Markets is the big new theme he is promoting on his travels.~JJL
FIA Speaks – Episode 2: Doc Sandor (Podcast)
The “father of financial futures” and Futures Hall of Fame member Richard “Doc” Sandor talks about a lifetime in the futures industry, how markets can address climate change and the rise of China with FIA President and CEO Walt Lukken.
***** When Richard Sandor speaks, I listen.~JJL
Don Wilson plans 307-room hotel near City Hall; The trader and developer’s real estate company is seeking the city’s approval for the 13-story hotel on an unused parking lot at 180 W. Randolph St., across the street from the Hotel Allegro.
Alby Gallun – Crain’s Chicago Business
After building hotels in the Gold Coast, Streeterville and Bucktown, Chicago trader and developer Don Wilson plans another one in the Loop, just a block west of City Hall.
***** I bet you can pay for your room with bitcoin.~JJL
5 Questions with Mark Phelps, G. H. Financials Group CEO
Brian Mehta, CMO – TT
Mark Phelps has earned a sterling reputation in the futures industry by driving business at many levels throughout his career. His path to Group Chief Executive Officer at G.H. Financials Limited began over 20 years ago as a pit official at The London International Financial Futures and Options Exchange, LIFFE. Along the way, Mark has successfully built strong business relationships among prop shops that have been a leading source of liquidity for major futures exchanges across the globe.
****G.H. Financials is a great story.~JJL
Monday’s Top Three
Our top read story of the day was The Trade’s Trading Technologies expands access to Chinese derivatives markets, about TT’s foray into the Chinese markets. Second was Jim Kharouf’s JLN piece Craig Pirrong: The Streetwise Professor Waxes Poetic on Dodd-Frank, Elizabeth Warren’s Dog House and LNG Potential. Yes, Senator Warren really dislikes the mild-mannered professor. Third was a top three piece from Friday, The Trade’s CME shakes up leadership of former NEX business lines
153,738,058 pages viewed; 23,774 pages; 219,770 edits
Wall Street Is Desperate for Wonks Who Can Explain the Rise of Populism; Blindsided by Trump, investors are turning to Washington analysts to understand how volatile politics might affect their portfolios.
Craig Torres – Bloomberg
Better Markets, a left-leaning Washington think tank, describes itself as a watchdog over Wall Street. Nowadays, many of the people seeking its advice are Wall Streeters themselves.
Finance Billionaire Ken Griffin’s Citadel Securities Trading Firm Is On A Silicon Valley Hiring Binge
Nathan Vardi – Forbes
Stuart Feldman has played a prominent role in the evolution of the computer industry. He wrote Make, a key software program for Unix operating systems, and developed the first 77 compiler for the Fortran programming language. He went on to become vice president of engineering at Google.
NY Fed pushes banks to step up preparation for Libor’s demise; ‘Take the warnings seriously,’ says one of Fed’s top policymakers
Robin Wigglesworth – FT
One of the Federal Reserve’s top policymakers has urged the finance industry to ramp up preparations for the end of Libor, saying speculation that the world’s most influential interest rate benchmark might survive beyond 2021 is fanciful.
Bond traders swap phones for new technology as market catches up
Tommy Wilkes, Dhara Ranasinghe – Reuters
Carl James became a trader when he was 19, in the boisterous telephone dealing rooms of the 1990s. Now, he and his colleagues at Pictet Asset Management are about to start learning computer coding to help them understand the technological changes sweeping through one of the final frontiers of ‘old-style’ trading.
Woodford blocks investor withdrawals after loss of key client; Freeze on redemptions underlines precarious position of high profile manager
Peter Smith, Kate Beioley and Owen Walker – FT
Neil Woodford has blocked redemptions from his £3.7bn equity income fund after serial underperformance led to an investor exodus, inflicting a serious blow to the reputation of the UK’s highest-profile fund manager.
Feds target four of the biggest tech companies in U.S., and their stocks are getting slammed
Jon Swartz – MarketWatch
A federal government crackdown is reportedly targeting Big Tech, leading to severe punishment Monday on Wall Street.
Chinese Crypto Pioneer Pays $4.57 Million for Lunch With Warren Buffett
Olga Kharif and Katherine Chiglinsky – Bloomberg
Justin Sun is the 28-year-old founder of Tronix and Peiwo; ‘Cryptocurrencies will come to bad endings’ Buffett has said
Cryptocurrency pioneer Justin Sun bid a record $4.57 million to have lunch with Warren Buffett, who famously referred to Bitcoin as “probably rat poison squared.”
Congress Opens Bipartisan Probe of Competition in Tech Industry
Billy House and Anna Edgerton – Bloomberg
Democrat leading effort promises ‘very serious’ investigation; Ranking Republican says Congress could ‘take action’ on issue
The House Judiciary Committee is joining the rush to investigate big technology companies, with a focus on whether increased concentration in the industry is crowding out competition and hurting consumers.
Financial Technology Partners (“FT Partners”) Expands Its Senior Team Adding Former JP Morgan Global Head Of Payments And Senior FinTech Banker Mohit Agnihotri As Managing Director
Financial Technology Partners
Financial Technology Partners (“FT Partners”), the only investment bank focused exclusively on FinTech, is pleased to announce the further deepening of its senior team with the addition of Mohit Agnihotri as Managing Director based out of our 25+ strong London office and serving clients globally.
FTI Consulting Appoints Colleen Hsia as Americas Head of Financial Services for the Strategic Communications Segment
FTI Consulting Inc.
FTI Consulting, Inc. (NYSE: FCN) today announced the appointment of Colleen Hsia as a Senior Managing Director and Americas Head of Financial Services in the Strategic Communications segment. She will be based in New York City and report to Brian Kennedy, the segment’s Head of the Americas.
Exchanges, OTC and Clearing
CME Group Reaches Second-Highest Monthly Volume Ever, Averaging 23.9 Million Contracts Per Day in May 2019
CME Group, the world’s leading and most diverse derivatives marketplace, reached average daily volume (ADV) of 23.9 million contracts during May 2019, up 19% from May 2018. Open interest (OI) at the end of May was 143 million contracts, up 24% from year-end 2018 and up 14% from May 2018. OI reached a record 143.5 million contracts on May 23, 2019.
Intercontinental Exchange Appoints John Tuttle Vice Chairman and Chief Commercial Officer of NYSE Group and Michael Blaugrund Chief Operating Officer of NYSE Group
Intercontinental Exchange, Inc. (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that John Tuttle has been appointed Vice Chairman and Chief Commercial Officer of NYSE Group. In this expanded new role, Tuttle will lead commercial outreach and business development of NYSE Group, spearhead its efforts to win the largest IPOs, grow the exchange’s community of 2,300 listed companies, and oversee creation of new offerings for industries such as biotechnology and other growing sectors of the economy.
OCC May Volume Up 13.1 Percent; Index options up 33.2 percent; Futures options up 20.1 percent
OCC, the world’s largest equity derivatives clearing organization, announced today that total cleared contract volume in May reached 464,971,407 contracts, a 13.1 percent increase compared to last May, and the highest total volume for May in OCC’s history. OCC’s year-to-date average daily cleared contract volume is 19,609,615, down 8.0 percent compared to 2018’s record-breaking pace.
Second-Best May in MGEX History
Opening of the exhibition “Deutsche Börse Photography Foundation Prize 2019” at The Cube, Eschborn / Frankfurt
Press tour with Susan Meiselas, Laia Abril and Arwed Messmer on June 13 at 11:00 am / Works by the four finalists of the Deutsche Börse Photography Foundation Prize from June 14 to August 23, 2019 / Parallel to the exhibition “Favorite Pieces – The Staff Selection “on the occasion of the 20th anniversary of the Art Collection Deutsche Börse
EEX Trading Results: May 2019
In May 2019, the European Energy Exchange (EEX) significantly increased trading in Austrian power futures, achieving a volume of 862,481 MWh (May 2018: 52,486 MWh) and thereby completing the shift in liquidity from the former combined DE/AT contract to the current individual DE and AT contracts.
WFE Statement on Promoting Financial Stability and Growth Through International Regulatory Coherence
WFE statement comes as G20 Finance Ministers meet in Japan to discuss market fragmentation
The World Federation of Exchanges (“WFE”), the global industry group for exchanges and CCPs, has today published a statement titled ‘Financial Stability through International Regulatory Coherence’ which discusses cross-border fragmentation arising from unjustified dissonance between jurisdictions’ financial services regimes.
Square Sends Millions of Digital Receipts, Sometimes to the Wrong Person; From surprise gifts to pending divorces, misdirected notifications result in spilled secrets
Peter Rudegeair – WSJ
Teresa Smith hoped she could keep news of her impending divorce a secret, until Square SQ -2.15% Inc. blabbed about it to one of her friends.
Bank of America adds human option to enhance robo investment offerings
Imani Moise – Reuters
(Reuters) – Bank of America Corp is rolling out a new wealth management product that combines automated portfolios with human advice, becoming the latest brokerage to seek to boost business by blending digital with personalized financial planning.
Plato looks to provide market quality metrics for free; Partnership with BMLL Technologies aims to increase transparency and information for market participants and buy-side firms.
Hayley McDowell – The Trade
Not-for-profit group Plato Partnership has announced it is to provide European equity market quality metrics to market participants for free through an agreement with BMLL Technologies.
Itiviti Advances Strategic SSEOMS Migration Initiative, Recruits Linda Middleditch As Chief Product Officer
Itiviti, a world-leading technology and service provider for the capital markets industry, has announced the appointment of Linda Middleditch as Chief Product Officer. An experienced strategy and change management specialist, Linda joins Itiviti from Bloomberg LP, where she most recently was Global Head of SSEOMS Product Management. She has previously held senior product development positions with top-tier investment banks, including Citi and Morgan Stanley.
Open Bets On CME’s Bitcoin Futures Hit Record High
Sebastian Sinclair – CoinDesk
The open interest in CME Bitcoin Futures contract hit a record high last Friday. The total figure of 5,190 for the period between May 27 to June 3 represents the largest number of open interest, or contracts outstanding, in CME bitcoin futures ever and a 7 percent gain on the week prior, according to data from the Commodity Futures Trading Commission.
SEC’s Crypto Savvy Surprises Blockchain Insiders at D.C. Forum
Nikhilesh De – Coindesk
It was billed as an opportunity for the Securities and Exchange Commission to learn more about cryptocurrency. But what was striking about Friday’s forum was how much the agency’s staff already knew.
Facebook consults CFTC about GlobalCoin
The Block Crypto
According to the head of the Commodity Futures Trading Commission (CFTC), the regulator is in “very early stages of conversations” with Facebook about its upcoming stablecoin, the Financial Times writes.
Walmart Follows Pfizer in Joining Blockchain Pharmaceutical Project MediLedger: Report
Helen Partz – Cointelegraph
Global retail giant Walmart is expanding its blockchain expertise by joining blockchain-powered pharmaceutical consortium MediLedger, industry media outlet CoinDesk reports on June 3. Walmart is reportedly planning to roll out a pilot project to track pharmaceutical products using MediLedger technology with the United States Food and Drug Administration in early June.
SC registers three digital asset exchange operators
The Securities Commission has registered three recognised market operators (RMO) to establish and operate digital asset exchanges (DAX) in Malaysia.
John McAfee Says He Is Launching His Own ‘Freedom’ Cryptocurrency
Daniel Kuhn – Coindesk
John McAfee, the famous and infamous security pioneer and cryptocurrency enthusiast, is set to launch his own eponymously named currency, the McAfee Freedom Coin, this fall. A white paper is forthcoming, but on the currency’s webpage, McAfee said that the coin is not subject to relative price setting mechanisms of other fiat currencies or digital assets.
Mexico Is Getting Eight New Cryptocurrency Exchanges
Diana Aguilar – Coindesk
The company Amero-Isatek announced that it will open its first physical cryptocurrency exchange station in Nuevo León, Monterrey on June 21. It will also soon expand into another seven locations across Mexico. Amero-Isatek estimates that it will server over 800,000 cryptocurrency users in Central Mexico. Users of the exchange will trade in Amero, Amero-Isatek’s own cryptoasset. The asset launches on the day of the Nuevo León opening.
Bitcoin Price Hangs In The Balance As Trade War Explodes — What Next?
Tom Rodgers – Forbes
Bitcoin price analysts say now is a pivotal time for the world’s largest cryptocurrency. Equity markets are jittery and capital inflows into crypto are strong as investors try to figure out where to put their money. The price of Bitcoin and other cryptos, while closely intertwined, tend not to correlate to the wider equity or debt markets. Returns are uncertain elsewhere and a bull-running cryptocurrency market is looking mighty attractive right now.
Where Blockchain Adoption By Governments And The Private Sector Stands: An Overview
Caitlin Long – Forbes
On June 5, leaders from government and industry will gather for the annual non-profit ACT-IAC Emerging Technology Forum in Washington, DC. A lineup of state, federal and international leaders will share insights about blockchain technology, both regarding government adoption of it and government regulation of the private sector’s use of it. The event is free of charge for registered government employees.
Mexico Is Getting Eight New Cryptocurrency Exchanges
Diana Aguilar – Coindesk
The company Amero-Isatek announced that it will open its first physical cryptocurrency exchange station in Nuevo León, Monterrey on June 21. It will also soon expand into another seven locations across Mexico.
The Startup Behind Ethereum’s Infamous DAO Has Been Acquired
Daniel Kuhn – Coindesk
Blockchains.com, a blockchain incubation and investment firm, announced today the acquisition of slock.it, a German company with roots in the original development of ethereum.
BitConnect Promoter Wanted Over Another Alleged Crypto Scam
Daniel Palmer – Coindesk
A promoter of the now-shuttered crypto fraud BitConnect has again been charged over a different claimed cryptocurrency scam.
Tron Founder’s Winning $4.5 Million Bid Nets Dinner With Warren Buffet
Daniel Kuhn – Coindesk
Justin Sun, founder of Tron and CEO of peer-to-peer file sharing protocol BitTorrent revealed through tweet that he placed a record-breaking bid of $4.57 million to lunch with crypto-skeptic Warren Buffett as part of the “Oracle of Omaha’s” annual charity auction for the Glide Foundation.
Trump’s Next Trade War Target: Chinese Students at Elite Schools
First trade, then technology — now talent. The Trump administration has started taking aim at China’s best and brightest in the U.S., scrutinizing researchers with ties to Beijing and restricting student visas.
Several Chinese graduate students and academics told Bloomberg News in recent weeks that they found the U.S. academic and job environment increasingly unfriendly. Emory University dismissed two Chinese-American professors on May 16, and China’s Education Ministry issued a warning Monday on the risks of studying in the U.S. as student visa rejections soar.
Trump’s Mexico tariffs leave US business reeling; Knock-on disruption to domestic economy raises expectations of a rate cut
Sam Fleming – FT
America’s business executives are struggling to figure out how the global trading system will be reshaped by Donald Trump’s policies after his decision last week to open a second front in his trade war by targeting Mexico.
Refinitiv blocks articles on anniversary of Tiananmen crackdown; China’s push to suppress mention of the events in 1989 appears to be spreading abroad
Alice Woodhouse, Philip Stafford and Lucy Hornby – FT
Refinitiv removed Reuters stories relating to the 30th anniversary of the crackdown on Tiananmen Square protests from its Eikon terminals on Tuesday, as China’s push to suppress any mention of the events in 1989 appeared to spread to businesses beyond its borders.
Why Trump should be worried about the stock market selloff
Yahoo Finance Video
President Trump’s trade war risks disrupting what historically has been a solid year for stocks: The year before a presidential election with an incumbent running for re-election, such as 2019. Yahoo Finance’s Scott Gamm joined ‘The Final Round’ to discuss.
American taxpayers paid over $90 billion more under Trump tax law
Kristin Myers – Yahoo Finance
Despite the majority of Americans receiving a tax cut, the IRS pulled in close to $100 billion more last year from taxpayers on individual income taxes than it did in 2017, according to new data from the IRS. This is in part thanks to the Treasury Department processing 1.5% more individual returns for 2018 than 2017.
SEC Announces Kevin Zerrusen as Senior Advisor to the Chairman for Cybersecurity Policy
FOR IMMEDIATE RELEASE
U.S. Securities and Exchange Commission
The Securities and Exchange Commission today announced that Kevin A. Zerrusen will serve as Chairman Jay Clayton’s Senior Advisor for Cybersecurity Policy. In this role, Mr. Zerrusen will coordinate efforts across the agency to address cybersecurity policy, engage with external stakeholders, and help enhance the SEC’s mechanisms for assessing cyber-related risks.
Supreme Court denies insider trading appeal by SAC’s Mathew Martoma
The US Supreme Court on Monday rejected an appeal by Mathew Martoma, a former portfolio manager for billionaire Steven A. Cohen, challenging a conviction for insider trading.
We should extend EU bank data sharing to all sectors; Open Banking rules are a model for a broader digital solution
Carlos Torres Vila – FT
Data is now driving the global economy — just look at the list of the world’s most valuable companies. They collect and exploit the information that users generate through billions of online interactions taking place every day. But companies are hoarding data too, preventing others, including the users to whom the data relates, from accessing and using it. This is true of traditional groups such as banks, telcos and utilities, as well as the large digital enterprises that rely on “proprietary” data.
FCA probes alleged Citigroup links in insider dealing case; Regulator passed new information during trial of Walid Choucair and Fabiana Abdel-Malek
Barney Thompson – FT
The UK’s financial regulator is investigating alleged links between a Citigroup employee with access to “price-sensitive information” and a multimillionaire trader who has been named in connection with an insider dealing trial, a court has been told.
FCA confirms new rules for P2P platforms
Following consultation, the Financial Conduct Authority (FCA) is introducing rules designed to prevent harm to investors, without stifling innovation in the peer-to-peer (P2P) sector. When the FCA set its first rules for P2P, it committed to keep these under review as the sector evolved. These new rules are designed to help better protect investors and allow firms and fundraisers to operate in a long-term, sustainable manner.
UK financial regulator clamps down on peer-to-peer investment; Financial Conduct Authority to set limits for retail investors
Nicholas Megaw – FT
Retail investors in the UK will face limits on how much money they can put in peer-to-peer platforms under rules announced on Tuesday, after the financial watchdog grew concerned that consumers were risking huge losses by investing without sufficient understanding.
Remarks of Chairman J. Christopher Giancarlo at Commissione Nazionale per le Societa e la Borsa (CONSOB), Rome, Italy; “The New Futurism: 21st Century Financial Markets, Technology and Regulation”
I am delighted to join all of you today. My thanks to [Chairman Paolo Savona,] Dottore Carmine Di Noia and Condirectore Nicoletta Giusto.
CFTC Commissioner Quintenz to Participate in a Panel at the PIFS-HLS China-U.S. Symposium
Commissioner Brian Quintenz will participate in the panel, Non-Bank Engagement in Financial Markets and Financial Product Innovation, at the Program on International Financial Systems and Harvard Law School’s China-U.S. Symposium on Building the Financial System of the 21st Century: An Agenda for China and the United States
CFTC Commissioner Quintenz to Participate in a Fireside Chat at SIFMA-BPI Prudential Regulation Conference
Commissioner Brian Quintenz will participate in a Fireside Chat with SEC Commissioner Hester Peirce at the Securities Industry and Financial Markets Association and the Bank Policy Institute’s 6th Annual Prudential Regulation Conference
SEC Announces Enforcement and Investor Education Initiatives to Protect Teachers and Military Service Members
The Securities and Exchange Commission today announced two new initiatives that will build on its ongoing efforts to protect retail investors. The Teachers’ Initiative and the Military Service Members’ Initiative will build on the Commission’s past efforts and focus additional enforcement and investor education resources on behalf of teachers, veterans, and active duty military personnel stationed domestically and abroad.
SEC Seeks Emergency Relief to Halt Ponzi Scheme Run From College Fraternity House
The Securities and Exchange Commission today announced an emergency action charging a recent college graduate with orchestrating a Ponzi scheme that targeted college students and young investors. The SEC is seeking an asset freeze and other emergency relief.
SEC Awards $3 Million to Joint Whistleblowers
The Securities and Exchange Commission today announced an award of $3 million to whistleblowers whose tip launched the SEC’s investigation and subsequent successful enforcement action involving an alleged securities law violation that impacted retail investors. The whistleblowers submitted their tip jointly to the Commission and will share the award. In this case, the whistleblowers also undertook significant and timely steps to have their employer remediate the harm caused by the alleged violations.
Insights on regulatory and market developments in Australia; A speech by Commissioner Cathie Armour at the Australian Regulatory Summit 2019, Sydney, 4 June 2019
Good morning to you all. Thank you for inviting me to speak. Let me begin by acknowledging the Traditional Owners’ ongoing connection to and custodianship of the lands on which we meet today, and pay my respects to elders past, present and future.
ASIC consults on proposals to maintain investor protections by restricting retail offers of ‘stub-equity’ in control transactions
ASIC has today issued a consultation paper seeking feedback on proposals to address concerns with offers of ‘stub-equity’ to retail investors in control transactions.
ASIC charges David Anderson with fraud on Octaviar subsidiary company
Former Chief Financial Officer of Octaviar Limited, Mr David Mark Anderson, of the Gold Coast, Queensland, appeared in Southport Magistrates Court charged with twenty-six counts of fraud under the Criminal Code (Queensland).
ESMA Seeks Investor Protection Experts for Stakeholder Panel
The European Securities and Markets Authority (ESMA) has issued today a call for candidates to renew the composition of its Consultative Working Group (CWG) which advises its Investor Protection and Intermediaries Standing Committee (IPISC).
OTC Transparency Data Issue
Currently, in the Tier 1 5/13/19 weekly report, there is ATS data that is unattributed (that is, there is no ATS name associated with one line of data found in the ATS Data tab). See below:
Investing and Trading
Risky Options May Be Coming to Your 401(k); The Setting Every Community Up for Retirement Enhancement Act of 2019 would eliminate some of the liability for employers who add annuities to the menu of options for their 401(k) plans.
Tara Siegel Bernard – WSJ
Americans may soon see some welcome changes to the rules governing their retirement savings plans, including the ability to contribute to their individual retirement accounts longer or tap them to help pay for the arrival of a new child.
US farmers’ borrowing boom is built on shaky land values; Debt levels approach peak before rural bankruptcy crisis of the 1980s
Gregory Meyer and Robert Armstrong – FT
It was the Red River Valley’s biggest farmland auction in years: several thousand acres of prime Minnesota ground for growing corn, soyabeans and sugar beets. No parcel was unsold when bidding closed.
Coffee supply threat: who gets what in the value chain; Farmers get just 1p from a £2.50 cup, so why is your morning brew so expensive?
Chelsea Bruce-Lockhart and Emiko Terazono – FT
With consumers drinking more coffee than ever before, it should be a great time to be a grower. However, the price of arabica beans — the higher quality, milder-tasting of the two main coffee beans — is trading just above $1 a pound on New York’s ICE, well under half the value it was just five years ago because of a flood of beans from the leading producer, Brazil.
Forget the Trade War. Citi Sees Brent at $78 Within Three Months
Sharon Cho – Bloomberg
Lender’s forecast implies a 28% rally from current levels; Pessimism masks bullish market fundamentals, writes Ed Morse
Forget the trade war and global growth pessimism. Citigroup Inc. is sticking to its target of Brent oil rising to $78 a barrel in three months.
Fed Funds Futures Priced in a Whole Extra Cut in Just Two Days
Benjamin Purvis – Bloomberg
Implied yield on January contract has plunged amid trade woes; Now suggesting 68 basis points of central bank easing in 2019
Fed funds futures contracts extended their rally Monday and are now indicating 68 basis points of interest-rate cuts this year by the U.S. central bank.
New ETF Shifts between Stocks and Bonds
John D’Antona Jr. – Traders Magazine Online News
It’s stock-backed. No wait, it’s a bond-backed.
Hold a second, it can be backed by both.
WBI Shares debuted a brand new ETF that trades on the New York Stock Exchange that can shift its underlying assets between equities and fixed-income securities. Introducing the WBI BullBear Trend Switch US 3000 Total Return ETF (WBIT) that employs both an equity model and a bond model to determine its holdings.
Deutsche Bank Funding Costs Subdued Despite Share-Price Slide; Debt investors aren’t panicking even as lender’s shares hit record low
Paul J. Davies and Jenny Strasburg – WSJ
Deutsche Bank AG DB -0.59% shares fell to a record low Monday, yet debt investors aren’t panicking and a key measure of the German bank’s funding costs has improved in the past week.
Hargreaves Lansdown hit by Woodford woes; Fund supermarket’s shares drop on concern over its heavy promotion of star manager
Naomi Rovnick and Kate Beioley – FT
Hargreaves Lansdown shares fell sharply on Tuesday as the fund platform was dragged into the deepening crisis at Neil Woodford’s investment group.
Neil Woodford’s Star Implodes in a Liquidity Crunch; Fund manager’s big bets on unloved U.K. stocks weren’t the problem; his love of unlisted securities was.
Mark Gilbert – Bloomberg
All political lives end in failure, Conservative politician Enoch Powell once remarked. Neil Woodford’s decision to freeze his flagship equity fund suggests stock pickers will struggle to escape a similar fate in the era of passive funds and computer-enhanced trading strategies.
Nordea’s Asset Managers to Be Spared Cuts Facing Rest of Bank
Hanna Hoikkala – Bloomberg
Nordea Asset Management is looking into how best to grow in an industry in which scale is becoming increasingly important.
Woodford Confronts Career Crisis After Freezing Fund Withdrawals
Suzy Waite and Nishant Kumar – Bloomberg
Suspension aimed at protecting investors as outflows increase; Warren Buffett devotee once managed U.K.’s largest equity fund
Neil Woodford, a Warren Buffett devotee whose winning streak made him a celebrity U.K. money manager, is facing the biggest crisis of his career after freezing redemptions from his flagship fund.
Morgan Stanley Touts Alternatives for Yield-Hungry Japan Clients
Takashi Nakamichi and Takako Taniguchi – Bloomberg
U.S. firm’s Japanese asset manager aims to expand portfolio; Alternative assets include loans to U.S. and European firms
Morgan Stanley’s Japanese asset management arm plans to expand its 3.1 trillion yen ($29 billion) portfolio by tapping yield-starved investors’ growing interest in unconventional assets abroad.
Chinese brokerage Huatai confirms $500m London share sale; Group plans to apply to Shanghai exchange to issue new stock
Don Weinland – FT
Huatai Securities, one of China’s largest brokerages, confirmed on Tuesday that it plans to sell $500m in global depositary receipts on the London Stock Exchange after first announcing the plans last year.
Why Taiwan poses a threat to the US bond market; Taiwanese insurers hold about 14% of longer-term US corporate debt
Robin Wigglesworth – FT
The Sino-American trade war is rattling markets, but a lesser-appreciated and potentially significant tail risk is lurking off the coast of China.
Digital Dissidents Are Fighting China’s Censorship Machine; Thirty years after Tiananmen Square’s pro-democracy protests, tech-savvy activists seek to open the internet.
Shelly Banjo, Lulu Yilun Chen – Bloomberg
The face of dissent isn’t easy to recognize in modern China. Laborer Quan Shixin spends most days planting trees and spraying pesticide in a man-made forest on the outskirts of Beijing. She makes less than $10,000 a year and never went to university—not the kind of person you’d expect to be steeped in such things as end-to-end encryption, virtual private networks, or cryptographic authentication.
China Warns Citizens Against U.S. Travel, Citing ‘Frequent’ Shootings
Chinese encountering difficulties in U.S., ministry says; Trade tensions deepen between U.S. and China ahead of G-20
China issued a travel advisory on the U.S. through the end of the year, amid spiraling trade tensions between the two countries.
Brexit uncertainty knocks 13% off foreign investment projects to UK; France and Germany narrow gap with Britain as FDI destination
Andy Bounds – FT
The number of new foreign direct investment projects in the UK fell 13 per cent last year as uncertainty over Brexit deterred investors, according to EY, the professional services company that tracks the annual figures.
No Wonder Donald Trump Loves Brexit So Much; The U.S. wants to move the U.K. away from the EU’s set of trade rules and regulations toward the American one. Farage and Johnson are easy prey.
Therese Raphael – Bloomberg
You would usually say with total confidence that if anyone can write the manual on How to Survive a Visit from Donald Trump, it’s the Brits. There is no country better at rolling out the red carpet without picking up any stains. No nation has more experience in deploying pomp to dignify an office, honor an alliance or exude unrivaled soft power status, all without giving up too much dignity or altering the course of British policy in the process.
Coffee Doesn’t Warrant a Cancer Warning in California, Agency Says; Industry scores win following finding on chemical found in beverage
Sara Randazzo – WSJ
The coffee industry scored a win in California on Monday with the passage of a rule clarifying that the popular beverage doesn’t require a cancer warning.
Up to 25 cups of coffee a day safe for heart health, study finds
Coffee lovers who drink up to 25 cups a day can rest assured the drink is not bad for their heart, scientists say.
Some previous studies have suggested that coffee stiffens arteries, putting pressure on the heart and increasing the likelihood of a heart attack or stroke, with drinkers warned to cut down their consumption.
But a new study of more than 8,000 people across the UK found that drinking five cups a day, and even up to 25, was no worse for the arteries than drinking less than a cup a day.