Wall Street’s sector shakeup will let more tech stocks shine

Aug 23, 2018

Wall Street’s sector shakeup will let more tech stocks shine

Aug 23, 2018

First Read

Hits & Takes
By JLN Staff

Register now for Eurex’s Derivatives Forum in Stockholm, which they are co-hosting with Danske Bank and SEB! This year’s conference will focus on key issues that will shape the derivatives industry of the future. Find the complete agenda here.~JJL

Register today for the Montreal Exchange’s next webinar and find out how to use TD’s Advanced Dashboard and its options trading tools. For more details and registration click here.~JJL

FIA’s Walt Lukken was a guest on the Feehery Theory Podcast talking about “10 years, The great disruption, Sports as metaphor.”~JJL

Michael Shore, a longtime industry communications professional, is now director of media, PR and communications with William Blair.~SD

Got milk? Yesterday, the European Energy Exchange (EEX) recorded the first trade in its new liquid milk futures.~JK

Check out this growth stat from the Reuters story Copper and the (very) big fund short – “CME’s copper options … turnover totalled 35,140 contracts last month, more than was traded in the whole of 2015.”~SD

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MWE World of Opportunity – Listen Both Ways Before Crossing!

JohnLothianNews.com
“I had this happen to me. I came in in the morning. A wonderful colleague, a great person, says, ‘Billy, how are you doing?’ ‘I’m doing great.’ ‘Really? Tell your face.'”

What is the authentic you? How do you act under pressure? Is that reflective of your authentic self? In this video, Bill Weldon, who’s in the business of executive coaching after years in trading, talks about how to deal with stressful situations.

Watch the video here »

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IFM

Invitation to the event Future of the Financial Center Germany in Europe; Dear journalists,
Deutsche Boerse AG
We cordially invite you to an event hosted by Deutsche Boerse AG with Chancellor Dr. Ing. Angela Merkel, the Prime Minister of the State of Hesse, Volker Bouffier and the CEO of Deutsche Boerse AG, Dr. med. Theodor Weimer, a. Theme of the evening is the future of the financial center Germany in Europe.
/jlne.ws/2LfK8VP

***** Alas, I must send my regrets.~JJL

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Welcome to the longest bull market in Wall Street history
Sue Chang – MarketWatch
The bull market in U.S. stocks on Wednesday became the longest in history, with even President Donald Trump chiming in as optimistic investors argue that the journey is far from over.
The bull has thrived amid a decade of financial and political upheaval, thanks in part to the all-you-can-eat liquidity feast hosted by the Federal Reserve and other major central banks. Now the Fed has shifted to a tighter monetary-policy regime even as the same risks that have dogged this market over the years, including elevated valuations, persist, prompting some pundits to predict an imminent demise of the bull.
/goo.gl/TPk6gy

***** That is a lot of bull.~JJL

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Big oil asks government to protect it from climate change
Will Weissert – AP News
As the nation plans new defenses against the more powerful storms and higher tides expected from climate change, one project stands out: an ambitious proposal to build a nearly 60-mile “spine” of concrete seawalls, earthen barriers, floating gates and steel levees on the Texas Gulf Coast. Like other oceanfront projects, this one would protect homes, delicate ecosystems and vital infrastructure, but it also has another priority — to shield some of the crown jewels of the petroleum industry, which is blamed for contributing to global warming and now wants the federal government to build safeguards against the consequences of it.
bit.ly/2MNwJsE

******What universe is this we are living in now?~JJL

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IBM looks for caffeine buzz with coffee delivery drones; Patent filing even shows sensors predicting espresso needs of flagging employees
Camilla Hodgson in London – FT
IBM has spent much of the last decade turning away from its hardware roots towards new, fast-growing technologies like artificial intelligence and cloud computing. A new patent filing suggests the 107-year-old computing stalwart is looking to adapt another tech trend for fun and profit: smart coffee delivery drones.
/jlne.ws/2LjxG7y

****** Nasdaq’s Allan Schoenberg is going to need to get that no-fly zone over Times Square lifted.~JJL

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Wednesday’s Top Three
Wednesday’s top stories were led by the Wall Street Journal’s piece on OCC, in A Messy Battle Brews in the Options Market. A distant second went to the FT’s FCA brings charges over alleged futures-trading scheme. Third was the CFTC announcement CFTC Unanimously Adopts Rule Amendments Simplifying Chief Compliance Officer Duties and Annual Report Rules for FCMs, Swap Dealers and Major Swap Participants. If only CFTC could add a little more wording to its headlines.

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

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Lead Stories

Wall Street’s sector shakeup will let more tech stocks shine
Noel Randewich – Reuters
Chipmakers, cloud-computing sellers and even credit card payment companies will have a greater chance to stand out in the information technology sector next month following the largest-ever shakeup of Wall Street’s industry classification system.
/jlne.ws/2LkmJCH

European Payment System Isn’t a Pipe Dream; A German proposal for thwarting U.S. sanctions on Iran could work. Just look at Russia’s banks.
Leonid Bershidsky – Bloomberg
As President Donald Trump increasingly strains ties with U.S. allies, German leaders, including Chancellor Angela Merkel, have suggested that their country and other European nations should take steps to lessen their dependence on America. Now, Foreign Minister Heiko Maas has called for the creation of “U.S.-independent payment channels” to help shield European companies from unilateral U.S. sanctions such as the ones Trump has imposed on Iran.
/jlne.ws/2Lkjxab

CME to launch Libor-substitute contract linked to BoE rate meetings
Huw Jones – Reuters
CME Group has said it will launch a ground-breaking futures contract linked to Bank of England interest rate meetings as part of global efforts to scrap use of the Libor benchmark that banks sought to manipulate.
/jlne.ws/2LncoG2

Exclusive: Aramco IPO halted, oil giant disbands advisers – sources
Clara Denina, Alex Lawler, Marwa Rashad – Reuters
Saudi Arabia has called off plans for the domestic and international listing of state oil giant Aramco, billed as the biggest stock flotation in history, four senior industry sources said on Wednesday.
/jlne.ws/2LjWpbQ

What soyabeans teach us about tariffs; ‘The soya saga is just a taste of what could happen if trade wars disrupt other supply chains’
Gillian Tett – FT
Alan Blinder, esteemed Princeton economics professor and former vice-chairman of the US Federal Reserve, recently found himself owning up to a surprising new interest: the soyabean.
/jlne.ws/2LneK7Q

SEC to Rehear Dozens of Cases That Went Before In-House Judges; Decision follows Supreme Court ruling that faulted how administrative judges were appointed
Gabriel T. Rubin – WSJ
The Securities and Exchange Commission said it plans to rehear dozens of cases that were pending before its in-house administrative-law judges, following a June Supreme Court ruling that faulted the appointment process for those judges.
/jlne.ws/2Llj9YX

Short Squeeze Roils Wall Street’s Favorite Bond Trade; This month’s decline in 10-year yields stems from a host of factors, investors and portfolio managers say
By Daniel Kruger – WSJ
A robust August rally in the Treasury market is foiling one of Wall Street’s most popular trades, a bet that solid U.S. economic growth, rising inflation and eroding government finances will compel investors around the world to sell bonds.
/jlne.ws/2LfHPSF

World’s Top Crypto Miner May Be Losing Its Edge, Bernstein Says
Blake Schmidt – Bloomberg
Bitmain is facing growing competition as it plans for an IPO; Analyst says TSMC should require full prepayment from Bitmain
Bitmain Technologies Ltd., the designer of cryptocurrency mining chips that’s planning a landmark initial public offering, may be losing its technological edge, according to Sanford C. Bernstein & Co.
/jlne.ws/2LlkBub

UK Warns No-Deal Brexit to Raise Prices and Burden Pensioners
Robert Hutton – Bloomberg
British retirees in EU may lose access to U.K. bank accounts; Consumers will see the cost of using their credit cards go up
Britons face higher prices when buying from the European Union unless the government can secure a Brexit deal, while retirees in countries like Spain risk losing access to pensions paid into U.K. banks.
/jlne.ws/2LmAYqr

SEC rejects nine proposals for bitcoin ETFs
Reuters Staff
The U.S. Securities and Exchange Commission (SEC) on Wednesday rejected applications for nine bitcoin-based exchange-traded funds (ETF) from three separate companies.
/jlne.ws/2LkkUWn

Elon Musk and Tesla Might Not Have to Worry About the SEC; The hesitant, understaffed regulator may have a hard time applying its outdated rules to the founder’s tweets.
Robert Schmidt, Benjamin Bain – Bloomberg
Elon Musk’s tweet about taking Tesla Inc. private has brought intense scrutiny, mostly of Musk, but also of U.S. securities regulators. The Securities and Exchange Commission would seem to have a strong case that Musk was at the very least being misleading when he tweeted on Aug. 7 that he’d “secured” financing for a privatization deal. He appeared to indicate he hadn’t closed a deal in a subsequent blog post. That could be a violation of securities laws. Yet the probe is fraught with minefields.
/jlne.ws/2LjvXPC

Exchanges, OTC and Clearing

EEX targets local Asia, US commodity markets
Louisa Chender – Global Investor Group
EEX Group CEO says obtaining a clearing licence in Singapore was a big hurdle to overcome
bit.ly/2nZzUPZ

SGX FX Futures volume rises above US$93 billion in July amid surge in USD/CNH trading; year-on-year growth climbs to 173%
SGX
Rising concerns that protracted trade tensions between China and the US may evolve into a full-fledged currency war kept the market on tenterhooks in July. While emerging markets are typically more volatile, the threat of a spillover of trade issues has the potential to upset most economies. The growing trade war rhetoric has only served to accentuate how convergence of geopolitical concerns and country-specific issues can damage fragile recoveries in the global economy.
/goo.gl/5QqdHF

AITE Group report (part II): how margin cost drives the choice of exchange
Eurex
For us at Eurex, MSCI is a major strategic focus point. That is why we constantly explore market developments and continuously expand our MSCI offering. To research MSCI exchange-traded derivatives (ETDs) in today’s market structure, we teamed up with AITE Group. In the second part of the three-piece study, the importance of margin cost in choosing an exchange is outlined.
/jlne.ws/2Ln8ehz

Fintech

Cinnober: Q2 2018 Presentation
Cinnober
Regarding our balance sheet and our commitment to self-fund our ongoing business operations and growth initiatives:
On 30 June 2018, Cinnober had SEK 99.0 million in cash on its balance sheet, compared to SEK 86.8 million on 31 March 2018.Despite the ongoing funding of operating losses and our investment in KRM22, cash increased quarter-on-quarter as a result of the 60% sale of our Irisium market surveillance subsidiary, and more effective management of working capital.
While we expect our cash balance to decline throughout the remainder of the year, we believe that continued active management of working capital will ensure sufficient funding.
In addition, we expect our operating losses to significantly decline as we progress throughout the remainder of the year. I want to be very clear on this point: we have no plans, nor do we anticipate, asking shareholders for equity capital.
bit.ly/2Ms3wnT

Vela Partners With CoinMarketCap To Include Cryptocurrencies In SuperFeed
Vela
Vela, a leading independent provider of trading and market access technology for global multi-asset electronic trading, today announced a partnership with CoinMarketCap, the world’s most trusted and accurate source of data for cryptocurrencies. This exclusive agreement marks a new addition to the asset class coverage for Vela’s Market Data Feed service, SuperFeed.
/jlne.ws/2LhbxXs

Thomson Reuters to provide MiFID II reference data to Trax
Finextra
Thomson Reuters has entered into an agreement with Trax to provide its trusted reference and market data to support Trax’s MiFID II regulatory reporting and Systematic Internaliser (SI) determination services.
/goo.gl/HinP6A

Temenos partners with U.S. headquartered UMB Fund Services to drive exchange traded fund growth
Finextra
Temenos, the banking software company, today announced that Milwaukee, Wisconsin-based UMB Fund Services (UMB) signed an agreement to modernize its Exchange Traded Funds (ETF) administration capabilities using Temenos’ Multifonds platform.
/goo.gl/hFsbsE

TD Ameritrade Launches AI-Powered Chat Bot Experience for WeChat in Hong Kong
TD Ameritrade
Individual investors in Hong Kong can access market updates and investor education in English and simplified Chinese using WeChat HONG KONG – TD Ameritrade Holding Corporation (Nasdaq: AMTD) is bringing financial market updates, investor education and research to retail investors in Hong Kong through WeChat, which recently hit 1 billion daily active users.1
/goo.gl/Fy2LDQ

Cryptocurrencies

China Seeks to Block Access to 124 Foreign Crypto Exchanges
Wolfie Zhao – Coindesk
Chinese regulators are moving to block more than 100 overseas crypto exchanges offering trading services to domestic investors.
Shanghai Securities Times, a mouthpiece of the Chinese financial authorities, reported on Thursday that the China National Fintech Risk Rectification Office has so far identified 124 trading platforms with overseas IP addresses but that are still available in the country.
bit.ly/2MJ6TpL

Bitcoin spiked after a major trading platform went down, and it created a golden opportunity for traders
Sam Jacobs and Frank Chaparro – Business Insider
Bitcoin’s value surged Tuesday evening, rocketing from around $6,450 to nearly $6,900 almost instantly. The move coincided with scheduled maintenance on BitMEX, a derivatives trading platform for bitcoin and other cryptos. And insiders say the move precipitated some wild trading.
/goo.gl/ng55XD

The World Bank Is About to Settle a Blockchain Bond Worth $73 Million
Wolfie Zhao – Coindesk
The World Bank is expected to settle its first blockchain-based bond worth $73 million this month. Australia’s Commonwealth Bank (CommBank), which was selected as the sole arranger of the issuance by the World Bank early in August, said the bond is to be transacted on Aug. 28, as reported by Reuters on Thursday.
/goo.gl/Qspvi6

Japan Has No Plans to Curb Crypto, Seeks Further Growth
Prateek Dimri – NewsBTC
Japan’s positive stance on cryptocurrencies just got reaffirmed. “We have no intention to curb (the crypto industry) excessively,” said Toshihide Endo, the commissioner of Financial Services Agency (FSA), Japan’s top financial regulator.
bit.ly/2MJCpnH

Kaspersky Lab: North Korea Hacks Cryptocurrency Exchange With ‘First’ macOS Malware
William Suberg – Cointelegraph
North Korean hackers have infected a cryptocurrency exchange with malware for both Windows and macOS for reportedly the first time, Russian internet security company Kaspersky Lab announced Thursday, August 23.
/goo.gl/q61nM7

Liechtenstein Bank Issues Own Crypto Stable Coin, Aims to Become ‘Blockchain Investment Bank’
William Suberg – Cointelegraph
Liechtenstein bank Union Bank AG announced it was issuing its own security tokens and in-house cryptocurrency backed by fiat in a press release Friday, August 17.
/goo.gl/Z1y7en

Politics

Trump Predicts Stock Market Crash If He’s Impeached
Terrence Dopp and Justin Sink – Bloomberg
President Donald Trump said he doesn’t see a reason for Congress to impeach him but that the stock market would plummet and Americans would be poorer if lawmakers did so.
/jlne.ws/2LlIZfw

Massachusetts securities regulator faces primary challenge, focus on election handling
Tim McLaughlin, Nate Raymond – Reuters
Massachusetts Secretary of State William Galvin, one of the most aggressive U.S. securities law enforcers, next month will face his first primary challenge in over a decade from a rival who claims Galvin has neglected his role as the state’s top election overseer.
/jlne.ws/2LlmbMD

Business groups urge Trump, Erdogan to meet as dispute hits investments
Lesley Wroughton – Reuters
U.S.-Turkey business groups on Tuesday warned that a political dispute between the NATO allies was affecting investor confidence and had forced some firms to suspend investment plans.
/jlne.ws/2LoZyHc

Why Do Republicans Want To Gut Bank Regulations Even More?
Mayra Rodriguez Valladares – Forbes
Not satisfied with the regulatory relief that legislators bestowed upon banks under the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) signed earlier this year, seven Republican senators want to gut bank regulations even more.
/jlne.ws/2LoZXcG

Political tension frays key US and Turkey cotton trade; Collapse of lira this year has raised cost of imports as they are priced in dollars
Gregory Meyer in New York – FT
The sharp decline in Turkey’s lira and worsening tensions between President Recep Tayyip Erdogan and his US counterpart Donald Trump are fraying one of the most important trade relationships between the two countries — cotton sales.
/jlne.ws/2LlO2wi

Regulation

ESMA defines disclosure standards under Securitisation Regulation
ESMA
The European Securities and Markets Authority (ESMA) has issued today a set of draft regulatory and implementing standards (RTS/ITS) under the Securitisation Regulation, which concern the details of a securitisation to be made available by the originator, sponsor and SSPE, as well as the format and templates for doing so.
/jlne.ws/2LjEVw5

Exchanges hope to escalate high-frequency trading case to Supreme Court
Declan Harty – S&P Global
The largest U.S. exchange operators have petitioned the U.S. Supreme Court to take up a case questioning whether exchanges favor Wall Street’s fastest traders.
Brought in the wake of Michael Lewis’ 2014 book Flash Boys, the case hinges on whether exchanges sell and offer products and services that illegally favor high-frequency traders over slower institutional investors such as pension and retirement funds. Plaintiffs in the case include the city of Providence, R.I., and a group of pension and retirement funds.
/goo.gl/Y38wEQ

ISDA 2018 U.S. Resolution Stay Protocol
ISDA
The ISDA 2018 U.S. Resolution Stay Protocol (US Stay Protocol) was created to allow market participants to comply with regulations issued by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The US Stay Regulations impose requirements on the terms of swaps, repos and other qualified financial contracts (QFCs) of global systemically important banking organizations (G-SIBs).
/goo.gl/yEqFbo

New Disclosure Requirements for NFA Members Engaging in Virtual Currency Activities—Action Required
Ropes & Gray LLP via JD Supra
On August 9, 2018, the National Futures Association (“NFA”) announced that, effective October 31, 2018, NFA members are required to make additional disclosures in connection with their virtual currency activities in accordance with recently adopted Interpretive Notice 9073 (the “Interpretive Notice”).1 The Interpretive Notice applies not only to asset managers that use virtual currency derivatives, but also to asset managers that use spot market virtual currencies. The disclosure requirements apply to promotional materials, disclosure documents and other offering documents.
/jlne.ws/2LgOsnK

Former banker pleads guilty in U.S. to role in laundering embezzled PDVSA funds
Reuters Staff
A former executive with Swiss bank Julius Baer pleaded guilty on Wednesday for his role in a billion-dollar scheme to launder money embezzled from the Venezuelan state-owned oil company PDVSA, the U.S. Justice Department said.
/jlne.ws/2LjUHr1

U.S. banking regulators ease liquidity rules for municipal securities
Pete Schroeder – Reuters
U.S. banking regulators said on Wednesday they were easing liquidity rules on the treatment of municipal securities, allowing banks to count more of the assets toward certain liquidity requirements.
/jlne.ws/2LlJW7A

Statement of CFTC Chairman J. Christopher Giancarlo on CFTC approval of NASDAQ Oslo ASA and Osaka Exchange as FBOTs
CFTC
I am pleased that we have moved forward with the Foreign Board of Trade (FBOT) applications of the NASDAQ Oslo ASA and Osaka Exchange. Granting FBOT applications demonstrates our commitment to deferring to the regulation and supervision of comparable governmental authorities.
/jlne.ws/2LgSkFi

CFTC Issues Orders of Registration to Osaka Exchange and Nasdaq Oslo ASA to Permit Trading by Direct Access from the U.S.
CFTC
The Commodity Futures Trading Commission (CFTC) announced today it has issued Orders of Registration to Osaka Exchange, Inc. (OSE), a Foreign Board of Trade (FBOT) located in Japan, and Nasdaq Oslo ASA (Nasdaq Oslo) an FBOT located in Norway. Under the Orders, OSE and Nasdaq Oslo are permitted to provide their identified members or other participants located in the U.S. with direct access to their electronic order entry and trade matching systems.
/jlne.ws/2LlNzKK

Investing and Trading

U.S. economy expected to slow, damaged by trade war: Reuters poll
Hari Kishan, Manjul Paul – Reuters
U.S. economic growth will slow steadily in coming quarters after touching a four-year high in April-June, according to a Reuters poll of economists, who expect President Donald Trump’s trade war to inflict damage.
/jlne.ws/2Li8ZrT

Fed officials suggest rates likely to rise soon, worry about trade war
Jason Lange – Reuters
Federal Reserve officials discussed raising interest rates soon to counter excessive economic strength but also examined how global trade disputes could batter businesses and households, minutes of the U.S. central bank’s last policy meeting showed.
/jlne.ws/2Ln3OY1

Institutions

Merrill Lynch Joins Brigade Downplaying Money-Market Mutual Funds; Clients’ uninvested cash now will be automatically routed to bank deposits
Jason Zweig – WSJ
Starting Sept. 4, Bank of America Corp.’s Merrill Lynch brokerage unit will no longer sweep its customers’ cash into money-market mutual funds, moving it instead into deposits at affiliated banks.
/goo.gl/PsCjqJ

Credit Suisse freezes $5 billion of Russian money due to U.S. sanctions
Brenna Hughes Neghaiwi, John O’Donnell – Reuters
One of Switzerland’s largest banks, Credit Suisse, has frozen roughly 5 billion Swiss francs ($5 billion) of money linked to Russia to avoid falling foul of U.S. sanctions, according to its accounts, further increasing pressure on Moscow.
/jlne.ws/2LjSnAe

Credit Suisse fires 2 employees after sexual assault investigation; Senior banker and manager based in London have had their contracts terminated
Stephen Morris in London – FT
Credit Suisse has fired two male employees in London after uncovering new evidence during an investigation into a historic sexual assault.
/jlne.ws/2LnnomN

Two Sigma Launches China-Focused Fund; It is the latest quant firm to launch a hedge fund targeting the country.
Stephen Taub – Institutional Investor
Another quant giant has launched a hedge fund that invests in China.Two Sigma, the world’s fourth-largest hedge fund firm, is currently raising money for Two Sigma China Core Equity Fund, L.P., according to a regulatory filing. The firm declined to comment.
/goo.gl/Ze2vBF

Goldman Sachs secures $1.5 billion sale, leaseback of London HQ
Reuters Staff
Goldman Sachs (GS.N) said on Wednesday it had sold its new, unfinished European headquarters in London to South Korea’s National Pension Service for 1.17 billion pounds ($1.49 billion) before moving staff to the site next year.
/jlne.ws/2LgRBny

Citigroup Has a Three-Year Plan to Reverse Its Falling Diversity
Jordyn Holman – Bloomberg
CEO Michael Corbat wants 8% of U.S. managers to be black; Bank’s diversity in U.S. workforce has dropped since 2009
After years of scant progress on diversity measures, Citigroup Inc. has created hard targets for raising the percentages of women and African Americans in management positions by 2021, according to an internal memo signed by Chief Executive Officer Michael Corbat and the Executive Management Team.
/jlne.ws/2Lkd3I4

Deutsche Bank London Threatens to End Business With Russia
Steven Arons and Olga Voitova – Bloomberg
Request for more information said to be part of broader push; Lender said to have sent letter to Russian government in June
Deutsche Bank AG threatened to end business with Russia’s government earlier this year in a letter sent to the state demanding that it provide more information related to know-your-customer records.
/jlne.ws/2LjWVXk

Stricken absolute return bond fund is a warning for investors; There is far from an obvious single culprit for GAM liquidating its $11bn vehicle
Robert Smith – FT
What do the following three bonds have in common? An unrated bond sold by a Chinese chipmaker’s British Virgin Islands subsidiary; a Turkish bank bond that now yields more than 14 per cent; and a bond that can convert into the shares of a company aiming to mine the Yorkshire moors for a niche industrial mineral.
/jlne.ws/2LlrhIT

JP Morgan to cut around 100 jobs in asset management; Approximately 100 jobs will be cut across the asset management business at JP Morgan as part of a routine review, according to the bank.
By Hayley McDowell – The Trade
JP Morgan is moving forward with plans to cut around 100 positions globally within its asset management division following a business review, The TRADE understands.
/jlne.ws/2Lk2GUM

Regions

Bundesbank’s Weidmann warns risks of trade war hit now higher
Claire Jones – FT
Germany’s top central banker has said the risks of a trade war denting global economic growth had risen, but said the European Central Bank still needed to press ahead with plans to ditch some of its crisis-era monetary support.
/jlne.ws/2Lp0Xxs

The Next Big Bet in Fracking: Water
Christopher M. Matthews – WSJ
Some investors see fortunes to be made in the U.S.’s hottest oil field – by speculating in water, not crude.
Fledgling companies, many backed by private equity, are rushing to help shale drillers deal with one of their trickiest problems: what to do with the vast volumes of wastewater that are a byproduct of fracking wells.
/on.wsj.com/2BBX20L

Europe’s new data law upends global online advertising
Kate Holton – Reuters
Europe’s new data privacy law has put a small army of tech firms that track people online in jeopardy and is strengthening the hand of giants such as Google and Facebook in the $200 billion global digital advertising industry.
/jlne.ws/2LjTYGe

German businesses under fire for low investment; Rising corporate savings blamed for huge external surplus
Guy Chazan in Berlin – FT
Germany’s massive current account surplus is usually blamed on a penny-pinching government obsessed with balanced budgets and frugal households hoarding cash. Yet the main culprit is German business.
/jlne.ws/2LoWESO

Puerto Rico Bonds: A Surging Force
Kevin Horan – S&P Dow Jones Indices
After wreaking havoc on the municipal bond markets, Puerto Rico bonds have recently been adding value through their recovery. Bonds rallied after the latest debt restructuring deal was struck between the commonwealth and the bond holders. Additional supporting news, as mentioned in an article from Reuters,[1] was a federal court ruling affirming the budgetary powers and enforcement of fiscal discipline by the federal oversight board that was created by the 2016 federal PROMESA Act.
/goo.gl/gojKCE

Vietnam’s coffee growers face profit squeeze from bumper crop; Farmers fear record output and competition from other countries will depress prices
John Reed in Buon Ma Thuot – FT
Vietnam’s robusta coffee growers are anticipating a bumper crop this reason — good news for fans of an instant cup but bad for the profit margins of hard-pressed farmers in the world’s largest exporter of the commodity.
/jlne.ws/2LndotM

Goldman Sachs closes two lacklustre Asia-Pacific hedge funds; Tokyo, Hong Kong managers to depart company as regional market struggles
Emma Dunkley in Hong Kong- FT
Goldman Sachs is closing two Asia-Pacific focused hedge funds with $1.4bn in assets combined following lacklustre performances, in the latest sign of the sector’s recent challenges across the region.
/jlne.ws/2LlP4IG

Brexit

Red tape, border delays if no Brexit deal, Britain warns firms
Kylie MacLellan – Reuters
British companies trading with the European Union will face a tangle of red tape and possible delays at the border if the government fails to negotiate an exit deal before Britain leaves the bloc, official papers showed on Thursday.
/jlne.ws/2LlJMwO

Fog in the Channel? How have equity markets reacted to Brexit news?
Srdan Tatomir, Iryna Kaminska, Marek Raczko and Gregory Thwaites – Bank Underground
How have equity markets responded to news about Brexit? To answer this we split firms into those whose share prices are particularly sensitive to Brexit-related news, and those which are not. The latter group provides a “control sample”, against which to assess the impact of individual pieces of news on the former. The ratio of the two groups’ prices gives a barometer of equity market sentiments around Brexit. So far, this measure points to downward pressure on valuation of companies more exposed to Brexit. The bulk of the fall occurred on the night of the referendum, with little movement afterwards, suggesting little additional “news” from subsequent developments beyond the immediate aftermath.
/goo.gl/JMK4hk

Britons living in EU could lose access to UK bank accounts in no-deal Brexit
Huw Jones, Andrew MacAskill – Reuters
Britons living in the European Union could lose access to their UK bank accounts and businesses on the continent could be cut off from investment banks in London if there is a no-deal Brexit, the British government said on Thursday.
/jlne.ws/2LoW33w

The Rich Still Want to Move to London Despite Visa Review
Neil Callanan – Bloomberg
More than 90 immigrants to the U.K. were granted investor visas in the second quarter as Britain continues to draw wealthy people. Prime Minister Theresa May said earlier this year that the government was reviewing the so-called Tier 1 investor program after Labour Party lawmaker Yvette Cooper questioned the origin of money from 700 Russians who have been granted the visas. The number of applicants fell sharply in 2015 after the government doubled the minimum investment for the permit to 2 million pounds ($2.6 million) and new anti-money laundering due diligence checks were introduced.
/jlne.ws/2Lk9X6U

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John Lothian Newsletter

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Past JLN Newsletters

Market Narratives Have Pushed Aside Fundamentals

Market Narratives Have Pushed Aside Fundamentals

First Read $46,041/$300,000 (15.3%) ++++ Hits & Takes John Lothian & JLN Staff We have a new and improved version of The Spread today. We have overhauled our approach to this video series and have the whole JLN team contributing to it. Suzanne Cosgrove has...

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