Hits & Takes
John Lothian & JLN Staff
In celebration of Black History Month, FIA President & CEO Walt Lukken engaged in a meaningful conversation on the MarketVoice podcast with Jahmal Cole, the founder and CEO of My Block, My Hood, My City. This inspiring interview sheds light on Cole’s personal journey and the admirable mission of his nonprofit organization, which is dedicated to inspiring youth, empowering communities, and fostering positive change one block at a time. Over the past decade, Cole has worked tirelessly to remove barriers for young individuals in under-resourced Chicago neighborhoods, focusing on enhancing youth programming and promoting educational achievement. Listen to the full episode. It is also available on Spotify, Apple Podcasts and Google Podcasts.
The CME Group, which bills itself as the world’s top derivatives marketplace, reported record-breaking January 2024 activity, with an overall average daily volume (ADV) of 25.2 million contracts, marking a 16% increase compared to January 2023. This milestone was driven by soaring interest rate ADV, particularly in the SOFR complex and U.S. Treasury futures, which experienced 27% growth. Additionally, the company achieved record January options ADV of 6.1 million contracts, a 26% rise. Various other asset classes, including equity index, energy, agricultural, foreign exchange, and metals, also recorded double-digit ADV growth during the month.
Today we published a video I shot back in late December with retired industry analyst Richard Repetto, who at the time was being honored by the charity Tuesday’s Children. The video is part of the John Lothian Profiles series, which looks at individuals’ careers. Given Repetto’s career analyzing electronic trading firms, this could easily have fallen into The Path to Electronic Trading video series. His is a unique perspective as the premier industry analyst examining the electronic trading trend starting in 1999.
King Charles has been diagnosed with cancer, the Financial Times reported. This diagnosis comes after he was recently treated for an enlarged prostate. When I was tested for prostate cancer, I underwent a bone scan, which looked for cancer across my body. I assume Charles underwent one as well. I was lucky to find my prostate cancer because of other health issues. Likewise, Charles is lucky to have found his cancer due to his prostate treatments. I wish him the best of health with his treatments. Here is another example for men to stay in tune with their prostate’s health.
Bloomberg reports “Jack Dorsey’s Bluesky Opens Up Social Network to Everyone.” While Twitter has continued to decline since Mr. Dorsey launched his new social network, the real winner seems to be LinkedIn, which has seen an explosion of corporate news on its site. I wonder if the moment has passed for Mr. Dorsey and whether the whole concept of decentralization is wrong in the first place. I saw for myself how the internet became more powerful when its decentralized information bits were centralized.
The latest new member of the FIA is the Columbia Research Corporation. The Columbia Research Corp. provides fact-finding, due diligence and investigative services to law firms, business trade associations, private equity funds and other clients in the areas of financial fraud, greenwashing, carbon offsets, sustainable finance and cross-border environmental issues. Its principal, Daniel Seligman, is an attorney-at-law and certified fraud examiner and has served as an NFA arbitrator.
Ted Bragg is starting a new position as head of US Trading at FNZ Group. He previously served as vice president of fixed income at Nasdaq and senior vice president at ICAP, among other roles.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Our most read stories from our previous edition of JLN Options were:
Options Trading Is Going Gangbusters. The Market Now Has a Data ‘Superhighway’ to Match from The Wall Street Journal.
Intercontinental Exchange Reports January 2024 Statistics from Intercontinental Exchange.
China Tightens Some Trading Restrictions for Domestic and Offshore Investors from Bloomberg via Yahoo Finance. ~JB
Subscribe to the JLN Options Newsletter HERE (it’s free).
Rich Repetto Reflects on a Research Career Analyzing Electronic Trading
John Lothian News recently interviewed the recently retired Piper Sandler Managing Director Rich Repetto for the John Lothian Profiles video series. The interview coincided with Repetto’s recognition by the charity Tuesday’s Children. Repetto shared insights from his career journey in the financial industry, which started rather late. Repetto began work on a Wharton MBA at age 36 after graduating from West Point and serving in the U.S. Army as a helicopter pilot for five years. At Wharton he took every finance class he could to catch up, he said.
CFTC Statement Regarding the Passing of Former Chief of Staff Mike Gill; The CFTC Community is deeply saddened by the sudden passing of former Chief of Staff Michael “Mike” Gill.
Washington, DC – Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam issued the following statement on behalf of the Commission regarding the passing of former Chief Operating Officer and Chief of Staff Mike Gill: “The CFTC community is deeply saddened to hear of the passing of friend and former colleague Mike Gill. With his genuinely affable demeanor and respect for the work of the Commission and its people, Mike facilitated a true sense of comradery in effectively negotiating some of the most complex issues and seemingly unresolvable conflicts of our time. Mike’s ability to connect with agency stakeholders at all levels, ensuring their interests received appropriate attention and consideration within the CFTC and in the larger financial regulatory space helped fortify his and the agency’s reputation as an engaged, thoughtful and forward-thinking regulator. Mike demonstrated a passionate pursuit of equity and a commitment to public service throughout his professional career which he mirrored in his private life as a devoted husband, father, and friend. His presence and continued support of our mission and core values will be greatly missed.”
****** This statement came out shortly after yesterday’s newsletter went out.~JJL
SIFMA Fixed Income Market Close Recommendation In The U.S., The U.K. And Japan For Presidents Day
SIFMA has confirmed its previous recommendation for a full market close on Monday, February 19 for the trading of U.S. dollar-denominated fixed income securities in the U.S., the U.K. and Japan in observance of the U.S. Presidents Day Holiday. This recommendation applies to trading of U.S. dollar-denominated government securities, mortgage- and asset-backed securities, over-the-counter investment-grade and high-yield corporate bonds, municipal bonds and secondary money market trading in bankers’ acceptances, commercial paper and Yankee and Euro certificates of deposit.
***** Thank you, Abe and George.~JJL
Monday’s Top Three
Our top story Monday was Bloomberg’s Reddit Picks New York Stock Exchange for IPO in Win Over Nasdaq. Second was Intercontinental Exchange Reports January 2024 Statistics, an ICE press release. Third was Musk Took Drugs With Some Tesla Board Members, WSJ Says, from Bloomberg.
Wall Street Snubs China for India in a Historic Markets Shift; Investors are paying close attention to the contrasting trajectories of two of Asia’s greatest powers.
Srinivasan Sivabalan, Chiranjivi Chakraborty, and Subhadip Sircar – Bloomberg
A momentous shift is under way in global markets as investors pull billions of dollars from China’s sputtering economy, two decades after betting on the country as the world’s biggest growth story. Much of that cash is now heading for India, with Wall Street giants like Goldman Sachs Group Inc. and Morgan Stanley endorsing the South Asian nation as the prime investment destination for the next decade.
ADM’s accounting procedures probed by US prosecutors; Justice department interviews former staff of agricultural commodities trader amid scrutiny of nutrition business
Stefania Palma and Susannah Savage – Financial Times
US prosecutors are investigating accounting procedures at Archer Daniels Midland, the global agricultural commodities trader that placed its chief financial officer on leave last month pending its own internal probe. Chicago-based ADM is one of the world’s largest traders and processors of grains and oilseeds, crops it transforms into food ingredients, animal feed and fuel. It is one of the ABCD companies – along with Bunge, Cargill and Louis Dreyfus – that are estimated to handle more than 70 per cent of global food trade.
America’s Biggest Bank Is Growing the Old-Fashioned Way: Branches; Banking has gone digital, but JPMorgan is building bricks-and-mortar branches
David Benoit – The Wall Street Journal
JPMorgan Chase is giving the humble bank branch some swagger. Hundreds of branches at rival banks are being closed each year, and customers are shunning the teller and choosing the mobile app. But at the nation’s biggest bank, old-fashioned bricks-and-mortar locations are part of the secret sauce. The bank Tuesday is expected to announce plans to double down, continuing a yearslong strategy. JPMorgan plans to build 500 new branches in the next three years, filling out cities it has recently entered such as Boston, Philadelphia and Charlotte, N.C. For context: Only 17 banks have more than 500 branches today. JPMorgan has close to 5,000.
Xi to Discuss China Stocks With Regulators as Rescue Bets Build; Authorities working around the clock, people familiar say; Chinese stocks rally across the board, with small caps leading
Anticipation is mounting for more forceful Chinese government efforts to end the nation’s stock rout, with regulators planning to brief President Xi Jinping on the market as soon as Tuesday. Chinese stocks extended their rebound after Bloomberg reported regulators led by the China Securities Regulatory Commission plan to update the top leadership on market conditions and the latest policy initiatives, according to people with knowledge of the matter. The CSI 300 benchmark closed 3.5% higher in its best day since late 2022. Small-cap equities that have so far borne the brunt of the rout also jumped, with the CSI 1000 gauge up 7%, the most since 2008.
Top Chinese Hedge Fund Banxia Slashes Stocks for ‘Survival’ in Rout; Li Bei’s fund decided to ‘lose an arm’ as declines deepen; Firm says in letter policy moves fell short of expectations
A top Chinese macro hedge fund said it slashed stock positions last month as the nation’s market rout deepened, taking losses after acknowledging mistakes betting on a rapid economic recovery. Shanghai Banxia Investment Management Center “significantly reduced” its equity assets in the middle of January to cut losses, only keeping exposure to safer high-dividend stocks and bigger companies in the CSI 300 Index, according to its January letter to investors.
Why It’s So Risky Doing Business in China; Beijing continues to lock up foreign executives without notice. It’s the wrong signal to send to the international community.
Karishma Vaswani – Bloomberg
There is an assumption inherent in the world of international business that as long as you don’t break the law, life should be relatively uneventful. That’s not always the case in China. Australian writer and blogger Yang Hengjun, who was detained during a visit to Guangzhou in 2019, received a suspended death sentence on Monday after years of intense negotiations between Beijing and Canberra that have come to naught. Australian Foreign Minister Penny Wong has called it a harrowing verdict.
Big Oil Embraces Corn as Former Foes Unite Against EV Threat; Oil firms and farmers join to push for more ethanol in cars; Legislation would allow year-round sales of higher ethanol mix
Kim Chipman and Jennifer A Dlouhy – Bloomberg
After decades of battling against more ethanol going into US cars, Big Oil is joining Big Agriculture in a push to expand use of the corn-based biofuel. The longtime foes are increasingly finding common ground as the growth of electric vehicles threatens to slash gasoline demand. Fossil-fuel giants are also ramping up investment in renewable fuels in a bid to capture government incentives aimed at cutting emissions and curbing climate change.
The Trick That Makes Climate Investing in Poor Countries Less Risky; Clean energy companies in the developing world struggle to borrow money at favorable terms. The Green Guarantee Company aims to change that.
Zahra Hirji and Akshat Rathi – Bloomberg
When it comes to climate change, poor countries face a double whammy: Not only do they experience some of the worst impacts of global warming, they then struggle to access the big sums of money needed for climate solutions because of risk-shy investors. A new company wants to change that.
Cantor Fitzgerald CEO Howard Lutnick backs cryptocurrency Tether despite Hamas links
Josh Kosman – NY Post
Cantor Fitzgerald CEO Howard Lutnick is taking heat over the New York financial giant’s massive investment in Tether – a cryptocurrency popular with terrorist groups including Hamas. Last month, Lutnick – a fierce supporter of Israel whose brother was among the nearly 3,000 killed in the 9/11 attacks – touted Tether at the World Economic Forum in Davos, Switzerland, reassuring investors that the company’s balance sheet is in order.
If shadow banking looks like a duck…Maybe it should be regulated like one? As private credit proliferates, we must think more seriously about its risks
Leah Downey – Financial Times
Banking is the business of creating and disseminating credit. Bankers decide who gets a loan and on what conditions – and they possess this power by virtue of a deal made with the state. In 1864, the National Banking Act gave banks chartered by the US government an effective monopoly over the creation of money. The government franchised its constitutional power to “coin money” to private bankers. In exchange, it required those same banks to hold its bonds in reserve, thus creating a guaranteed demand for government debt. This quid pro quo was a deal that most countries have seen fit to maintain ever since.
The rise of agricultural populism; European politicians have to balance demands of farmers with the need for climate action
The Editorial Board – Financial Times
From France to Germany, to Italy, to Greece: the juggernaut of EU farmers’ protests rolls on. Agricultural protests are as old as the EU itself – and farmers, who can bring along tractors and piles of manure to make their point, are a powerful lobby; annual farm subsidies of about EUR60bn make up roughly a third of the EU budget. Yet rarely have demonstrations been seen across so many countries at once. Policymakers face a tricky balance: between caving in too far to the industry over, say, vital climate measures – or allowing hard-right parties to capitalise on farmers’ grievances in EU elections.
DTCC issues new affirmation progress report and details post-trade best practices to achieve T+1
With less than four months until the US moves to a T+1 settlement cycle, DTCC, the premier post-trade market infrastructure for the global financial services industry, today issued a report, “Hitting 90% Affirmation by 9:00 PM ET on Trade Date: The Key to T+1 Success”.
Piper Sandler Strengthens Equity Capital Markets Team with the Addition of Paul Robinson
Piper Sandler Companies
Piper Sandler Companies (NYSE: PIPR), a leading investment bank, is pleased to announce the addition of Paul Robinson as a managing director and head of equity-linked capital markets. He will be based in New York and report to Dave Stadinski and Chad Huber, global co-heads of equity capital markets at Piper Sandler. Robinson will lead the convertible origination business and be responsible for the structuring and execution of all convertible and other corporate equity-linked transactions.
Morningstar Calls Cathie Wood The Worst ‘Wealth Destroyer’
Matt Krantz – Investor’s Business Daily
No one wants to be known as the largest wealth destroyer – especially when the S&P 500 is rising. But that’s exactly what Morningstar is calling Cathie Wood’s ARK Family of funds. ARK ETF Trust, which runs the popular ARK Innovation ETF (ARKK), has wiped out $14.3 billion in investors’ wealth over the past 10 years, says a new analysis from Morningstar. That ranks it as the No. 1 wealth destroying fund family in that time. ARK has vaporized twice the value of No. 2, KraneShares, Morningstar says.
Corporate America Tweaks Diversity Initiatives Amid Pushback; Legal pressure and other criticisms have led to a quiet rethinking of the programs
Richard Vanderford – The Wall Street Journal
Corporate America’s diversity initiatives are here to stay, but they are being adjusted in response to lawsuits and intense scrutiny. Businesses are trying to fashion programs that foster inclusion without running afoul of the law and potentially bringing costly consequences, according to lawyers and corporate advisers working on such policies. That means some are abandoning the most legally risky and potentially discriminatory practices, such as numerical targets that can be seen as “quotas” or the use of unconscious bias training that casts blame.
UBS Restarts Buyback as Ermotti Slogs Through ‘Pivotal’ Year; Shares fall after 4Q results, targets disappoint investors; UBS boosts cost-saving target, says 2024 will be tough
Myriam Balezou – Bloomberg
UBS Group AG will buy back up to $1 billion in shares this year, as the bank seeks to keep investors focused on the upside of its complex integration of Credit Suisse. The Zurich-based bank said the repurchase program will commence following the legal merger of the two banks, which is scheduled for the second quarter. Expenses related to the integration in the final three months of 2023 helped push the bank to its second-straight quarterly loss.
Why Russia’s TOS-1A Thermobaric Weapon Is So Deadly and Controversial
The Wall Street Journal
Russia’s TOS-1A “vacuum bomb” is so deadly that analysts advised Ukraine to destroy the weapons before Russia could use them. WSJ explains how its unique explosion can suck the air out of victims’ lungs, and why they’re so controversial.
Gazans search in vain for medicines; Cancer, diabetes and heart disease patients among those facing chronic shortage of treatments
Mai Khaled and Heba Saleh – Financial Times
Standing in front of the almost bare shelves of his Nejma pharmacy in the town of Rafah, Hammam Ali reeled off all the illnesses for which he said there were no medicines in the Gaza strip. These include common conditions such as asthma, diabetes, hypertension and heart disease. There were no antibiotics, he said, neither were there liquid medicines for young children and drugs to treat viral infections and high fevers. “Within a month after the start of the war on October 7, all essential drugs and their known alternatives became unavailable in Gaza,” said Ali.
Exchanges, OTC and Clearing
Tigress Financial Partners to Offer Co-Branded Access to the ICE TMC Bond Trading Platform Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of technology and data, today announced that Tigress Financial Partners, the nation’s only certified disabled and women-owned financial services firm, will provide a co-branded version of the ICE TMC bond platform to its network of dealers and investment managers. ICE TMC is a market leading, anonymous, all-to-all Alternative Trading System (ATS) operated by ICE Bonds, offering execution of municipal, corporate, agency and government bonds, as well as mortgage-backed securities and Certificates of Deposit. By providing ICE Bonds’ innovative private-labeled technology to Tigress Financial’s customers, they will have direct access to ICE Bonds’ network of liquidity providers via an intuitive, user-friendly platform for discovering and trading fixed income securities.
TMX Group Limited Declares Dividend of $0.18 per Common Share
The Board of Directors of TMX Group Limited today declared a dividend of $0.18 on each common share outstanding. This dividend is payable on March 8, 2024 to shareholders of record at the close of business on February 23, 2024. TMX Group hereby advises that this dividend is designated as an “eligible dividend” for Canadian income tax purposes.
Cboe Global Markets Reports Trading Volume for January 2024
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today reported January monthly trading volume statistics across its global business lines.
Fidelity Investments Canada Returns To Cboe Canada For Launch Of 7 New ETFs And ETF Series
Cboe Canada is proud to announce the return of Fidelity Investments Canada ULC (“Fidelity”) for the launch of seven new ETFs and ETF series listing today. The new offerings are now trading on Cboe Canada under the following names and symbols:
Weakened commodity prices cast a shadow on farmer sentiment
The most recent findings from the Purdue University/CME Group Ag Economy Barometer reveal a downturn in farmer sentiment at the start of 2024. The January barometer fell to a reading of 106, 8 points lower than in December. Producers expressed a more pessimistic perspective about their farms’ current situation and future prospects. The Current Conditions Index fell 9 points, and the Future Expectations Index dropped by 7, both compared to December. The anticipation of weaker farm income in 2024 contributed to the overall decline, reflected in the Farm Financial Performance Index at 85, a 12-point decrease from the previous month. This month’s Ag Economy Barometer survey was conducted from Jan. 15-19.
CME Group to Launch U.S. Corporate Bond Index Futures in Summer 2024
CME Group, the world’s leading derivatives marketplace, today announced that its interest rate complex will expand in summer 2024 with the launch of U.S. Corporate Bond Index futures, pending regulatory review. The new futures contracts will be based on the Bloomberg U.S. Corporate Index, which measures the performance of investment grade corporate bonds, and the Bloomberg U.S. High Yield Very Liquid Index, which is designed to measure a liquid, diversified component of the high yield corporate bond market.
EEX Group Monthly Volumes – January 2024
EEX Group reports its January volumes with the following highlights: 2024 saw a dynamic start with the total monthly trading volume on global power markets of EEX Group at 938.4 TWh, a 45% increase year-on-year and a 21% growth compared to December 2023 (775.4 TWh). Volumes on the EPEX European power spot markets grew by 27%, reaching a record monthly level of 74.8 TWh, while European power derivatives volumes reported a remarkable 88% YoY expansion to 589.9 TWh. Several of the core power derivatives markets continued strong growth in January 2024, including records reported on the German, Spanish, Swiss, Dutch and Belgian markets.
JPX Monthly Headlines – January 2024
JPX group companies undertake various initiatives and disseminate information with the aim of providing the most attractive markets to all users. Every month, we showcase the highlights of these efforts in short and concise summaries just for you.
ASX Group Monthly Activity Report – January 2024
Attached is a copy of the ASX Group Monthly Activity Report for January 2024. Release of market announcement authorised by: Johanna O’Rourke Group General Counsel and Company Secretary
Suspension Of Copper-Grade A Brand JNMC
London Metal Exchange
Summary. Please be advised that no further deliveries of Copper-Grade A brand JNMC, produced by Jinchuan Group Co., Ltd. will be accepted for LME warranting with effect from 6 May 2024.
Atos shares plunge after IT group cancels rights issue and starts debt talks; Indebted French company appoints mediator to oversee refinancing negotiations with lenders
Adrienne Klasa and Leila Abboud – Financial Times
French IT services company Atos is to enter talks with creditors after saying it can no longer go through with a EUR720mn equity fundraising that was destined to shore up its balance sheet. The Paris-based group, whose chair is former UniCredit chief executive Jean Pierre Mustier, said on Monday it had appointed a mediator to oversee refinancing negotiations with lenders. Under French law, the move is a voluntary step before a potential court-supervised debt restructuring.
BNY Mellon expands collaboration with Microsoft to enhance data platform; Using Microsoft Azure cloud and BNY Mellon’s financial data and analytics capabilities, the collaboration aims to bolster BNY Mellon’s data management solution for buy-side and sell-side clients.
Sophia Thompson – The Trade
BNY Mellon and Microsoft are collaborating to expand and enhance the custodian’s data analytics platform. Using Microsoft Azure cloud and BNY Mellon’s financial data and analytics capabilities, the collaboration aims to bolster BNY Mellon’s data management solution for buy-side and sell-side clients.
LMAX Exchange connects to 4OTC’s Libre Liquidity Bridge; New connectivity will offer liquidity providers the ability to stream FX liquidity on LMAX exchange venues globally with ultra-low latency.
Wesley Bray – The Trade
LMAX Exchange has connected with low latency connectivity services provider 4OTC’s Libre Liquidity Bridge service, set to allow liquidity providers to stream FX liquidity on LMAX exchange venues with ultra-low latency. Libre offers connectivity to LMAX Exchange execution venues worldwide including London, New York, Singapore and Tokyo.
Microsoft in deal with Semafor to create news stories with aid of AI chatbot; Collaboration comes as tech giant faces multibillion-dollar lawsuit from the New York Times
Anna Nicolaou – Financial Times
Microsoft is working with media start-up Semafor to use its artificial intelligence chatbot to help develop news stories – part of a journalistic outreach that comes as the tech giant faces a multibillion-dollar lawsuit from the New York Times. As part of the agreement, Microsoft is paying an undisclosed sum of money to Semafor to sponsor a breaking news feed called “Signals”. The companies would not share financial details, but the amount of money is “substantial” to Semafor’s business, said a person familiar with the matter.
Nvidia, Cisco to Help Companies Build In-House AI Computing; Cisco will sell Nvidia equipment with its networking gear; Move is part of effort to spread AI computing to wider market
Ian King – Bloomberg
Nvidia Corp. and Cisco Systems Inc. are teaming up to make it easier for corporations to build their own AI computing infrastructure, an attempt to push the technology beyond the big data-center providers. Under an arrangement announced Tuesday, Cisco will offer Nvidia-based equipment – popular for developing artificial intelligence models – along with its networking gear.
Meta Calls for Industry Effort to Label A.I.-Generated Content; The social network wants to promote standardized labels to help detect artificially created photo, video and audio material across its platforms.
Mike Isaac – The New York Times
Countdown to T+1: Market Readiness and the Push for Automation
As the North American T+1 settlement deadlines fast approach – 28th May 2024 for all US securities settled through DTC and 27th May for Canadian securities – the industry has been ramping up in preparation. And although the shorter settlement cycle promises to increase settlement efficiency, improve liquidity, decrease counterparty risk and reduce overall trading costs, for many market participants the shift has required significant – and costly – adjustments to their post-trade systems and processes.
What Are Cybersecurity ETFs? A Complete Guide
Kent Thune – ETF.com
In today’s increasingly digital world, cybersecurity is no longer just a technical concern-it’s a critical investment opportunity. With cyberattacks on the rise and data breaches dominating headlines, the demand for robust cybersecurity solutions is skyrocketing. This presents a compelling chance for investors to tap into a rapidly growing market through cybersecurity ETFs. But are these ETFs right for you?
US to ban visas for spyware abusers and manufacturers who sell to them; Action is the latest move by the Biden administration to clamp down on software used to target dissidents
Mehul Srivastava – Financial Times
The US will restrict visas for abusers of commercial spyware, including those selling the encryption-busting malware, in an effort to rein in a sprawling, multibillion-dollar industry that has been tied to the repression of dissidents around the world. The visa ban is designed to further punish spyware manufacturers that are credibly accused of deriving “financial benefit” from the sale of military-grade software to countries that abuse it, the US state department said on Monday.
10 must-read cybersecurity books for 2024
Help Net Security
Our list of cybersecurity books has been curated to steer your professional growth in 2024. This selection aims to provide comprehensive information security insights and knowledge, ensuring you stay ahead in your career learning journey throughout the year.
Cato Networks and SASE Cybersecurity Platform: Tech Disruptors
Cato Networks is looking to challenge network security incumbents including Palo Alto Networks and Fortinet by deploying its SASE platform offering to enterprise customers. In this episode, CEO Shlomo Kramer sits down with Bloomberg Intelligence senior analyst Mandeep Singh to talk about the convergence of point products such as secure web gateway, SD-WAN and endpoint detection with a SASE approach.
The far right is scaring away Washington’s private hacker army; Scrutiny from conservative activists and management gripes are straining the government’s plan to enlist elite security pros in the fight against malicious hackers.
John Sakellariadis – Politico
Some of the country’s top cybersecurity experts who’ve been helping protect critical networks say they’re quietly retreating from a highly touted government partnership, citing frustrations with its management and pressure from conservative critics.
Bitcoin ETFs Are Turning Into a Drag for Coinbase
Joe Light – Barron’s
The launch of Bitcoin exchange-traded funds hasn’t led to a predicted boom in trading volume and prices. In fact, the ETFs may even be a drag for Coinbase Global, according to an analyst. Since the ETFs launched to much fanfare in January, average daily spot trading volume on Coinbase has fallen to $1.9 billion from $2.5 billion in the 30 days preceding their launch, according to Mizuho analyst Dan Dolev.
Coinbase’s spot bitcoin ETF volumes drag on rising outflows
Julie Hyman and Josh Lipton – Yahoo Finance
Coinbase (COIN) sees its spot bitcoin ETF outflows exceeding inflows. Coinbase stock slumps by over 9% at Monday’s close. Yahoo Finance Live examines the crypto platform’s stock and what is weighing on it. For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Crypto remains lawyered up
Peter McKay – via LInkedIn
Wow, there is a lot of litigation in this week’s headlines. The token market has improved somewhat lately, but seems the finger-pointing and fallout from the last bear cycle are still very much with us: Bankrupt crypto lender Genesis Global Capital is seeking court authorization to sell $1.6 billion in assets, including a large position in Grayscale Bitcoin Trust shares. (The Block)
We’re heading for new cryptocurrency crisis, predicts Wall Street veteran
Leah Montebello — The Daily Mail
The crypto industry is doomed to repeat the mistakes that led to the collapse of FTX, a top Wall Street short seller has warned. Cryptocurrencies were plunged into crisis in 2022 after one of the biggest trading platforms FTX went bankrupt. Thousands of people lost a combined £7billion after boss Sam Bankman-Fried funnelled customer deposits into a separate company he owned. This turned out to be one of biggest ever US financial frauds and led to his conviction last year.
Crypto exchange Gemini says bankrupt Genesis moves to authorize sale of trust assets
Cryptocurrency exchange Gemini Trust Co said on Saturday that crypto lender Genesis has filed a motion in U.S. Bankruptcy Court authorizing a sale of trust assets and seeking authorization to monetize its interests in two Grayscale Ethereum trusts, securities that provide investors exposure to cryptocurrency. The motion filed by Genesis late on Friday seeks authority for Gemini to monetize the initial collateral of 30,905,782 shares of Grayscale Bitcoin Trust, Gemini said.
Genesis Seeks Approval to Sell $1.6B in Bitcoin, Ether Trust Holdings; Nearly $1.4 billion of Genesis’ assets were held in Grayscale Bitcoin Trust (GBTC), which has since converted to a spot exchange-traded fund (ETF).
Shaurya Malwa – CoinDesk
Stablecoin Tether’s Increasing Dominance Is Bad for Crypto Markets, JPMorgan Says; Other stablecoins such as USD Coin may benefit from the coming regulatory crackdown and gain market share, the report said.
Will Canny – CoinDesk
Meta to Detect and Label More AI-Created Posts as Elections Loom; Meta to begin detecting AI-generated posts from Google, OpenAI; Manipulated media shared by politicans can still receive label
Kurt Wagner and Jillian Deutsch – Bloomberg
Meta Platforms Inc. will begin labeling more posts that were created using artificial intelligence tools as part of a broader effort to prevent misinformation and deception from spreading on Facebook, Instagram and Threads during a critical election year. Meta is working with other tech companies to create common technical standards for identifying these kinds of AI-generated posts, including adding invisible watermarking and metadata to images when they are created, the company said on Tuesday. Meta is then building software systems to detect these invisible markers so that it can label AI-created content even if it was made by a competing service.
‘In a word, horrific’: Trump’s extreme anti-environment blueprint; Allies and advisers have hinted at a more methodical second term: driving forward fossil fuel production, sidelining scientists and overturning rules
Oliver Milman and Dharna Noor – The Guardian
The United States’s first major climate legislation dismantled, a crackdown on government scientists, a frenzy of oil and gas drilling, the Paris climate deal not only dead but buried. A blueprint is emerging for a second Donald Trump term that is even more extreme for the environment than his first, according to interviews with multiple Trump allies and advisers.
US Republicans prepare to torpedo bipartisan deal for Ukraine aid; Donald Trump trashes Senate bill, as rift in the party threatens to kill last chance to boost funding for Kyiv
James Politi – Financial Times
A bipartisan deal backed by President Joe Biden to deliver billions of dollars in US aid to Ukraine along with stricter immigration policies is facing a widening groundswell of resistance from Republicans in Congress, posing a major threat to its progress on Capitol Hill. The legislation worth $118bn agreed on Sunday by Democratic and Republican negotiators in the Senate could be the last chance for the Biden administration to secure new military support for Ukraine in its defence against Russia’s invasion – alongside other national security goals including aid to Israel and Taiwan.
FinCEN Pressured to Implement Anti-Money-Laundering, Sanctions Whistleblower Program; U.S. senators expresses concern about delay in the program’s full implementation
Mengqi Sun – The Wall Street Journal
A bipartisan group of U.S. senators is demanding the Financial Crimes Enforcement Network explain its delay in fully implementing a whistleblower award program for reporting possible money-laundering and sanctions violations. Sens. Chuck Grassley (R., Iowa), Elizabeth Warren (D., Mass.) and Raphael Warnock (D., Ga.) said in a letter to the anti-money-laundering bureau of the U.S. Treasury Department that they were concerned about its lack of progress in implementing the program, three years after the bill mandating it was enacted.
Brussels bows to farmers’ protests by slashing environmental targets; Commission chief Ursula von der Leyen says plan to halve pesticide use had become ‘symbol of polarisation’
Alice Hancock and Andy Bounds – Financial Times
Brussels will scrap a plan to halve pesticide use, marking a further concession to protesting farmers who have spooked EU governments and another blow to its environmental agenda. The retreat by European Commission President Ursula von der Leyen is part of a wider scaling back of her green ambitions in a bid to placate farmers, a key constituency for her centre-right party that is seeking to remain the EU’s most powerful parliamentary group in elections this summer.
Polish state auditor claims oil group sold assets for less than they were worth; Report says Orlen engaged in cut-price disposals to complete merger with rival
Raphael Minder – Financial Times
Banks Sue Regulators Over Anti-Redlining Rule; A new lawsuit says federal agencies overstepped their authority in a rule forcing banks to do business in underserved communities.
Emily Flitter – The New York Times
Some of the banking industry’s most powerful trade groups sued the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency on Monday, claiming that the regulators overstepped their authority in updating a law meant to reverse the effects of redlining. In October, the regulators imposed new frameworks for assessing whether banks are abiding by the 1977 Community Reinvestment Act, which requires banks to do business in neighborhoods made up largely of racial minorities or low-income households that they typically shunned.
Commissioner Johnson to Deliver Keynote Address at Women in Housing & Finance Public Policy Luncheon
Commissioner Kristin N. Johnson will deliver a keynote address at the Women in Housing & Finance’s monthly public policy luncheon.
An Investor Protection Call for a Commitment to Professional Skepticism and Audit Quality
Paul Munter – SEC
It is well-established that high quality audits of financial statements play a key role in investor protection and in building and preserving investor confidence. The Public Company Accounting Oversight Board (“PCAOB”) reported a troubling increase in deficiency rates found in its recent inspections. In its 2022 inspections of audits performed in 2021, the PCAOB inspections program found that insufficient audit evidence was obtained to support the auditor’s opinion in 40% of inspected audits. In its 2021 inspections, this same deficiency rate was 34%, up from 29% in its 2020 inspections. This is a troubling trendline in PCAOB inspections results.
SEC Obtains Judgments Against Former Co-CEOs of Tech Startup Bitwise Industries
On January 31, 2024, the U.S. District Court for the Eastern District of California entered judgments against Jake Soberal and Irma Olguin, Jr., the former co-CEOs of Fresno, California-based private technology services startup Bitwise Industries Inc., in an action alleging that they misled investors about the company’s finances.
Charges laid following ASIC’s investigation into suspected self-managed super investment scam
Joseph Cullia and Zoran Markovic, two Melbourne men allegedly involved in a sophisticated self-managed super fund (SMSF) scam targeting Australian investors, have appeared before the Melbourne Magistrates Court today charged with various criminal offences following an ASIC investigation.
Final reminder for unregistered financial advisers
From 16 February 2024, advisers who provide personal advice to retail clients, together with their AFS licensee(s), will be in breach of the law and face potential regulatory action.
From 16 February 2024, all relevant providers, including time-share advisers, must be registered with ASIC. Provisional relevant providers cannot be registered. Between 1 February 2024 and 5 February 2024, ASIC individually emailed relevant providers who were not registered as at 1 February 2024, reminding them of the requirement to be registered by their AFS licensee.
Investing and Trading
Commercial real estate a ‘manageable’ problem but some banks will close: Powell
David Hollerith – Yahoo Finance
Federal Reserve Chair Jerome Powell is predicting that more small banks will likely close or merge due to commercial real estate weaknesses, but that the problem is ultimately “manageable.” The central bank official made this point during a “60 Minutes” interview that aired Sunday night. It was Powell’s first comments about the industry following a new bout of turmoil cascading through the stocks of many regional banks.
Can Harvey Schwartz fix Carlyle? After a bungled succession, the former Goldman Sachs banker is a year into his bid to revive the US private equity house
Antoine Gara and Harriet Agnew and Will Louch – Financial Times
In December, a group of about 100 former employees of Carlyle Group gathered at the law firm Latham & Watkins in Manhattan just before the Christmas holidays for a party among old friends. In earlier years, the unsanctioned gathering was frowned upon by the buyout group’s previous chief executive.
Ex-Credit Suisse chief Tidjane Thiam’s Spac sued by Chinese partner; China Bridge Capital lawsuit underscores how quickly relations soured as Spac boom ended
Stephen Morris – Financial Times
Former Credit Suisse chief Tidjane Thiam has been embroiled in a bitter dispute with his Spac partner Edward Zeng after the Chinese entrepreneur’s firm sued Thiam’s company for allegedly refusing to pay $6mn in advisory fees. Thiam’s special-purpose company Freedom Acquisition is in settlement talks with Zeng’s company China Bridge Capital, two people with knowledge of the dispute said.
Rising noise levels in markets test investors; In a volatile year, staying invested will matter as events could turn quickly
Johanna Kyrklund – Financial Times
Equity markets have largely made a strong start to 2024 as investors rushed to price in a monetary policy pivot – in the form of anticipated rate cuts – from central banks. That has left valuations looking stretched across asset classes. But it is already clear that 2024 will bring many different events that will lead to a reshuffling of the pack of investment opportunities.
Private equity buys majority stake in US accounting firm Baker Tilly; Hellman & Friedman-led deal is largest in a sector reconsidering its partnership model
Stephen Foley and Antoine Gara and Arash Massoudi – Financial Times
The US accounting firm Baker Tilly has agreed to sell a majority stake to the investment groups Hellman & Friedman and Valeas, marking the largest private equity deal to date in the sector. The sale gives Baker Tilly US an enterprise value of more than $2bn and capital to fund what its chief executive Jeff Ferro called an “extremely aggressive” acquisition strategy, signalling the firm’s ambition to challenge RSM, Grant Thornton and BDO in a mid-tier of accounting giants outside the Big Four.
Anglo American boss resists asset sales despite investor pressure; Wanblad warns that thousands of job losses are likely in the platinum business
Harry Dempsey – Financial Times
Private equity owners pile on debt to pay themselves dividends; Sponsors under pressure from investors to return cash but are finding it harder to offload companies
Harriet Clarfelt and Antoine Gara – Financial Times
Environmental, Social and Corporate Governance
EU’s New Climate Targets Are Already Set to Face a Backlash
John Ainger – Bloomberg
Tires were burning and statues were tumbling outside the European Parliament last week as thousands of angry farmers from across the EU protested against the swathe of climate legislation coming from Brussels, among other things. Today, the Commission will broadly outline how agriculture will have to step up to meet an emissions-cutting goal of 90% by 2040. The new targets will touch on every corner of the economy and entail significant political risk ahead of elections in June, when rightwing parties are already expected to make significant gains against a backdrop of concerns over the cost of the transition. The question is whether the EU can fight that narrative to convince citizens that a rapid green transition is the most cost-effective option and a global economic advantage.
EU agrees its first ever rules for ESG raters in sector shake-up
Huw Jones – Reuters
EU states and the European Parliament reached a deal late on Monday on the bloc’s first ever set of rules to regulate ESG ratings of company sustainability credentials, which guide trillions of investment dollars globally. The bloc is introducing more rigour into environmental, social and governance (ESG) investing as regulators suspect ‘greenwashing’, or companies over-inflating their sustainability profile.
Caribbean sea sponges indicate faster than expected global warming, study says; Ocean temperature research sparks debate about baseline measure for climate change
Michael Peel – Financial Times
Changes in the chemistry of Caribbean sea sponges suggest a breach of the 1.5C rise in the long-term global average temperature has occurred sooner than expected, according to new research that has sparked fierce debate. The potentially critical threshold could be reached by the late 2020s, according to the projections based on 300 years of ocean records and published in Nature Climate Change on Monday.
Natural Gas Prices Are Off 40%. Some of the Problems Won’t Go Away.
Avi Salzman – The Wall Street Journal
Natural gas prices have fallen 40% in the past three months, putting them on the verge of dropping below a key price threshold for the first time since April. Natural gas futures have been trading just above $2 per million British Thermal Units for the past few days, threatening to break that level. The price drop is one of the rare cases in finance when people can actually blame it on the weather. Natural gas is primarily used for electricity-generation and heating.
Is The Current Hurricane Warning System Outdated? A new study highlights the rising risks of storms that exceed a currently nonexistent ‘Category 6’ tropical storm rating in a warming world.
Bob Berwyn – Inside Climate News
As Typhoon Haiyan howled into the Philippines in November 2013, people knew that a powerful storm was coming, but they were not expecting a typhoon with 196 mile per hour winds, driving a storm surge up to 23 feet high. Haiyan killed more than 6,300 people, destroyed or damaged more than 1 million structures and pushed millions of people into poverty. In the wreckage, aid workers found that some people had died inside shelters built to withstand the impacts of Category 5 storms-also known as “super typhoons”-which is currently the highest rating on the danger scale.
The Trick That Makes Climate Investing in Poor Countries Less Risky; Clean energy companies in the developing world struggle to borrow money at favorable terms. The Green Guarantee Company aims to change that.
Zahra Hirji and Akshat Rathi – Bloomberg
BP targets boost for returns as it delivers second biggest profit in a decade; UK oil major’s shares climb 6% as new boss expands share buybacks and pledges to ‘simplify’ business
Tom Wilson – Financial Times
A Year Before Biden’s First Term Ends, Environmental Regulators Rush to Aid Disinvested Communities; The EPA wants to get the funds to environmental justice communities before the election in keeping with President Biden’s promise to address historic injustices.
Aman Azhar – Inside Climate News
Starmer ‘unwavering’ over Labour green pledge despite claims party dropping it; Labour leader says £28bn green investment ‘desperately needed’ after sources said last week Labour were planning to ditch policy
Ben Quinn – The Guardian
UN climate chief steps up pressure on countries ahead of COP29 summit in Baku
Simon Stiell says finance is ‘make or break’ factor in fighting global warming
Attracta Mooney – Financial Times
Olaf Scholz’s energy policies branded ‘toxic’ by German business chief; Siegfried Russwurm says government’s climate agenda is ‘more dogmatic than any other country I know’
Guy Chazan – Financial Times
America Wanted a Homegrown Solar Industry. China Is Building a Lot of It; China’s biggest solar companies are expanding in the U.S., where they will reap generous government aid
Phred Dvorak – The Wall Street Journal
UK 30-Year Green Bond Sale Sees Biggest Demand in Four Years; DMO green bond sale oversubscribed 3.05 times, four-year high; UK 30-year yields hover close to a two-month high at 4.61%
James Hirai – Bloomberg
Mexico Goodyear workers win $4.2 million back pay in US labor rights challenge
Blackwells recommends its Disney board nominees, suggests potential company split
Svea Herbst-Bayliss – Reuters
UBS deepens cost cuts as it integrates Credit Suisse; Swiss bank says it plans to buy back up to $1bn in shares this year
Owen Walker – Financial Times
UBS has set out plans for deeper cost cuts as the mammoth integration of rival Credit Suisse helped drive the Swiss bank to a second straight quarterly loss. Chief executive Sergio Ermotti, parachuted back into the top job to oversee the takeover, had previously described 2024 as a “pivotal year” for the integration, and on Tuesday said UBS would be aiming for $13bn of cost cuts by 2026, up from $10bn.
Blackstone Opens Private Credit Fund to French Retail Investors; BNP Paribas to partner with Blackstone for evergreen fund; Asset manager aims to expand offer to other European countries
Alexandre Rajbhandari – Bloomberg
Blackstone Inc. is opening its retail private credit fund ECRED to wealthy investors in France as part of a move to lure rich Europeans who’ve been previously shut out of a complex and an often illiquid market. The evergreen fund at the world’s largest alternative-asset manager will be accessible to French retail investors via life insurance policies, with a EUR10,000 ($10,750) entry ticket, Anthony Guerra, a principal for Blackstone’s Private Wealth Solutions, said at a press conference in Paris Tuesday.
Work & Management
Sweden Has a Caffeinated Secret to Happiness at Work; Workers and bosses alike are trying to figure out ways to reinvigorate work life. Could a cherished Swedish coffee ritual be the answer?
Anne Marie Chaker – The Wall Street Journal
Would work be better if we all took a collective coffee break? Workers in Sweden certainly think so. There, work life has long revolved around fika, a once- or twice-a-day ritual in which colleagues put away phones, laptops and any shoptalk to commune over coffee, pastries or other snacks. Swedish employees and their managers say the cultural tradition helps drive employee well-being, productivity and innovation by clearing the mind and fostering togetherness.
Tech Firms in Japan Are Scouring for Talent Amid Labor Shortage; 75% of tech employers faced competitive recruiting in 2023; Foreign workers and wage boosts are key solutions to shortage
Mia Glass – Bloomberg
Japan is facing a stark shortage of skilled human resources in the technology sector, even as it seeks to digitalize its economy and kickstart its lagging semiconductor industry. Three quarters of technology hiring managers in Japan found recruitment to be “very” or “quite” competitive last year, with a shortage of skilled candidates being the top reason, according to new research by recruiting firm Morgan McKinley. The trend is prevalent across industries as well, the report found, with 90% of the organizations surveyed also facing competitive hiring.
A Practical Guide to Quitting Your Smartphone; Readers who have taken the plunge said it had improved their lives, marriages and mental health, and offered advice to those going without their smartphones for “Flip Phone February.”
Kashmir Hill – The New York Times
Last May, Fabuwood, a kitchen cabinet manufacturer in Newark, instituted a new company policy: No phones allowed during meetings. To enforce it, the company installed “device shelves” outside each of its six glass-walled conference rooms. On a recent Wednesday morning, there were animated meetings in three of the conference rooms, and the shelves outside were full of smartphones, tablets and ’90s-style flip phones. The 1,200-person company pays the cost of a flip phone for employees who give up their smartphone, and 80 people have acted on the offer.https://jlne.ws/3HPnVxt
Heavy marijuana use may fuel anxiety disorders, new research finds. This age group is most at risk
Erin Prater – Fortune
Nearly a third of people who visited the emergency room for a cannabis-related concern developed a new anxiety disorder within three years, according to research released Monday. The study-published today in The Lancet’s open access journal eClinical Medicine-is said to be the most comprehensive examination of the relationship between cannabis use and anxiety to date.
China on cusp of next-generation chip production despite US curbs; SMIC and Huawei plan to make new 5nm processor, supporting Beijing’s goal for advanced semiconductors
Qianer Liu – Financial Times
China’s national chip champions expect to make next-generation smartphone processors as early as this year, despite US efforts to restrict their development of advanced technologies. The country’s biggest chipmaker SMIC has put together new semiconductor production lines in Shanghai, according to two people familiar with the move, to mass produce the chips designed by technology giant Huawei.
China Hands a Suspended Death Sentence to a Former Bank CEO; Tian Huiyu, former president and CEO of China Merchants Bank, was charged with bribery, among other crimes
Cao Li and Rebecca Feng – The Wall Street Journal
The former president of one of China’s biggest privately run banks has been sentenced to death by a Chinese court. The sentence has been suspended for two years. Tian Huiyu, 58, was for nine years the head of China Merchants Bank, and had previously worked at some of the country’s largest financial institutions.
Canary Wharf office takes 60% hit in distressed sale; Building bought by Chinese investor in 2017 fell into receivership last year
Joshua Oliver – Financial Times
A Canary Wharf office building that fell into receivership last year is to be sold at a 60 per cent discount to its last sale price, in a sign of how sharply the value of some London offices has fallen. 5 Churchill Place, a former Bear Stearns office owned by Chinese investor Cheung Kei Group, was put up for sale last year after being placed into receivership by a syndicate of lenders.
Nubank sets sights on becoming Latin America’s biggest financial group; Brazilian fintech is predicted to make $1bn in annual profits as it plans to expand in Mexico and beyond
Michael Pooler and Christine Murray – Financial Times
Nubank has laid out ambitions to be Latin America’s biggest financial services group as the $44bn-valued digital lender is predicted to hit the milestone of $1bn in annual profits. Chief executive David Velez told the Financial Times the company he launched in Brazil around a decade ago could become the region’s largest in the sector by customer numbers, with expansion under way in Mexico and Colombia.
A Big Win for Markets in Mexico; The country’s high court rules that AMLO’s electricity law is illegal.
The Editorial Board – The Wall Street Journal
Americans haven’t paid much attention, but President Andres Manuel Lopez Obrador (aka AMLO) has tried during his five-year rule to reverse Mexico’s landmark economic reforms of the previous 30 years. He suffered his biggest setback this week when Mexico’s Supreme Court struck down much of his electricity legislation for violating the constitution.