Equity Volatility Aside, Market Structure Debate Back in the Fray
By Suzanne Cosgrove – John Lothian News
Exchanges often have an uneasy relationship with regulation, but Adam Inzirillo, head of U.S. equities at Cboe Global Markets, began a Wednesday webinar on market structure hosted by Eventus Systems with a tip of the hat to Regulation SCI, rules adopted by the SEC in 2014 to bolster the technology infrastructure of securities markets and reduce system issues.
Markets have not seen this much volatility since 2008, but the notable thing since March has been their resiliency, Inzirillo said. “There have been a lot of comparisons with the flash crash, but we saw Reg SCI come into play,” he said.
Market-wide circuit breakers were triggered four times during the swings sparked by the start of the COVID-19 pandemic, Inzirillo said, “but when looking at ways we can improve on that, we don’t see anything significant.” There have been some clearing and settlement issues, he added, but the markets themselves have worked and “equities have been fairly efficient.”
To read the rest of this story, go here.
Hits & Takes
By John Lothian & JLN Staff
JLN will not be published on Friday, July 3rd, which is the official holiday for the 4th of July Independence Day in the U.S., which falls on Saturday. We will resume publishing on Monday, July 6. There will be a Weekend Update, and there will be a Special Report that goes out Saturday at 12:01 AM with the Declaration of Independence. We are sending it out so early Saturday morning so our friends in the UK get it bright and early. Also, there is no new edition of The Spread this week, though the Weekend Update will include last week’s edition, which did not make it last time.
The recordings for FIA’s IDX-V are now available. You can log into your FIA account to access them. If you had a pass for the conference, the recordings are free. If you want access now and you did not have a pass, you can buy one and get access to the recordings. Log in at www.FIA.org.
Elmhurst College, a college in my town founded by the same people who founded my church and where my wife went to school, has changed its name to Elmhurst University. Here is a rather long Youtube video about the name change. The college, now University, is well known for its connection to the Niebuhr brothers. Reinhold Niebuhr (class of 1910) was the author of the prayer that became known as the Serenity Prayer, and was a national figure from the 1930s to the 1970s. His work continues to inform social and political debates today. H. Richard Niebuhr (class of 1912), who served as president of Elmhurst College in the 1920s, was the other brother.
I have accepted the position of vice president of development for the Pathway to Adventure Council of the Boy Scouts of America board of directors. I will learn more about this next week, but it means that my efforts on behalf of the LaSalle Street Trading Tech Awards are giving me the opportunity to do more for the Scouts. I stepped down from my unit positions six months ago and have had a chance to consider where I want to help the organization. It is clear to me that Scouting is needed more than ever in Chicago (and around the world) to help create good citizens and keep kids away from gangs, guns and drugs. That is my why. And it is why I will embark on this next chapter in my Scouting career.
I want to encourage all of you to be smart and safe this holiday weekend. The probability of getting Covid-19 is higher this weekend because more people will be out and want to gather in groups. This is the first year since I have been alive that my family is not gathering for a family reunion over the 4th. Many other families have similar traditions. With the virus surging in Southern U.S. states, the danger of not sheltering at home is clear to see.
Have a great weekend and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
OCC announced Wednesday that June 2020 total cleared contract volume was 693,042,180 contracts, the U.S. equity options industry’s highest month ever – up 80.7 percent from June 2019 volume and beating the previous record of 670,646,998 cleared contracts set in March 2020 by 3.34 percent. Three trading days in June landed within the top five trading days on record, with Friday, June 11 clearing 48,039,191 contracts – the second highest cleared contract volume day in OCC’s history.~SR
Grayscale Investments has been buying up a lot of digital assets lately. A recent 8-K filing by Grayscale in mid-June says that they have added 19,879.34969021 BTC (roughly $184,879,254 worth of bitcoin) to their holdings since their previous filing. Yesterday, they posted on Twitter that their total AUM has reached $4.1 billion.~MR
Deutsche Boerse’s Outage Fuels 35% Volume Crash in German Stocks
Ksenia Galouchko – Bloomberg
Breakdown also cut transactions at other affected exchanges; Failure added to summer lull, light trade before U.S. holiday
The sudden, hours-long breakdown in Deutsche Boerse AG’s electronic trading system on Wednesday led to a significant drop in volumes across affected markets, adding to the summer lull and leaving some traders frustrated. Transactions on Germany’s DAX Index tumbled 35% to the lowest level since May 25, according to data compiled by Bloomberg. In Budapest, volumes fell 47% and in Prague the decline reached 66%. The exchanges, along with those in Vienna, Zagreb and Ljubljana, share Deutsche Boerse’s T7 trading system.
*****Thomas Book will remember the events of his first day in charge of Deutsche Boerse AG’s cash markets.~JJL
U.S. coronavirus cases rise by nearly 50,000 in biggest one-day spike of pandemic
Lisa Shumaker – Reuters
New U.S. COVID-19 cases rose by nearly 50,000 on Wednesday, according to a Reuters tally, marking the biggest one-day spike since the start of the pandemic.
*****There is an increased risk of getting the coronavirus due to the U.S. Independence Day holiday weekend and the desire for people to get out and see other people. Resist the urge. Play the probabilities the right way and stay safe!~JJL
ErisX: Behind the Headlines
With Summer 2020 upon us, we wanted to take a moment to reflect on all of the exciting milestones ErisX achieved this year. One of the most recent achievements was on Friday, May 29th, when ErisX’s clearing and settlement arm, Eris Clearing, became the first Derivatives Clearing Organization (DCO) under the jurisdiction of the Commodity Futures Trading Commission (CFTC) to physically deliver a bitcoin futures contract.
*****This is not a great headline because normally behind crypto news headlines there is a lot of hot air. But I appreciate the look behind the scenes.~JJL
Wednesday’s Top Three
Our top story Wednesday was ‘Hamilton’ Review: The Revolution, Now Televised, the review of ‘Hamilton’ on Disney+ by the Wall Street Journal. Thanks, John – now there is an even bigger chance that the internet will crash on Friday! Our second most read story was the Wall Street Journal’s Microsoft Aims to Train 25 Million Workers Free in 2020. Third was Working From Home Isn’t as Cheap as You Think It Is from Money.com. I must say, I do miss the “free” air conditioning at the office.
180,459,008 pages viewed; 24,307 pages; 225,112 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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Wall Street Knows It’s Too White. Fixing It Will Be Hard; Diversity czars and recruiting changes have done little to bridge the racial gap in finance
Liz Hoffman and Susan Pulliam – WSJ
When Charles Scharf took over at Wells Fargo WFC -1.99% & Co. last year, tasked with moving the bank past a fake-accounts scandal, he brought in a cleanup crew of former colleagues from his long career on Wall Street. A new chief operating officer and heads of public affairs, credit cards and strategic planning had all worked with Mr. Scharf at JPMorgan Chase JPM -0.86% & Co. or Bank of New York Mellon Corp. BK -2.74% Another longtime JPMorgan executive joined the board. All are white men.
The lockdown death of a 20-year-old day trader; The suicide of Alex Kearns — who thought he had lost heavily — has triggered calls for reform of online brokerages
Robin Wigglesworth, Richard Henderson and Eric Platt – FT
Alex Kearns was an ordinary 20-year-old. He played the trombone, studied at the University of Nebraska and, like millions of other Americans, traded stocks to pass the time or make some money when coronavirus shut down schools and workplaces. Unfortunately, his youthful dabbling ended in tragedy.
*****Learn how to read your statement, it can save your life.~JJL
Hedge Fund Star John Paulson Calls It Quits; Mr. Paulson’s decision had been telegraphed as assets at his firm fell and returns declined
Gregory Zuckerman – WSJ
John Paulson made billions of dollars anticipating the 2008 financial collapse. But after running into difficulties in recent years, Mr. Paulson will convert his hedge fund firm into a private investment firm that runs only his family’s money.
How index investing can drive sustainable finance transition; A well-informed decarbonisation trajectory calls for a quantitative investment approach via indices
Lionel Paquin – FT
The Covid-19 crisis is a stark reminder of the vulnerability of human societies and our dependence on the balance of natural systems. It is true for health issues but also for biodiversity and climate issues.
Fed’s Bullard says risk of financial crisis remains; St Louis president warns of wave of bankruptcies without public health measures
James Politi – FT
A senior Federal Reserve official has warned that a wave of business failures owing to the pandemic could still trigger a financial crisis, as he justified the central bank’s continuing efforts to prop up capital markets.
European exchange group FESE rejects bid to shorten market hours; Nasdaq has backed FESE’s claims that reducing market hours is the wrong move and would have no impact on the wellbeing of traders.
Hayley McDowell – The Trade
The Federation of European Securities Exchanges (FESE) has slammed the industry’s bid to shorten equity market hours as being detrimental to end investors.
Madeline McWhinney Dale, Trailblazing Banker, Is Dead at 98; She was the first female officer of the Federal Reserve Bank. Later, in another first, she ran a commercial bank largely owned and operated by women.
Steven Kurutz – NY Times
In the 1940s and ’50s, when Madeline McWhinney was a young economist at the Federal Reserve Bank of New York, banking was such a men’s club that meetings were often held inside one. At such gatherings at the Union League Club on Park Avenue, which didn’t allow women to join until the late 1980s, Ms. McWhinney had to enter through a side door and be chaperoned by an older Fed official.
Oil majors face up to plunging asset values; Coronavirus hastens long-expected reckoning as prospect of enduring hit to demand sinks in
Anjli Raval – FT
In previous energy downturns, prices slumped but companies kept faith in their oil and gas investments. This time it might be different, as the prospect sinks in that the pandemic’s impact will endure.
Businesses in Hong Kong fear collateral damage from security law; While some argue it will restore stability, others say legislation is too vaguely defined
Primrose Riordan and Hudson Lockett – FT
Beijing’s new national security law for Hong Kong is more draconian than many businesses had feared, especially clauses that could be used to target foreign citizens, the handling of “state secrets” and data security, warned lawyers, academics and investors.
Hong Kong bankers flock to London to evade ‘disturbing’ China security law; Estate agents and recruiters in London have seen a spike in enquiries from finance workers based in Hong Kong
Shruti Tripathi Chopra and Paul Clarke – Financial News
Hong Kong finance workers are flocking to London following the Chinese government’s decision to impose a controversial national security law on the region.
Most Canadians Are Now Better Off Than Most Americans; Middle-class people in the U.S. are losing ground to their peers in other rich countries.
Justin Fox – Bloomberg
Everybody knows that the U.S. version of capitalism is rougher and tougher than is the norm in other affluent countries. The rich are richer here, the poor poorer and the welfare state less exhaustive. Not surprisingly, the U.S. scores poorly versus other rich nations in terms of health outcomes, education levels and other such metrics.
Saudis Threaten New Oil-Price War With OPEC Brethren; As major producers look to curb output, the kingdom takes a tough stance with laggards
Benoit Faucon and Summer Said – WSJ
Saudi Arabia has threatened to ignite an oil-price war unless fellow OPEC members make up for their failure to abide by the cartel’s recent production cuts, delegates said.
Semper Investment Firm Received PPP Loan; Firm owned by Richard Parsons and Ronald Lauder received a $726,200 loan in April from government program
Juliet Chung – WSJ
A $2.5 billion investment firm owned by Richard Parsons and Ronald Lauder received a forgivable loan from the federal government’s small business loan program, even as many small businesses say the terms made it impossible for them to qualify.
S&P 500’s Past 100 Days Were Its Best in Almost Nine Decades
By Amena Saad – Bloomberg
Index has powered higher by 40% since March 23 bottom; Small sample size of similar gains shows rally continues
The S&P 500 has had a 100-day run for the record books. Since bottoming March 23, the benchmark for American equities has rallied 40%, a feat not done for almost nine decades. If history is any guide, the gains have further to go, according to Bespoke Investment Group.
Delistings threaten to spoil Singapore exchange’s challenge to HK
Corporate governance scandals and other challenges could mean ‘death’ of the bourse, says one analyst
Mercedes Ruehl in Singapore and Hudson Lockett – FT
Singapore’s stock exchange is struggling with a rash of delistings and governance scandals that threaten its ambition to replace Hong Kong as a regional finance hub.
Coronavirus Surge Strains Municipal Bond Market, but Investors Still Pile In; Despite pressure on state and local governments from lost tax revenue, investors are drawn by yield and relative safety
Heather Gillers – WSJ
The recent surge in Covid-19 cases has brought more bad news for a municipal bond market already reeling from the impact of coast-to-coast shutdowns and record unemployment.
Pandemic highlights hurdles limiting access to justice; Data privacy is focus for FT hackathon designs to make legal support open to all
Amy Bell – FT
Canadian immigration consultant Blake Sieders is used to handling clients’ private, personal details. “People reach out to you via social channels or by email,” he says. “My email inbox is filled with details of people’s passports and marriage certificates, and very sensitive information.”
The radical technologies to keep offices clear of coronavirus | Free to read; Employers are looking at a range of innovations aimed at making workplaces safe
Anna Gross and Ian Bott – FT
As economies emerge from hibernation, employers are rushing to make workplaces safe with rudimentary tools such as hand sanitiser, face masks and the use of stairs rather than lifts. But engineers are developing more radical technologies to keep the virus out of offices.
Coronavirus latest: More than half of US backs out of reopening on Covid-19 surge; Today’s top stories: The downturn in Europe’s labour market has slowed. Pandemic scars deepen but Primark owner offers some solace. Low-cost airlines report near wipeout in passenger numbers for June.
Emma Boyde, George Russell, Sarah Provan, Adam Samson, Philip Georgiadis, Naomi Rovnick 29
Sarah Provan – FT
Pulled Treasury tweet cheering pub return draws ire. A now-deleted tweet urging English drinkers to “grab a drink and raise a glass” when pubs in England reopen this weekend has been called “wholly irresponsible”, as some communities face reinforced restrictions to contain a surge in new infections.
The politicians who played the Covid-19 crisis badly; ‘Bolsonaro, Trump and Johnson (until he got ill) acted out their sense of immunity by continuing to shake hands in public’
Simon Kuper – FT
“Bolsonaro, Trump and Johnson: these are men you wouldn’t put in charge of containing an outbreak of acne,” writes Ferdinand Mount, former head of Margaret Thatcher’s Downing Street policy unit, in the London Review of Books.
The pandemic and economic downturn are ‘hitting women hardest’; The same pattern is playing out in both developed and developing nations, but Linda Scott remains optimistic
Andrew Hill – FT
Linda Scott has spent years collecting data on gender inequality and exploring the dark history of female subjugation. As an academic researcher, she has documented the first-hand experience of obstacles to women’s economic advance towards equality, from villages in Ghana and Uganda to the campuses of US business schools.
Independence Day: a star-spangled superspreader event; US public health experts warn of heightened risk of virus transmission during July 4 celebrations
David Crow – FT
It was a fairly typical itinerary for someone enjoying a boozy Memorial day weekend in Missouri’s Lake of the Ozarks, a magnet for revellers who flock to the region’s waterside bars to celebrate US public holidays.
Airlines Warn Worsening U.S. Virus Spread Threatens Revival
Christopher Jasper – Bloomberg
High coronavirus infection rates in the U.S. are threatening to undermine a global recovery in travel, according to the airline industry’s main trade group. International Air Transport Association economists said Wednesday their baseline estimate for a 36% drop in traffic this year could worsen to 53% if border curbs on emerging market countries and the U.S. remain in place.
Covid-19 Isn’t Killing Cash. People Are Hoarding More of It
Catherine Bosley – Bloomberg
Digital transactions have increased under coronavirus lockdown; But study shows a surge of bills in circulation as well
People appear to be bunkering cash amid the coronavirus outbreak, according to a study that seeks to debunk the notion that the pandemic was hastening the demise of paper money due to e-commerce or fears of infection.
Pandemic Helps Russia Tighten Its Grip on a Key Strategic Metal
Yuliya Fedorinova and Felix Njini – Bloomberg
Norilsk Nickel’s share of palladium market will grow this year; Company benefits from disruptions to South African production
As the coronavirus pandemic pummeled demand from key customers in the auto industry, Russia’s biggest mining company quietly tightened its grip on the palladium market.
Life, Liberty and Face Masks: Virus Preys on Divided America; ‘What type of dystopian situation are we in, when a face mask is a political statement?’
Brian Bremner – Bloomberg
If a world leader in science and technology can’t convince its citizenry to wear face masks amid a raging pandemic, that’s a problem. Such is the reality that America faces as a highly transmissible virus runs riot ahead of Independence Day celebrations. With the nation setting ever higher one-day records for infections, which topped 50,000 for the first time on Wednesday, public health experts worry that not enough Americans grasp the risks — or worse, view the crisis through a political lens in an election cycle.
Young people are throwing coronavirus parties with a payout when one gets infected, official says
Faith Karimi and Jamiel Lynch, CN
Some young people in Alabama are throwing Covid-19 parties, a disturbing competition where people who have coronavirus attend and the first person to get infected receives a payout, local officials said.
The Global Tourism Industry’s Losses May Exceed $1.2 Trillion
Bryce Baschuk – Bloomberg
Damage may top $3.3 trillion if travel curbs persist in 2021; Jamaica, Thailand, other developing nations will suffer most
The global tourism industry will lose at least $1.2 trillion this year amid crippling travel restrictions and consumer wariness during the coronavirus pandemic, according to a report Wednesday from the United Nations Conference on Trade and Development.
Exchanges, OTC and Clearing
OCC June 2020 Total Volume Up Nearly 81 Percent from a Year Ago
OCC, the world’s largest equity derivatives clearing organization, announced today that June 2020 total cleared contract volume was 693,042,180 contracts, the U.S. equity options industry’s highest month ever – up 80.7 percent from June 2019 volume and beating the previous record of 670,646,998 cleared contracts set in March 2020 by 3.34 percent. Three trading days in June landed within the top five trading days on record, with Friday, June 11 clearing 48,039,191 contracts – the second highest cleared contract volume day in OCC’s history.
Deutsche Börse welcomes 21Shares as a new issuer; New crypto-ETN offers easy access to Bitcoin
The first cryptocurrency product from issuer 21Shares has been tradable on Xetra and Frankfurt Stock Exchange since Thursday. With the 21Shares Bitcoin ETP , investors have the opportunity to participate in the performance of the cryptocurrency Bitcoin . The Exchange Traded Note (ETN) physically deposited with Bitcoin was admitted to the regulated market of the Frankfurt Stock Exchange and is cleared centrally via Eurex Clearing. Central clearing enables investors to benefit from significantly reduced risks when processing transactions.
Qontigo Launches First EU-Compliant Climate Benchmark Indices; STOXX PAB and STOXX CTB Index families align with EU Regulatory objectives to reduce global warming and decarbonize
Qontigo announced today the launch of two new families of Climate Indices: the STOXX Paris-Aligned Benchmark (PAB) Indices and the STOXX Climate Transition Benchmark (CTB) Indices. These indices help reduce exposure to climate-related financial risks and include companies that are well-positioned to provide solutions needed to transition to a low-carbon economy.
Half-yearly report: Xetra-Gold achieves a new record in gold holdings with 221.7 tons; Growth of 18.5 tons since the beginning of the year / Europe’s largest gold security with physical deposit
The gold holdings of the exchange-traded Xetra-Gold bearer bond (ISIN: DE000A0S9GB0 ) rose to a new record of 221.7 tons as of June 30. This is an increase of 18.5 tons since the beginning of the year. At the turn of the year, 203.2 tons of gold were still stored in the central safe for German securities. Xetra-Gold is the leading physically deposited gold security in Europe.
Cash market sales statistics for June
Deutsche Börse Group
A trading volume of EUR 198.8 billion was achieved on the cash markets of Deutsche Börse in June (previous year: EUR 116.0 billion). Xetra accounted for EUR 166.0 billion of this (previous year: EUR 106.3 billion), bringing the average daily Xetra turnover to EUR 7.9 billion. EUR 5.2 billion were traded on the Frankfurt Stock Exchange (previous year: EUR 2.3 billion) and EUR 27.6 billion on the Tradegate Exchange (previous year: EUR 7.5 billion).
EURO STOXX 50 Index Options: Introduction of additional expirations
The Management Board of Eurex Deutschland decided, with effect from 24 August 2020, to introduce for EURO STOXX® 50 Index Options (OESX) two additional quarterly expirations in the second year of the offered terms. These additional quarterly expirations will be introduced for March and September.
Delistings threaten to spoil Singapore exchange’s challenge to HK; Corporate governance scandals and other challenges could mean ‘death’ of the bourse, says one analyst
Mercedes Ruehl and Hudson Lockett – FT
Singapore’s stock exchange is struggling with a rash of delistings and governance scandals that threaten its ambition to replace Hong Kong as a regional finance hub.
LME issues discussion paper on development of electronic options market
London Metal Exchange
The London Metal Exchange (LME) today issued a market-wide discussion paper regarding the proposed development of its electronic options market. Following extensive engagement with its Traded Options Committee and in response to demand from market participants, the LME plans to develop its electronic options market while maintaining the flexibility of its current inter-office options trading structure.
CME Group Reports June and Second-Quarter 2020 Market Statistics
CME Group, the world’s leading and most diverse derivatives marketplace, today reported its June and second-quarter 2020 market statistics, showing it reached average daily volume (ADV) of 17.6 million contracts during the quarter and 17.1 million contracts during the month of June. Open interest at the end of June was 101 million contracts. Market statistics are available online in greater detail at https://cmegroupinc.gcs-web.com/monthly-volume.
Notice of change of published locations on JPX website related to Product Transfer from Tokyo Commodity Exchange to Osaka Exchange
On Monday, July 27, 2020, some products (Precious Metals, Rubber, Agricultural products) are scheduled to be transferred from Tokyo Commodity Exchange (TOCOM) to Osaka Exchange (OSE). Web pages related to transferred products will be moved as follows on Saturday, July 25 (tentative).
European exchanges reject calls for shorter trading day; Fund managers and banks say long hours are antisocial and unnecessary
Philip Stafford – FT
European stock exchanges have come out in opposition to a shortening of their opening hours, dealing a blow to fund managers and bankers pushing to curb some of the longest trading days in the world.
Boerse Stuttgart records July turnover of EUR 6,2 billion; All asset classes show significant increase in trading volume compared with June figures
Based on the order book statistics, Boerse Stuttgart generated turnover of around EUR 6,2 billion in July 2019 – an increase of nearly 25 per cent compared to the previous month.
Moscow Exchange to allow negative derivative prices after lawsuit
The Moscow Exchange, facing a lawsuit from private investors who suffered losses when oil futures turned negative in April, will allow for negative prices on some derivative instruments from July 6, the bourse said on Tuesday.
MGEX Welcomes June into the Top-5 Record Book
MGEX, a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), welcomes June 2020 into the record book as the 5th best month in the Exchange’s history. This is the 6th consecutive June to enter the top-25 record for best overall month. Total exchange volume for the month was 283,477 contracts traded.
Where Would You Rather Spend the Day Trading? Where would you rather spend the day trading, Nasdaq or NYSE? The case for Nasdaq.
Nasdaq’s Economic Research Team
JUN 30, 2020 10:30AM EDT
In our prior analysis, we focused on the period around the open and closing auctions. Today we take a deeper look at intraday trading – commonly called “continuous trading” – where prices and liquidity are constantly in motion across all trading centers. Importantly, all stock tickers can (and do) also trade on any venue.
BOX Exchange Fee Change – July 2020
BOX Exchange LLC (“BOX” or “Exchange”) is including long stock strategies to the BOX Fee Schedule. 1 A long stock interest strategy is defined as a transaction done to achieve long stock involving the purchase, sale, and exercise of in-the-money options of the same class.
Barchart Announces Data and Services Partnership with ZE PowerGroup
Barchart, a leading provider of market data and technology services to the financial, media and commodity industries, has announced a new partnership with ZE PowerGroup (ZE), a leading data integration provider for the energy, commodities, and agricultural industries. The partnership covers the integration of Barchart market data into ZE’s products and services.
What Conversations With 15 FinTech CEOs Revealed
Dushyant Shahrawat – Forbes
A month ago, my investment banking group hosted Rosenblatt’s 12th annual FinTech summit, bringing together 400 investors and senior industry executives from the US, UK, Europe, India, Hong Kong, and Singapore. There were three panel discussions on cutting-edge FinTech topics with the CEOs of 15 leading FinTechs. Here are salient points discussed during each of the panel discussions.
FinTech Startup Plaid Hit with Class Action Lawsuit
Zarish Baig – The National Law Review
Imagine there is a company that knows every dollar you deposit or withdraw, every dollar you charge or pay to your credit card, and every dollar you put away for retirement, within hours after you make the transaction. Imagine this includes every book or movie ticket or meal you purchase, every bill you pay to a doctor or hospital, and every payment you make (or miss) on your mortgage, student loan or credit card bill. Imagine this company maintains a file on you containing all of this information going back five years. Imagine that this company uses your username and password to log into the online account you maintain with your bank and updates that file multiple times a day to stay up to date on every financial move you make.
What Does Wirecard’s Shutdown Say About Fintech’s Systemic Weaknesses?
Rachel McIntosh – Finance Magnates
The events that have taken place at Wirecard over the past month have been a bit of a shock to the financial and fintech industries. Not only did the company’s stock price fall from roughly $100 to as low as $1.50 over the course of several days in mid-June (~$5.00 at press time), but a number of fintech firms and other companies that relied on Wirecard’s services have realized how fragile their infrastructure – as well as the regulatory and auditing infrastructure in the fintech world – may be.
Fintech Is Making It So There Are No More Swim Lanes In Financial Services
Spencer Israel – Yahoo Finance
Ask enough people what the biggest trend in fintech is, and eventually you’ll start to hear a few repeated phrases. One-stop-shop. Big tech. Integration. Platform-as-a-Service.
Generic as those buzzwords may be, they also hint at something that’s happening within the financial services industry: everybody is trying to encroach on everybody else, and no one is safe.
Bitcoin Is Stuck In a Rut, But Millennials Could Bring Salvation
Amena Saad – Blooomberg
Potential for Robinhood traders to turn into crypto buyers; Largest coin has traded between $8,500-$10,000 for two months
In a period defined by market volatility, Bitcoin hasn’t gone much of anywhere. Crypto analysts are betting bored millennials can drive a breakout rally. The largest digital asset has traded in a narrow band between $8,500 and $10,000 for the past two months, the longest it’s gone without substantial movement this year. In addition, its 14-day Relative Strength Index (RSI) — which measures the magnitude and persistence of price movement — is at 48.5, a neutral point that underscores its muted range.
Blockchain: it really is a tough sell
Jemima Kelly – FT
We all know these are hard times for the media industry. Lay-offs everywhere from The Atlantic to Vice have been really sad to see, and also somewhat anxiety-inducing for those of us who have until now been lucky enough to be employed to do this journalism malarkey. But there is finding ways to make money via means other than via dwindling advertising revenues, and then there is taking the biscuit.
Bitcoin spot market volume fell by over 30% in June while DEXs picked up market share
Celia Wan – The Block
Monthly volumes for both bitcoin spot and futures fell sharply in June, by 31.98% and 40.39%, respectively, according to data collected by The Block. The decline of the bitcoin market coincided with a significant increase in trading volumes of Ethereum-based decentralized exchanges (DEXs). Data collected from Dune Analytics reveals that DEXs posted a monthly volume of $1.51 billion for June, a 70% increase from May. This development also represents a 46% jump over the previous all-time high in March.
Monthly volumes for DEXs soared past $1.5 billion to hit all-time high in June
Michael McSweeney – The Block
Decentralized exchanges saw their busiest month ever in terms of trade volume, according to new market data. The raw figures, collected from Dune Analytics, show that DEXs posted a monthly volume of $1.51 billion for June. This represents a month-over-month increase of 70%.
US Senators Float Bill Requiring Congressional Watchdog to Study Crypto’s Role in Trafficking
Danny Nelson – Coindesk
The top Republicans and Democrats on the Senate Banking Committee plan to introduce legislation this week that would direct the Government Accountability Office (GAO) to study virtual currency’s role in illicit online activity. The language appears in a draft anti-money laundering amendment to the gargantuan National Defense Authorization Act, a must-pass bill that greenlights annual military spending. “Although the use and trading of virtual currencies are legal practices, some terrorists and criminals, including international criminal organizations, seek to exploit vulnerabilities” through them, the amendment read.
(Podcast) Zane Tackett has seen some of the crypto space’s biggest events — here’s what he’s learned
Aislinn Keely – The Block
Episode 25 of Season 2 of The Scoop was recorded remotely with The Block’s Frank Chaparro and Zane Tackett, a sales and business development executive at crypto derivatives exchange FTX.
BlockFi Sees a Boom in New Clients, Revenue Doubled on Bitcoin Halving
Aziz Abdel-Qader – FT
BlockFi, a provider of crypto-backed lending products, said it saw a doubling in monthly revenue since its latest $30 million Series B funding in February. Although it didn’t reveal the exact figures, the New York-based crypto lender said it is on track to generate $50 million in revenue over the next year. BlockFi also reported strong increases in earnings and a broadening of client base as it is eyeing a more substantial footprint in Asia and elsewhere.
A newly-disclosed flaw found in several popular Bitcoin wallets could let attackers trick users into thinking they got paid
Mike Orcutt – The Block
Wallet service ZenGo says it discovered a flaw in popular wallet services that made it possible for attackers to dupe users into thinking they had received bitcoin when they hadn’t. All three vendors named in the report — Ledger, BRD, and Edge — confirmed that they are aware of the issue and have addressed it. Each pushed back on the idea that attackers can use it to “double spend” bitcoin, however, as ZenGo contended in its findings.
US Appeals Court Allows Warrantless Search of Blockchain, Exchange Data
Danny Nelson – Coindesk
A federal appeals court on Tuesday affirmed a lower court’s denial of a motion to suppress evidence in a case that hinged on whether the Fourth Amendment of the U.S. Constitution protects Bitcoin blockchain records from warrantless search and seizure.
Binance confirms partnership with Swipe for debit card launch
Yogita Khatri – The Block
Crypto exchange behemoth Binance has confirmed a partnership with Swipe for its debit card launch in a now-deleted webpage. The cached version of the “Binance Card” FAQ section on the exchange’s website reads: “Binance has partnered with Swipe to provide a Card platform for Binance users.” This confirms The Block’s reporting from earlier this week, which said Binance is partnering with Swipe for its card launch.
Why Bitcoin Bulls Are Betting on Explosive Growth in India
Leigh Cuen – Coindesk
When India’s Supreme Court overturned the banking restrictions for crypto exchanges back in March, everything changed. Since then, Binance joined the Internet and Mobile Association of India (IAMAI), which played a key role in overturning the ban, and noted explosive growth via WazirX, the Indian exchange Binance acquired in 2019. A WazirX spokesperson told CoinDesk the exchange saw 150% more signups in many Indian cities from February to May 2020, which boosted local trading volumes by 66%.
Mysterious bitcoin wallet emptied of almost a billion dollars of cryptocurrency
Joel Khalili – TechRadar
The owner of the world’s largest unattributed bitcoin wallet has emptied their account of almost $1 billion in cryptocurrency. The transaction saw 101,857 BTC (with a market value of circa $933m at the time of writing) delivered to two recipients, with first first receiving 5,000 BTC ($45.8m) and the second 96,857 BTC ($887.4m). The transfer made the latter bitcoin wallet the second richest in existence, behind a cold storage wallet owned by cryptocurrency exchange Huobi.
Slotkin, Former Intelligence Briefer, Presses White House on Russia Reports; The experience of Representative Elissa Slotkin as an intelligence official told her there was something very unusual in the way the White House handled disturbing reports on Russia.
Emily Cochrane – NY Times
From the moment President Trump publicly denied knowledge of intelligence that suggested that Russia had offered bounties for killing American troops in Afghanistan, something seemed off to Representative Elissa Slotkin, Democrat of Michigan.
Markets are right to be nervous about the US election; Worries about a political crisis replace confidence about a Trump re-election
Tina Fordham – FT
Global markets are increasingly focused on a new source of uncertainty: the US presidential election in November. The consensus view among investors at the start of the year was that Donald Trump would easily win a second term, helped along by a resilient US economy and Mr Trump’s own favourite metric, the benchmark S&P 500 stock index. Not now.
How America could fail its democracy test; High risk that Donald Trump and Joe Biden could dispute November’s presidential result
Edward Luce – FT
Donald Trump has won the electoral college by a clear margin. Yet America is in ferment. Cities around the world are holding candlelit vigils for US democracy and smaller Democratic states have joined California to threaten “Calexit”. Unions plan a general strike to pressure chief executives to back America’s majority.
Divided America Is No Match for Covid-19
Karl Maier – Bloomberg
Laying all the blame for the U.S.’s disastrous performance against the coronavirus at the feet of the Trump administration has always been too easy. The U.S. is a world beater in science and technology, has turned out more Nobel laureates than any other nation. But it’s also home to the highest number of infections — 2.6 million and counting — and most deaths, at more than 127,000. If the virus isn’t contained soon, the daily rise in cases could reach 100,000.
FINRA Legacy File Transfer Service Decommission
FINRA’s legacy file transfer service (filetransfer.finra.org) will be shut down on 7/1/2020. By now, all FINRA applications file transfers that were using the legacy service should have migrated to fileX file transfer service. Details about fileX service and user guide can be found on https://www.finra.org/filing-reporting/data-transfer-tools/fileX.
Financial Reports and Policies
As a not-for-profit, self-regulatory organization whose operations are funded by member firm fees—without the support of any taxpayer dollars—FINRA must prudently manage its finances to ensure it can appropriately fund its mission to protect investors and promote market integrity in a manner that facilitates vibrant capital markets.
Developments in the Digital Assets Market
This panel focuses on recent developments in the digital assets space. Join FINRA panelists and industry experts as they explain how these products and related initiatives are evolving and impacting the securities industry.
Investing in the Difference Maker at a Number 1 IT Company
I’m proud to announce that IDG’s Computerworld has named FINRA No. 1 among midsize companies on its 2020 Best Places to Work in IT list. This is our ninth appearance on the annual list, but beyond being No. 1 in our category, this one is particularly special.
SEC Announces Agenda, Panelists for Staff Roundtable on Emerging Markets
The Securities and Exchange Commission today announced the agenda and panelists for the July 9, 2020 staff roundtable on investing in emerging markets, including China. Further information, including prior statements and actions in this area, are available here.
Investing and Trading
There are only two types of investors; There is a lot to lose and little to gain from market timing
Terry Smith – FT
I last wrote about the problems of so-called market timing in these pages in 2013 (Market timing: don’t try this at home). With the Covid-19 pandemic dominating the news and recent volatility on world stock markets, you may have heard a lot about market timing again.
Sterling’s faded illusion of sovereignty; The pound has been a ball-and-chain on successive UK governments
Philip Stephens – FT
Margaret Thatcher once told me that she would never allow “the Belgians” to decide the value of the British pound. At the time, the then prime minister was battling her chancellor Nigel Lawson’s plan to fix the value of sterling in the European exchange rate mechanism. For some reason she had identified me as one of the chancellor’s confidants. “The Belgians”, equally inexplicably, was her shorthand for the EU.
Fed moves closer to offering interest rate guidance; US central bank debates providing greater clarity on intentions to reassure investors
James Politi and Colby Smith – FT
Federal Reserve officials moved closer to offering detailed guidance on the path of interest rates and asset purchases last month as they discussed reinforcing their policy tools in response to the recession triggered by the coronavirus pandemic.
MMT Environment Is `Nano-Seconds Away,’ Saxo Bank Says
Steen Jakobsen, chief economist and chief investment officer at Saxo Bank A/S, discusses inflation, the changing workforce and modern monetary theory, which argues that governments with their own currency can’t go broke, and can keep spending until inflation becomes a problem. “We are in a world where only inflation can save the central banks from the quagmire they put the world into,” he says in an interview on “Bloomberg Markets: European Open.” (
Goldman Says Refineries to Shut on Less Demand, New Projects
Elizabeth Low and Sharon Cho – Bloomberg
Mega-refineries to start while fuel demand still recovering; Plant closures more likely in developed nations, bank says
The global refining industry is entering a consolidation phase as slowing oil demand growth is set to coincide with large-scale projects that will start coming online next year, according to Goldman Sachs Group Inc.
Stocks Are the Default Choice In a World of Bad Options; Investors are opting to hold equities, not because they’re attractive, but because everything else is much less attractive.
Aaron Brown – Bloomberg
At the bottom of the stock market crash three months ago, I wrote: There are four big unknowns for investors. First, how long and deep will be the reduction in economic activity from social isolation? Second, how much money will the government spend during that period, and how will it deal with the increased debt afterwards? Third, what will be the long-term public health impact? Fourth, what permanent changes will result?
Environmental, Social and Corporate Governance
A Holy Call Could Elevate Status of ESG Investing
Tom Lydon – ETF Trends
The Vatican is advocating that Catholics around the world part ways with fossil fuels investments, a powerful call that could fuel to the fire of environmental, social and governance (ESG) ETFs, including the FlexShares STOXX US ESG Impact Index Fund and its global counterpart, the FlexShares STOXX Global ESG Impact Index Fund. The Vatican’s push comes after globally listed ESG ETFs hauled in $4.33 billion in new assets in May, boosting the year-to-date inflows total north of $28 billion.
Coronavirus: ‘major turning point’ for responsible ESG investing, says JPMorgan
Pippa Stevens – CNBC
The coronavirus pandemic and the destruction left in its wake could lead to a greater adoption of socially responsible investing, according to JPMorgan.
In a report released Wednesday, the firm said that Covid-19 could prove to be a “major turning point for ESG,” which is when investors consider a company’s environmental, social and governance factors alongside traditional metrics like balance sheet strength and earnings growth potential.
Council Post: ESG Scoring Is Failing: Time For Improvement
George Strobel – Forbes
Environmental, social responsibility and good governance (“ESG”) standards for business conduct continue to rise in importance as a result of the economic chaos and human suffering caused by the Covid-19 pandemic. While companies are developing more comprehensive criteria, the standards are far from consistent. The reasons for the inconsistencies are numerous, but of greatest concern is the bias of ratings and the lack of public disclosure about the criteria and standards used in making those ratings.
Fear Not: ESG Does Not Spell Doom for Energy Funds
Traditional energy funds that target investments in fossil fuel industries continue to face strong and increasing Environmental, Social and Governance (ESG) pressures, especially from institutional and European-based investors. With increasing ESG regulation from the European Union, possible ESG disclosure guidelines from the U.S. Securities and Exchange Commission and heightened focus put on ESG by world health issues, there is little reason to believe that ESG scrutiny will abate.
Profitable Investing With a Cause
Jeff Remsburg – Investorplace.com
Quaker Oats will be retiring its 131-year old “Aunt Jemima” brand …Mars’ Food will be “evolving” its Uncle Ben’s rice brand …ConAgra Brands has begun a “complete brand and package review” of its Mrs. Butter-Worth’s syrup …And B&G Foods announced it will also conduct a review of its Cream of Wheat packaging. The image has been little changed since 1893 …These changes stem from the spotlight on racial inequality that has taken center stage in recent weeks following the tragic deaths of George Floyd, Breonna Taylor, and Ahmaud Arbery. We’re living through a period of history in which social concerns are having an enormous impact on corporate America. But we’re also seeing greater corporate consideration for environmental concerns … for shareholder transparency … for worker safety … for companies that serve a broader social purpose beyond just bottom-line growth. This wider consciousness is summed up by the acronym “ESG” — Environmental, Social, and Governance.
Coronavirus could be a ‘major turning point’ for sustainable investing, says JPMorgan
Pippa Stevens – CNBC
The coronavirus pandemic could lead to a greater adoption of ESG investing, JPMorgan said Wednesday. ESG investing, or when a company’s environmental, social and governance factors are considered alongside traditional financial metrics, saw record inflows in the first quarter. “While ‘tipping-point’ has been used to characterize this market for almost as long as it has existed, we do believe a substantial shift is under way: stakeholders are increasingly pricing in sustainability preferences,” JPMorgan said.
Former Goldman equities trading head Chavez joins board of Santander; Martin Chavez joins the board of Santander after confirming his retirement from Goldman Sachs in September.
Hayley McDowell – The Trade
Goldman Sachs veteran and former global co-head of the trading division, Martin Chavez, has been appointed to the board of Santander. Santander said that Chavez will also join the remuneration committee, risk supervision, regulation and compliance committee, and innovation and technology committee for the investment bank.
Paulson closes hedge fund to external investors; Investor who won big on subprime crisis goes private after years of lacklustre performance
Ortenca Aliaj – FT
John Paulson, the billionaire investor who rose to fame during the financial crisis with a lucrative bet against US subprime mortgages, is closing his hedge fund to external investors after years of lacklustre performance.
Can BNP Paribas beat the investment banking jinx? The French lender is the latest European bank with ambitious plans to take on Wall Street
Owen Walker and Stephen Morris in London and David Keohane – FT
BNP Paribas wants to become the dominant force in European investment banking, displacing Deutsche Bank and Barclays and taking on Wall Street heavyweights such as JPMorgan Chase.
London Fund Manager in Court Over German Tax Scandal
Gaspard Sebag, Karin Matussek, and Donal Griffin – Bloomberg
Gabay on bail after being detained at French airport last week; CEO is first person detained outside Germany in Cum-Ex probe
Duet Group Chief Executive Officer Henry Gabay appeared in a French court Wednesday after being apprehended as part of a German probe into the Cum-Ex tax scandal.
Norway’s Best-Performing Stock Jumped More Than 600% This Year
Mikael Holter – Bloomberg
ArcticZymes benefiting from global drive to study coronavirus; Company uses Arctic enzymes to make medical research products
ArcticZymes Technologies ASA, a Norwegian biotechnology company, has seen a seven-fold increase in its share price so far this year as it benefits from the pharmaceutical industry’s Covid-19 efforts, making it Norway’s best-performing stock so far in 2020.
Ukraine scraps bond sale after central bank governor quits; Departure ‘came out of the blue’ said investment managers set to buy the debt
Roman Olearchyk and Tommy Stubbington – FT
Ukraine has cancelled a bond sale hours after the country’s central bank chief Yakiv Smolii announced his resignation due to “systematic political pressure” that he said threatened the institution’s independence.
China’s Corporate Bond Defaults Unveil Hidden Blind Spots
Molly Dai – Bloomberg
China’s policy makers have been walking a tightrope between countering the economic damage caused by the Covid-19 crisis and fueling another debt bubble from the latest spending spree.
Old Mutual’s Share Price Is Focus in Zimbabwe’s Currency War
Ray Ndlovu – Bloomberg
State wants an end to use of unofficial exchange rates; Government halted bourse, mobile money to stabilize currency
The share price of one of Africa’s oldest insurers is taking center stage in Zimbabwe’s battle to bring order to its chaotic foreign-exchange system. In the latest in a series of attempts to stabilize its currency, the government wants to eradicate the Old Mutual Implied Rate. The gauge, used by domestic companies to determine the future cost of goods and services, calculates a potential forward rate for the Zimbabwe dollar by measuring the difference between Old Mutual Ltd.’s share prices in Johannesburg, London and Harare.
Blast at Glencore Oil Refinery in Cape Town Leaves Three Dead
Paul Burkhardt and John Viljoen – Bloomberg
At least three people died in an explosion and a fire at a South African oil refinery owned by a unit of Glencore Plc. A number of people are in the hospital after the incident at the Cape Town facility, Richard Bosman, executive director for safety and security in the city, said on CapeTalk radio. Callers to the radio station described hearing a “massive explosion” that rattled windows and roofs. Others said they had seen damage caused to the plant.
The Retail Apocalypse Is Getting Darker for U.K. Landlords
Jack Sidders – Bloomberg
Collapse of Intu Properties likely to further hit mall values; Rent collection continues to plunge as more retailers fail
The collapse of mall landlord Intu Properties Plc is about to send shockwaves through a sector that’s already reeling. Nine of the U.K.’s biggest shopping centers could potentially be sold into a market that had already seized up before the virus struck. With the tenants of those properties only paying a fraction of their rent as the pandemic deepens a prolonged retail crisis, the risk they’re sold at knock-down prices threatens to further sink the values of malls nationwide.
Accenture Cuts Up to 900 Jobs as Pandemic Takes Toll on Demand
Hugo Miller – Bloomberg
Consulting firm looks to reduce expenses as demand falls; Possible job cuts account for up to 8% of its U.K. workforce
Consulting firm Accenture is cutting up to 900 jobs, or 8% of its U.K. workforce, as the coronavirus pandemic prompted a sharp slump in demand for its advisory work.
U.K. Sets Out New Red Tape for Post-Brexit Trade Over Irish Sea
Joe Mayes – Bloomberg
HMRC says exporters into Northern Ireland need new paperwork; New system to police checks is still in development, untested
Companies exporting goods into Northern Ireland from the rest of the U.K. after Brexit will need to file new customs paperwork, an extra headache for businesses when Britain completes its split from the European Union at the end of the year.
EU Says Serious Divergences Remain After Latest Brexit Talks
EU chief Brexit negotiator Michel Barnier says serious divergences remain after four days of restricted talks between the EU and the U.K., Bloomberg News reports.
China Announces New Retaliation Against U.S. News Outlets; Beijing demanded that four organizations submit information about their operations in China, adding to tensions with the U.S. over the treatment of journalists.
Raymond Zhong – NY Times
China demanded on Wednesday that four American news organizations provide the government with information about their staffs, finances and real estate holdings inside the country, in what the Ministry of Foreign Affairs said was retaliation for the Trump administration’s recent actions against Chinese news outlets in the United States.