Ricardo Manrique and Philip Slocum
Elevated Risk Levels, Volatility Seen Continuing as 2021 Debuts
Suzanne Cosgrove and Matt Raebel – John Lothian News
The pandemic of 2020 and its associated economic fallout pushed the Cboe Volatility (VIX) Index to record highs, and it’s expected to stay elevated even as COVID-19 vaccines are rolled out and dispensed and global economies begin to recover in 2021, two analysts said in a presentation sponsored by the Cboe Options Institute.
“In 2020, the S&P 500 experienced its second highest annualized realized volatility and intra-year high to low price range of the past 80 years, only behind the Great Financial Crisis in 2008,” said Stacey Gilbert, derivatives portfolio manager at Glenmede Investment Management LP. She said that coming off a year of volatility and options trading volume as high as 2020’s would make it unlikely for things to return to “normal” anytime soon. Historically, she said, “it takes about 8½ months for volatility to return to normal.”
To read the rest of this story, go here.
Hits & Takes
John Lothian & JLN Staff
Yahoo news is reporting that there were several large bitcoin payments to right-wing political activists a month before the Capitol riot, but after President Trump invited supporters to “walk down Pennsylvania Avenue” and “take back our country.” The firm Chainanalysis is tracking the path of the money to try to determine its original source, which could be a foreign actor.
And FINCEN has extended the comment period for the rule “Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions. Given the above news, that sounds like a smart move.
The Cboe has joined the ranks of exchanges who are halting donations from their Political Action Committees. I should have mentioned Cboe too when I first asked where firms stood. Thank you to Cboe for doing the right thing.
Michael Bloomberg in a Blomberg News editorial is calling for the Senate to vote on Trump’s removal and “be done with it.” There is no reason to dawdle.
It turns out that you should turn off your cell phone before engaging in the insurrection that happened at the Capitol on January 6. When you walk into the Capitol with your phone on, you are automatically tracked. That includes your Apple Watch too. I probably would need to leave my Tile device on my keys at home too.
Monday is Martin Luther King, Jr. Day in the U.S. and markets will be closed for observance of the holiday. JLN will be published Monday, but not JLN Options. I will be teaching a merit badge class for the PathWay to Adventure Council of the Boy Scouts of America. In my Communication merit badge class, 10 of the participants will be girls and 2 boys.
We had two new donations to the JLN MarketsWiki Education GoFundMe campaign, from Richardo Manrique of FTSE Russell and Phil Slocum, a retired Cboe executive. Phil Slocum was part of the class of Cboe executives who retired after long and meritorious service to the exchange company in 2017. He was the Cboe’s chief risk officer and former head of trading operations at the time of his retirement. Phil is now retired and enjoying life, while also making thoughtful donations. Ricardo is a former marine who has embarked on a financial services career that makes him Mr. Index, with stops at JP Morgan, Dow Jones, STOXX, MCSI, State Street and now FTSE Russell, where he is head of strategy. He is also Sean Smith’s boss, which is an enviable role. Thank you to Phil and to Ricardo and all who have given and all who have yet to give. Support our efforts to preserve industry history by donating to our GoFundMe campaign.
One way you can help, short of giving us cash, is by sharing our videos on your social media accounts and letting us know what you thought. Help spread the word about our history so more people understand our markets and how we got to where we are today. Thank you to all of you who already do share our videos and stories on your Linkedin, Facebook or Twitter accounts.
Note to Walt Lukken – the Purdue Boilermakers basketball team beat the Indiana Hoosiers for the 8th straight time, which is the longest winning streak in 100 years.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
NFA Bars Futures Broker Gary Fullett from Membership for Five Years; Surprising it Took This Long
John Lothian – John Lothian News
The National Futures Association has barred broker Gary Fullett from being an NFA member for five years and fined him $50,000 if he ever wants to come back, among other actions. This NFA Business Conduct Committee action is about twenty years too late. I am surprised he was not barred from NFA membership for life years ago. He has been flouting NFA regulations for years. I am surprised it took the NFA this long to bring charges and adjudicate a bar-worthy case.
Fullett was a broker I first met on the Internet back in the 1990s. He frequented a Usenet discussion group, misc.invest.futures, where Jon Matte and I were active participants. Usenet was an early part of the internet that was later rolled up by a firm named Deja.com for whom Richard Gorelick was the general counsel. Matte, a start-up Introducing Broker clearing Alaron at the time, had been one of the early professional participants of misc.invest.futures.
To read the rest of this commentary, go here.
Ray Carmichael – The History of Financial Futures Part I
Carmichael Led Communications at the Chicago Board of Trade During a Decade of Incredible Growth in Financial Futures
Ray Carmichael joined the Chicago Board of Trade in 1980, hired by then-CBOT president Thomas Donovan to lead communications for the exchange. Carmichael had come from the nonprofit world, so he understood how committees work in organizations.
Ray Carmichael – The History of Financial Futures – Part 2
Carmichael Led Communications at the Chicago Board of Trade During a Decade of Incredible Growth in Financial Futures.
Ray Carmichael was in the thick of the new markets, the early days of electronic trading and huge change in the futures industry globally as the head of corporate communications for the Chicago Board of Trade. He was there when financial futures grew dramatically at the CBOT, making it “the most exciting time in the world to be at the Board of Trade; it was the glory days.”
Cboe Global Markets Statement on Political Action Committee Donations
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a market operator and global trading solutions provider, today issued the following statement: The Cboe Global Markets Political Action Committee (PAC) is temporarily pausing all donations following the assault on the U.S. Capitol last week.
*****Thank you to Cboe for doing the right thing.~JJL
Exclusive: Large bitcoin payments to right-wing activists a month before Capitol riot linked to foreign account
Jenna McLaughlin – Yahoo News
On Dec. 8, someone made a simultaneous transfer of 28.15 bitcoins — worth more than $500,000 at the time — to 22 different virtual wallets, most of them belonging to prominent right-wing organizations and personalities. Now cryptocurrency researchers believe they have identified who made the transfer, and suspect it was intended to bolster those far-right causes. U.S. law enforcement is investigating whether the donations were linked to the Jan. 6 assault on the U.S. Capitol.
*****This is a story to follow and see where it leads. We might not like the answer.~JJL
Dozens of people on FBI terrorist watch list came to D.C. the day of Capitol riot
Devlin Barrett, Spencer S. Hsu and Marissa J. Lang – Washington Post
Dozens of people on a terrorist watch list were in Washington for pro-Trump events Jan. 6, a day that ended in a chaotic crime rampage when a violent mob stormed the U.S. Capitol, according to people familiar with evidence gathered in the FBI’s investigation.
*****How many of them were among those getting bitcoin payments?~JJL
FinCEN Extends Comment Period for Rule Aimed at Closing Anti-Money Laundering Regulatory Gaps for Certain Convertible Virtual Currency and Digital Asset Transactions
The Financial Crimes Enforcement Network (FinCEN) announced today it is reopening the comment period for its recent proposed rulemaking regarding certain transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA). Under the Notice of Proposed Rulemaking (NPRM), banks and money services businesses (MSBs) would be required to submit reports, keep records, and verify the identity of customers in relation to transactions above certain thresholds involving CVC/LTDA wallets not hosted by a financial institution (also known as “unhosted wallets”) or CVC/LTDA wallets hosted by a financial institution in certain jurisdictions identified by FinCEN.
*****Anonymous, maybe not.~JJL
U.S. says Capitol rioters meant to ‘capture and assassinate’ officials – filing
Brad Heath, Sarah N. Lynch – Reuters
Federal prosecutors offered an ominous new assessment of last week’s siege of the U.S. Capitol by President Donald Trump’s supporters on Thursday, saying in a court filing that rioters intended “to capture and assassinate elected officials.”
*****There were some people with more on their minds than taking selfies.~JJL
Arrested Capitol rioters had guns and bombs, everyday careers and Olympic medals
Brad Heath, Sarah N. Lynch – Reuters
United by political grievances, they came in costumes, snapping selfies, calling themselves patriots. Some came armed for battle and planning for “war.”
*****And some had more than cell phones.~JJL
The U.S. Mustn’t Follow Weimar Germany and Ancient Rome; In its moment of crisis, the American republic can find warnings but also inspiration in the past.
Andreas Kluth – Bloomberg
Since the ransacking of the U.S. Capitol on Jan. 6, America’s institutions, leaders and citizens have been groaning under one of the most severe tests in the history of the republic. Are there lessons to draw on from the past? History, according to a famous aphorism, may not repeat itself, but it rhymes. Here, then, is my own personal musing on two republics that failed, with consequences for the whole world: pre-Imperial Rome between 133 BCE and 27 BCE, and Weimar Germany between 1919 and 1933.
*****Probably good advice considering how those two turned out.~JJL
The Paycheck Protection Program will open for most borrowers next week.
Stacy Cowley – NY Times
After giving small lenders a head start, the Paycheck Protection Program will open for all applicants on Tuesday, the Treasury Department said on Wednesday. The stimulus package passed last month included $284 billion in funding to restart the small-business relief effort, which made $523 billion in loans last year to 5.2 million recipients. The new funding will be available both to first-time applicants and to some returning borrowers.
*****John J. Lothian & Company, Inc. qualifies for this program and we will be applying again for a forgivable loan.~JJL
Thursday’s Top Three
Our top story Thursday was “A more perfect union: FIA President and CEO Walt Lukken shares a personal perspective on Washington riots” from the FIA. Second was the JLN exclusive by John Lothian, Transact Futures Bought By Owner Of Ninjatrader Brokerage, An Introducing Broker. Third was the NFA notice, NFA permanently bars Orland Park, Ill. introducing broker LTG Trading LLC and bars its former principal Gary Fullett from membership for five years.
CryptoMarketsWiki Coin of the Week: Polkadot (DOT)
Polkadot’s DOT token has overcome XRP to become the fourth-largest cryptocurrency by market cap, according to data by Messari. This was likely due in large part to an ongoing XPR selloff triggered by the U.S. SEC’s lawsuit against Ripple.
197,286,094 pages viewed; 25,079 pages; 229,176 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
1,487 pages; 13,437 edits
Washington Made a Fortress for Inauguration After Capitol Riot
Chris Strohm – Bloomberg
More than 25,000 security personnel deploying across city; Wray warns of potential violence at U.S. Capitol, statehouses
The week before Joe Biden’s inauguration, downtown Washington looks like a city preparing for war. A huge swath of the city core is blocked off, patrolled by uniformed National Guard forces as part of a buildup not seen since the Civil War. And the U.S. capital is getting even more fortified as federal, state and local officials brace for a worst-case scenario of violence tied to the Jan. 20 inauguration.
ECB Warns Banks Have Yet to Fully Feel Pandemic’s Impact
Carolynn Look, Sotiris Nikas, and Alexander Weber – Bloomberg
Governors see risk of rising bankruptcies and losses; Banks must be ‘extremely prudent’ on dividends, Makhlouf says
The full effect of the pandemic crisis on euro-area banks has yet to be felt as policy support so far has masked losses, several European Central Bank officials warned. “The crisis is not over, and its economic impacts have still to fully emerge,” Irish governor Gabriel Makhlouf said on a panel Friday. “Euro-area banks are likely to face significant losses and further pressure on their already weak profitability prospects” and must be “extremely prudent” on issuing dividends and ensure their capital is able to absorb those losses, he added.
London Fund Managers See Post-EU Threat to $2 Trillion Business
Lucca De Paoli and Silla Brush – Bloomberg
Firms in U.K. pick stocks, bonds for many funds based in EU; Bloc is considering tighter rules on outsourcing key functions
Fund managers in London have already seen stock-trading upended by Brexit. Now, they worry they could be next. As the European Union weighs tighter rules on outsourcing key functions such as stock-picking, there’s a risk that management of some assets could be forced out of London, putting another dent in the city’s status as a global financial center. Firms in the U.K. handle about 1.4 trillion pounds ($1.9 trillion) for hedge and mutual funds in the EU’s main hubs of Ireland and Luxembourg — nearly half of all fund money managed in Britain.
Call the Senate Vote on Trump’s Removal and Be Done With It; Lawmakers shouldn’t dawdle. The country has no time to spare.
Michael R. Bloomberg – Bloomberg
President Donald Trump deserved to be impeached, again — this time for his sustained and unprecedented attempt to invalidate the results of the election and incite the worst assault on the peaceful transition of power our country has ever seen. The most important thing now is for a Senate vote to happen as quickly as possible, so that the specter of this president and all the ugly division he represents does not hang over the new Biden administration.
Brexit Driving Top Dealmakers Out of London and Into the EU
Eyk Henning and Jan-Henrik Foerster – Bloomberg
Goldman Sachs moving bankers to the continent amid new rules; EU-based chaperones are now required for London pitches
The new rules for the bankers who made London financial capital of Europe are still uncertain after Brexit, but one outcome is already clear: a stream of dealmakers across the English Channel.
The Fed Wakes Up to Race; The mighty Federal Reserve wants to help level the playing field. Is it up to the task?
Matthew Boesler, Steve Matthews and Catarina Saraiva – Bloomberg
The scene that Wednesday was familiar, yet startling all the same. Here was another great American institution openly struggling with its fraught history on race.
Corporate PACs Donation Halt Chills a Congress Hooked on Cash
Gregory Korte, Bill Allison, and Ben Brody – Bloomberg
Dozens of companies stopped giving to Congress after mob riot; If ban holds, leadership posts, access to members could change
The unprecedented decision by major U.S. corporations to suspend political contributions to 147 Republican lawmakers after last week’s Capitol riot marks a sudden shift in the congressional campaign money machine, where donors are using their financial clout to punish more extreme views.
They Can’t Leave the Bay Area Fast Enough; As a tech era draws to an end, more workers and companies are packing up. What comes next?
Nellie Bowles – NY Times
The Bay Area struck a hard bargain with its tech workers. Rent was astronomical. Taxes were high. Your neighbors didn’t like you. If you lived in San Francisco, you might have commuted an hour south to your job at Apple or Google or Facebook. Or if your office was in the city, maybe it was in a neighborhood with too much street crime, open drug use and $5 coffees.
Understanding bank and non-bank credit cycles: a structural exploration
C Bora Durdu and Molin Zhong – BIS
Increased lending by non-banks in the last three decades has significantly changed the US financial intermediation system. Additionally, non-banks may affect financial stability, both directly and through their linkages with the banking system. This paper asks what has driven the rapid rise of non-bank intermediation, and how these drivers relate to those for traditional bank credit. It also investigates their combined effects on the economy.
Covid-19 and cyber risk in the financial sector
Iñaki Aldasoro, Jon Frost, Leonardo Gambacorta and David Whyte – BIS
The financial sector has been hit by hackers relatively more often than other sectors during the Covid-19 pandemic.
While this has not yet led to significant disruptions or a systemic impact, there are substantial risks from cyber attacks for financial institutions, their staff and their customers going forward. Financial authorities are working to mitigate cyber risks, including through international cooperation.
Fannie, Freddie Taxpayer Stake Won’t Be Restructured Under Trump; Decision effectively ends push to ensure that mortgage giants eventually return to private hands
Andrew Ackerman – WSJ
The Treasury Department has decided not to restructure the taxpayers’ stake in Fannie Mae and Freddie Mac, effectively ending the Trump administration’s push to ensure that the mortgage giants are eventually returned to private hands.
Trump Clears Fannie-Freddie Capital Boost, Leaves Fates to Biden
Joe Light – Bloomberg
Treasury announces last-minute changes to bailout agreements; Revisions mean U.S.’s stake in companies to keep growing
The Trump administration has set a path for releasing Fannie Mae and Freddie Mac from government control, but President-elect Joe Biden gets to decide whether to take it.
U.S. Moves to Block Telecom Tech From China and Others Deemed Foes; It will be up to Biden administration to pursue the rules, which also name Russia, Iran and North Korea
Bob Davis – WSJ
With its days in power numbered, the Trump administration’s Commerce Department moved ahead Thursday with rules to let the U.S. block purchases of communications technology from China and five other countries deemed foreign adversaries.
Wuhan is at the heart of a battle over the roots of coronavirus; Rival narratives about the origin of the pandemic compete in the Chinese city where it began a year ago
Christian Shepherd – FT
Boxes of imported steaks arriving at the Baishazhou wholesale market in Wuhan go through an elaborate ritual before being placed in the freezers that line one of the city’s largest wholesale markets.
Deutsche Bank chief says EUR18m Wirecard loss shows value of its risk management; Christian Sewing points to relatively small hit from payment provider’s collapse despite EUR80m exposure
Olaf Storbeck – FT
Deutsche Bank chief executive Christian Sewing has said that the relatively small loss the bank suffered in Wirecard’s collapse offers some vindication of its risk management, as a parliamentary inquiry turned its spotlight on to the ties between the payment provider and lenders.
Citi releases $1.5bn in funds set aside to cover pandemic-era defaults; Move demonstrates faith in the US economic recovery as vaccines and more stimulus are rolled out
Laura Noonan – FT
Citigroup has released $1.5bn from its war chest to cover pandemic-era defaults, demonstrating the bank’s faith in the US recovery even as the country is assailed by a fresh surge of Covid-19.
The Covid-19 Death Toll Is Even Worse Than It Looks; World-wide deaths are running far beyond what would have been expected without the pandemic
Paul Overberg, Jon Kamp and Daniel Michaels – WSJ
The recorded death count from the Covid-19 pandemic as of Thursday is nearing 2 million. The true extent is far worse. More than 2.8 million people have lost their lives due to the pandemic, according to a Wall Street Journal analysis of data from 59 countries and jurisdictions. This tally offers the most comprehensive view yet of the pandemic’s global impact. Deaths in these places last year surged more than 12% above average levels.
Global Deaths Near 2 Million; Italy Lockdown Urged: Virus Update
The world’s about to hit a frightening Covid-19 benchmark, with 2 million people dead and few expectations for infections to start dropping any time soon. The U.S. is leading all countries in deaths, with Brazil, India, Mexico and the U.K. next in line.
World Edges Close to 2 Million Covid-19 Deaths, Led by U.S.
Michelle Fay Cortez – Bloomberg
Slow vaccine rollout may mean number won’t drop any time soon; Need to get to where the virus can’t outrace us, expert says
Led by the U.S., the world is about to hit a frightening Covid-19 benchmark, with 2 million people dead and few expectations for the numbers to start dropping any time soon. “You want to get to the point first where the virus can’t outrace you,” said Gregg Gonsalves, an epidemiologist at the Yale School of Public Health and co-director of the Global Health Justice Partnership. “It’s very hard to project out in any fine level of resolution how many people will be dead from this, in even 6 months to a year.”
Norway Warns of Vaccination Risks for Sick Patients Over 80
Stephen Treloar and Lars Erik Taraldsen – Bloomberg
Norway says there are risks that Covid-19 vaccinations may be too risky for the very old and terminally sick, after 23 people died within a short time of receiving their first shot.
Don’t ignore this headline: The pandemic is getting worse. What happens next is up to you
Holly Yan, CNN
Despite hopes of widespread vaccinations this year, experts warned the start of 2021 would be a very rough time in this pandemic. It turns out the first two weeks have been abysmal.
Covid-19 deaths are the highest they’ve ever been — and the more infectious variants could make things much worse
Andrew Joseph – Statnews.com
As horrific as the U.S. Covid-19 outbreak looks right now, it is almost certainly about to get worse. They’ve raced through South Africa, the United Kingdom, and, increasingly, elsewhere, and now, new, more infectious variants of the coronavirus have gained toeholds in the United States. If they take off here — which, with their transmission advantages, they will, unless Americans rapidly put a brake on their spread — it will detonate something of a bomb in the already deep, deep hole the country must dig out of to end the crisis.
Traveling (or Returning) to the U.S.? Prepare to Take a Coronavirus Test; Beginning Jan. 26, international travelers bound for the United States must show negative coronavirus test results before boarding their flights. Here’s what you need to know.
Katherine J. Wu – NY Times
Starting Jan. 26, international travelers arriving in the United States, including Americans returning from abroad, will need to show negative coronavirus test results before boarding their flights — the latest in a wave of policies designed to curb the calamitous spread of Covid-19.
Cash, Breakfasts and Firings: An All-Out Push to Vaccinate Wary Medical Workers; Some staff in hospitals and long-term care facilities don’t want to take the Covid-19 vaccine. Their employers are trying to change their minds.
Rebecca Robbins, Sabrina Tavernise and Sharon Otterman – NY Times
Anxious about taking a new vaccine and scarred by a history of being mistreated, many frontline workers at hospitals and nursing homes are balking at getting inoculated against Covid-19.
Tech Companies Join Effort Focused on Covid-19 Vaccine Records; Microsoft and Oracle are among firms behind the initiative to help consumers demonstrate their vaccination status
Micah Maidenberg – WSJ
Businesses including Microsoft Corp. MSFT -1.53% , Oracle Corp. ORCL -0.74% and Cerner Corp. CERN -0.40% are working with health groups on an effort to help people easily show they have received a Covid-19 vaccine.
Disneyland as a Vaccination Site? Airports as Test Centers? The Travel Industry Pitches In; Devastated by the pandemic, many travel companies have become part of an ad hoc relief effort.
Debra Kamin – NY Times
Five months ago, San Francisco International Airport opened the first airport rapid coronavirus testing site in the United States. Nine months ago, some of the world’s most luxurious hotels, including Claridges in London and the Four Seasons in New York, began housing frontline doctors and nurses. And now another entity in the travel world is performing its own pandemic shift: Disneyland. This week the Anaheim, Calif., theme park began serving as a vaccination super site.
Covid-19 Vaccinations Give Shot in Arm to Israeli Stocks; Israel’s benchmark stock index has outperformed both the S&P 500 and the Euro Stoxx Index this year
Caitlin Ostroff – WSJ
The fastest Covid-19 vaccination rollout in the world is drawing investors to Israel, making its stock market one of the top performers in 2021. Israel’s benchmark TA-125 stock index has gained nearly 6% this year in dollar terms, outperforming both the S&P 500 and the eurozone’s Euro Stoxx Index. Last year, the TA-125 didn’t fare as well as either of those gauges, rising just 4.3% in dollar terms.
Why Many Asian Countries Are Being Cautious on Vaccines
Iain Marlow, Lisa Du, and Jinshan Hong – Bloomberg
Officials across region say they can afford to be cautious; Asia not relying on shots to quell runaway outbreaks
The nations quickest to enact social distancing and contact-tracing systems have mostly kept Covid-19 in check, but their citizens now find themselves lagging in receiving the shots needed to finally end a pandemic that has devastated millions of lives.
A quarter of New York City’s vaccines are going to people who don’t actually live there. Some don’t even work in the city.
Grace Dean – Business Insider
More than 25% of people vaccinated in New York City don’t actually live there, local publication The City reported Tuesday. The city’s essential workers can get vaccines even if they live elsewhere — but non-essential workers from out of the city are also trying to get a shot, the city’s mayor said.
Older Hispanic adults have more vaccine confidence than younger Hispanic adults, according to new data
Virginia Langmaid and Leah Asmelash, CNN
Most Hispanic adults in the United States want to receive a Covid-19 vaccine eventually, but Hispanic adults under 50 are twice as likely to say they will “definitely not get the vaccine,” according to an analysis of Kaiser Family Foundation’s Covid-19 Vaccine Monitor Survey.
Canada’s Flawed Vaccine Plan Sends Snowbirds to U.S. for Jab
Michael Smith and Danielle Bochove – Bloomber
System often lauded for fairness falls short with Covid shots; Some winter migrants say the Florida program should be a model
Canada’s health-care system, long a source of national pride for being more equitable than the U.S., has struggled so hard to deliver Covid vaccines that some of its citizens are heading to Florida to get their jab.
England’s Covid infection rates ease as restrictions are reinforced; Prospect of tighter rules recedes despite NHS remaining under pressure and death rate rising
Chris Giles, Sarah Neville, Jasmine Cameron-Chileshe and Harry Dempsey – FT
Threats of tighter lockdown restrictions in England receded on Thursday as ministers said they would concentrate on enforcing existing rules after encouraging signs that coronavirus infections were beginning to fall across the country.
Coronavirus sparks exodus of foreign-born people from UK; Up to 1.3m may have left in past 12 months, according to research that questions official data
Chris Giles – FT
Coronavirus has sparked an exodus of immigrants from the UK and what is likely to be the largest fall in Britain’s population since the second world war, according to a statistical analysis of official data.
Exchanges, OTC and Clearing
HKEX to Introduce New Stock Futures Contracts and Option Classes
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) the launch of two new stock futures contracts and two new stock option classes on Monday, 25 January 2021.
Qontigo Names Brian McArthur-Muscroft as Chief Financial Officer; Former CFO of Micro Focus International plc Brings Extensive / Public and Private Company Experience, as Growth Plans Accelerate
Deutsche Börse Group
Qontigo announced today the appointment of Brian McArthur-Muscroft as Chief Financial Officer. McArthur-Muscroft was formerly CFO of Micro Focus International plc, the British multinational software and information technology company, where he also served as a member of the board of directors since 2018.
Boerse Stuttgart Launches Nordic Growth Market Trading Segment For Swedish Equities – Greater Visibility For Equities With Primary Listing On NGM And Secondary Listing In Stuttgart
Boerse Stuttgart and its Scandinavian subsidiary Nordic Growth Market (NGM) are combining their services in the equity sector. The two exchanges will work together even more closely as listing venues in the future: The “Nordic Growth Market” trading segment is created for Swedish equities listed on NGM with a secondary listing in Stuttgart. The new Boerse Stuttgart trading segment initially comprises the Swedish equities of Eurobattery Minerals AB, Metacon AB, Quickbit EU AB and Raytelligence AB, which are tradeable for German investors in euro every exchange trading day from 9.00 to 17.30 CET. Further equities are to be included in the segment continually at the request of NGM. The function of quality liquidity provider in trading at Boerse Stuttgart is performed by EUWAX AG, which is also the liquidity provider in equities trading at NGM.
Recommended read: “Understanding and using VSTOXX® Futures”
Warren Buffett famously suggested that successful investors should “Be fearful when others are greedy. Be greedy when others are fearful.” That leaves investors asking, “how can we know whether others are fearful or greedy?” In his article, Tariq Dennison of GFM Asset Management, takes a closer look at one of the “fear barometers” – the VSTOXX® volatility index, and explains how this benchmark is calculated and how the Eurex-listed VSTOXX® Futures contracts can be used to trade short-term volatility or harvest yield.
T7: Introduction of a consolidated partition-specific Gateway and Matching Engine process; Eurex Circular 005/21 T7: Introduction of a consolidated partition-specific Gateway and Matching Engine process
In the first half of 2021, Eurex Exchange will improve the internal configuration of the Matching Engine and partition-specific (PS) Gateway processes on T7 by consolidating them on the same server.
Introduction of equity options on US shares admitted to Xetra trading; Eurex Circular 004/21 Introduction of equity options on US shares admitted to Xetra trading
The Management Board of Eurex Deutschland took the following decision with effect from 25 January 2021:
Expansion of the 6.25 Basis Point Strike Price Listing Schedule of the Options on Three-Month Eurodollar and Three-Month SOFR Futures Contracts
Effective Sunday, January 24, 2021 for trade date Monday, January 25, 2021, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will expand the 6.25 basis point strike price listing schedule for the Options on Three-Month Eurodollar Futures (Rulebook Chapter 452A) and Options on Three-Month SOFR Futures contracts (Rulebook Chapter 460A) (the “Contracts”) for trading on the CME trading floor, the CME Globex trading platform (“CME Globex”) and for submission of clearing via CME ClearPort as noted in the tables below.
Initial Listing of the Ether Futures Contract
Effective Sunday, February 7, 2021, for trade date Monday, February 8, 2021, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. (“CME” or “Exchange”) will list the Ether Futures contract (the “Contract”) for trading on the CME Globex electronic trading platform (“CME Globex”) and for submission for clearing via CME ClearPort as more specifically described below.
Holiday Processing for LargeTrader 2021
Please be advised that CME Group observes the following U.S. -recognized holidays during the 2021 calendar year.
Notice of Summary Action
MEMBER: ABN AMRO CLEARING CHICAGO LLC
RULE VIOLATION: 536. RECORDKEEPING REQUIREMENTS FOR PIT, GLOBEX AND NEGOTIATED TRADES
F. CTR Enforcement Program and Sanction Schedule
(In pertinent part)
The Market Regulation Department will conduct audits of clearing members in order to verify the accurate recording and submitting of required audit trail information.
PENALTY: Pursuant to the Rule 536.F sanction schedule, ABN AMRO Clearing Chicago LLC was issued a $2,500 fine on December 28, 2020 for its first violation of Rule 536.F. within 24 months.
Notice of Summary Action
MEMBER: STONEX FINANCIAL INC
RULE VIOLATION: 536. RECORDKEEPING REQUIREMENTS FOR PIT, GLOBEX AND NEGOTIATED TRADES
F. CTR Enforcement Program and Sanction Schedule
(In pertinent part)
The Market Regulation Department will conduct audits of clearing members in order to verify the accurate recording and submitting of required audit trail information.
PENALTY: Pursuant to the Rule 536.F sanction schedule, StoneX Financial Inc. was issued a $2,500 fine on December 28, 2020 for its first violation of Rule 536.F. within 24 months.
JPX Monthly Headlines – December 2020
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.
Top Israeli Asset Manager Plans to Invest $2 Billion in Fintech
Yaacov Benmeleh – Bloomberg
Migdal seeking equity, debt deals in Israel, U.S. and Europe; Insurer to boost fintech investments to 5%-10% of portfolio
Migdal Insurance & Financial Holdings Ltd., one of Israel’s biggest money managers, plans to invest about $2 billion in financial technology over the next two years, broadening its search for higher yields at a time of globally low interest rates.
Ant Group Is Moving Quickly to Comply With Regulations, China’s Central Bank Says; The fintech giant has set up a working group to address problems recently flagged by Chinese regulators
Xie Yu – WSJ
Chinese financial-technology giant Ant Group Co. is working expediently to rectify its business practices and comply with regulatory requirements, a top central bank official said on Friday. Chen Yulu, deputy governor of the People’s Bank of China, said at a press briefing that Ant has set up a working group to address problems recently flagged by Chinese regulators.
What’s Next For Fintech Infrastructure After Visa And Plaid Call It Off
Lindsay Davis – Forbes
The pandemic is an inflection point in fintech’s lifecycle, pushing adoption and application capacity beyond the mainstream customer’s expectations. Many of these financial apps rely on infrastructure including Plaid’s financial data aggregation via APIs and webhooks, to build these digital financial services. Though the $5.3 billion merger agreement between Plaid and Visa was mutually terminated under pressure from the Department of Justice’s investigation, the market opportunity has grown substantially as fintech apps crossed over from targeted niche services to mass market adoption.
Liquidators Want More Power to Probe South African Bitcoin Trader
Roxanne Henderson – Bloomberg
Police investigating firm called illegal by finance regulator; Mirror Trading International says it has over 260,000 members
The investigation into a failed South African Bitcoin trader is deepening as provisional liquidators appointed to seize control of Mirror Trading International seek to widen the scope of their inquiry.
Bitcoin securities trading surges as investors seek crypto exposure
Steve Johnson – FT
Investors have raced to buy and sell bitcoin-linked securities on both sides of the Atlantic, with one German exchange traded product garnering trading volumes matching Europe’s most popular funds. BTCetc Bitcoin Exchange Traded Crypto (BTCE) has recorded average daily trading amounting to EUR57m in the first 11 days of January, according to data from Deutsche Börse. A similar trend has taken hold on Wall Street. Grayscale’s Bitcoin Trust, which like its German counterpart tracks the price of the digital currency, has posted average daily turnover of almost $1bn in the first two weeks of this year, amounting to more than nine-times the average in 2020, Bloomberg data show. Its assets under management have boomed to $23bn from $17bn at the end of December and $2bn at the start of 2020.
Investors urged to exercise caution after bitcoin price swings
Madison Darbyshire – FT
Finance experts have urged retail investors to take care when buying into bitcoin after the UK regulator this week warned savers of the risks of putting money into volatile cryptocurrencies. The Financial Conduct Authority cautioned that the market for cryptoassets offered little protection for consumers and firms offering them often overstated the rewards and downplayed the risks. The value of bitcoin has more than tripled since October, and valuations surged past $40,000 before falling in a weekend sell-off as investors dumped holdings. On Monday alone, cryptocurrencies lost more than $150bn in value, according to data from Coin Metrics. By Thursday, bitcoin had recovered much of the lost ground, trading at over $39,000.
Help! Anyone remember my bitcoin password? Some stores of value are clearly overdoing the storing part
Henry Mance – FT
Let me explain my reaction to the news that a San Francisco-based programmer has nearly £200m in Bitcoin, but cannot remember the password. According to the New York Times, Stefan Thomas has only two more guesses to access the keys to a digital wallet that contains his fortune. Otherwise he loses the lot. I think there was a brief moment when I found it hilarious. Then I found it too painful to think about. Now I have reached a state of acceptance.
Crypto finally becomes bigger than?.?.?.? the world; Just another day in crypto-paradise.
Jemima Kelly – FT
Remember when bitcoin was “the ninth-biggest asset in the world”? Pretty impressive stuff (even if not actually true). Well bitcoin had better move aside because there’s another, bigger crypto token in town. In fact every asset in the world had better move aside — all of them combined, in fact.
FinCEN reopens comment period for proposed crypto wallet rule
Aislinn Keely – The Block
The Financial Crimes Enforcement Network (FinCEN) has reopened the comment period for its proposed rule that would create new KYC requirements for crypto transactions in the U.S. Commenters will have an additional 15 days to submit written comments on the reporting requirements related to a $10,000 transaction limit proposed in the rule. Another 45 days will be given to comment on the proposal that banks report counterparty information related to transactions with self-hosted wallets. The proposed “Requirements for Certain Transactions Involving Convertible Virtual Currency of Digital Assets,” would subject all wallets to know-your-customer requirements and reporting requirements for transactions greater than $3,000.
Jerome Powell says the Fed’s work on stablecoin risks is a ‘very high priority’
MK Manoylov – The Block
Federal Reserve chairman Jerome Powell described the central bank’s work on stablecoins as a “very high priority” during a webinar on Thursday. “Clearly there’s a need for, and we’ve been very focused as you know, on better regulatory answers for potential global stablecoins, in particular,” Powell said during a segment that focused in part on central bank digital currencies (CBDCs) as well. His comments indicate that the Fed’s stablecoin strategy is still in flux and that it sees the need to both chart out potential risks and how to mitigate them.
Tether’s Bank Says It Invests Customer Funds in Bitcoin
Nikhilesh De – Coindesk
Deltec, Tether’s Bahamas-based bank, announced Thursday it was investing customer funds in bitcoin. The announcement, made by Deltec Bank & Trust Chief Investment Officer Hugo Rogers during a year-in-review video, raises new questions about whether the dollar-pegged USDT stablecoin, which is in theory backed by cash and “cash equivalents,” as well as “other assets and receivables made by loans,” is actually backed in any way by bitcoin. “We bought bitcoin for our clients at about $9,300 so that worked very well through 2020 and we expect it to continue working well in 2021 as the printing presses continue to run hot,” Rogers said in the video.
Advisers Allocating Crypto in Clients’ Portfolios Rose 49% Last Year: Survey
Tanzeel Akhtar – Coindesk
The number of financial advisors allocating crypto to client portfolios rose 49%, with client interest substantially increasing in the past year, according to a Bitwise survey. Bitwise Asset Management said 81% of financial advisers reported that they had received a question from a client about crypto in the past 12 months, compared to 76% the previous year. The number of advisers allocating to crypto in client portfolios rose from 6.3% to 9.4% in 2020. Information was collected from 994 independent registered investment advisers, broker-dealers, financial planners, and wirehouse representatives. Almost 74% of the advisers said they thought their clients were or could be investing in crypto outside of their adviser relationship.
Alt-Right Groups Received $500K in BTC Month Before Capitol Riot: Chainalysis
Danny Nelson – Coindesk
UPDATE (7:28 PM EST 1/14/21): Federal agencies are investigating the bitcoin donations, the New York Times reported Thursday. Chainalysis told CoinDesk it “informed all appropriate government agencies” of the moving funds. Alt-right extremist groups and a handful of personalities linked to last week’s storming of the U.S. Capitol building received a bitcoin donation worth about $522,000 one month before the D.C. siege, according to crypto tracing firm Chainalysis. Chainalysis explained in a Thursday blog post that an unnamed French blogger sent 28.15 BTC to 22 wallets on Dec. 8. Nick Fuentes, the far-right internet personality whose livestream from the Capitol takeover resulted in his banning from the streaming site DLive, received the single-largest donation: about $250,000, or 13.5 BTC.
Feds edge closer to sedition charge in Capitol riot aftermath; The language was included in a filing in federal district court in Arizona, intended to deny bail to Jacob Anthony Chansley, a man they describe as “an active participant in” and “the most prominent symbol of” the insurrection.
Kyle Cheney and Josh Gerstein – Politico
Federal prosecutors on Thursday for the first time described last week’s assault on the U.S. Capitol as a “violent insurrection that attempted to overthrow the United States Government” — and one they consider to still be underway.
Billionaires backed Republicans who sought to reverse US election results; Guardian analysis shows Club for Growth has spent $20m supporting 42 rightwing lawmakers who voted to invalidate Biden victory
Stephanie Kirchgaessner – The Guardian
The Club for Growth’s biggest beneficiaries include Josh Hawley and Ted Cruz, above, the duo who led the effort to overturn the election result. Photograph: Erin Scott/EPA
Another Tenant Wants Out Of Donald Trump’s Wall Street Skyscraper
Dan Alexander – Forbes
A nonprofit organization named TB Alliance is looking for ways to move out of its space at 40 Wall Street, the president’s skyscraper in downtown Manhattan.
Scaramucci: Trump is the domestic terrorist of the 21st century
Anderson Cooper – CNN
Former White House Communications Director Anthony Scaramucci tells CNN’s Anderson Cooper why he believes President Donald Trump will be viewed as a domestic terrorist by historians in years to come.
Airlines, FAA Tighten Security Ahead of Biden Inauguration; American is extending an alcohol sales ban and several airlines won’t allow passengers to carry firearms in checked luggage
Alison Sider – WSJ
Airlines are preparing for heightened tensions ahead of President-elect Joe Biden’s inauguration next week, following last week’s deadly riot at the U.S. Capitol and a spate of incidents on flights to and from Washington, D.C.
Departing Antitrust Chief Backs Changes to Strengthen Enforcement; Makan Delrahim says policy makers may want to toughen rules for mergers, competition in the tech space
Brent Kendall – WSJ
The Justice Department’s antitrust chief, Makan Delrahim, has presided over a tumultuous time for the enforcement of U.S. competition law. Appointed by President Trump in 2017, Mr. Delrahim’s tenure began with a sweeping loss: a court rejection of his division’s challenge to AT&T Inc.’s acquisition of Time Warner, a case clouded by the president’s repeated criticisms of the deal. He finishes with a win, as Visa Inc. this week walked away from a $5.3 billion deal to buy an up-and-coming fintech firm after the Justice Department challenged it using a progressive legal theory about protecting future competition in the online-payments space.
Trump Order Clarifies Chinese Company Ban, But Questions Linger; Compliance officers are struggling to figure out whether related companies—not just those on the blacklist—are also blocked, lawyers say
Jack Hagel – WSJ
A new executive order by President Trump attempts to clear up questions about what American investors must do to divest securities of a growing list of companies that the U.S. says help the Chinese military. The order is the latest in a series of attempts by the Trump administration to clarify fuzzy rules related to a Nov. 12 directive barring investments in companies designated by the U.S. as “Communist Chinese military companies.”
24 Warning Signs of an Insurrection That Should Have Been Obvious; And 11 shameful rationalizations that prevented so many Americans from seeing how bad things were getting
David Montgomery – Washington Post
Donald Trump’s rhetoric had consequences from the beginning of his presidential candidacy. In June 2015, he descended the golden escalator in Trump Tower to the cheers of fans, tourists and, reportedly, paid actors. His announcement speech was a potpourri of Trumpian braggadocio and vanity, with a dash of American optimism, all steeped in resentment — resentment against unnamed political elites, corrupt system-riggers, freeloaders, losers, Democrats and foreigners. He warned of the “rapists” invading from Mexico.
Insurrections Can Be Contagious, Too; What will people at the extremes think and do about what happened in Washington on Jan. 6?
Tyler Cowen – WSJ
Revolts and rebellions can be highly contagious social events. The American Revolution set off upheavals around the world. The Bolshevik revolution sparked related attempts in many other countries. The Arab Spring was a series of correlated events. A few Black Lives Matter demonstrations in the U.S. led to many more, in many other countries.
U.S. Military, Watchdog Reviewing Extremism in Ranks After Riot
Travis J Tritten and Anthony Capaccio – Bloomberg
Troops and National Guard are being monitored for extremism; Services saw a rise in activity over the past 12 months
The U.S. Defense Department is “doing everything it can” to root out extremism in the ranks after some troops and veterans joined the Capitol siege on Jan. 6, Pentagon leaders said Thursday.
New York Congressman Who Got Vaccine Diagnosed With Covid
Teaganne Finn – Bloomberg
Democratic Representative Adriano Espaillat of New York said he tested positive for Covid-19 after receiving the second dose of a vaccine, and is isolating at home. “I received the second dose of the #COVID19vaccine last week and understand the affects take time,” Espaillat said on Twitter Thursday. “I have continued to be tested regularly, wear my mask and follow the recommended guidelines.”
Joe Scarborough: ‘We made the same mistake that people made during Hitler’s rise’
Erik Wemple – Washington Post
Donald Trump’s presidency is ending with a Capitol riot, a second impeachment, a democracy in peril and the usual truckload of lies. With the transfer of power set to take place next Wednesday, now is a logical time to reflect on how we got here.
Snapchat says it will permanently ban Trump when he leaves office on January 20
Kevin Shalvey – Business Insider
Snap said it would permanently ban President Donald Trump when he leaves office on January 20, saying his account was a threat to public safety. “In the interest of public safety, and based on his attempts to spread misinformation, hate speech, and incite violence, which are clear violations of our guidelines, we have made the decision to permanently terminate his account,” a Snap spokesperson told Insider on Thursday.
Supreme Court Justices Getting Covid Vaccine, Spokeswoman Says
Greg Stohr – Bloomberg
The U.S. Supreme Court justices are in the process of being vaccinated for Covid-19, with Chief Justice John Roberts among those who have already received both doses, a spokeswoman said.
‘QAnon Shaman’ Capitol rioter wants pardon from President Trump
Tamar Lapin – NY Post
The attorney representing the so-called “QAnon Shaman” who stormed the US Capitol in a bizarre getup says President Trump should pardon his client before he leaves office next week.
SEC Awards Nearly $600,000 to Whistleblower; Awards Have Now Surpassed Record Amounts Awarded Last Fiscal Year
The Securities and Exchange Commission today announced an award of nearly $600,000 to a whistleblower whose tip led to the success of an enforcement action. The whistleblower substantially contributed to an open investigation by providing detailed and highly valuable information resulting in critical investigative leads.
Hedge Fund Trader Faces Extradition to Belgium Over Cum-Ex
Ellen Milligan – Bloomberg
Guenther Klar may be first Cum-Ex extradition from U.K.; Klar sought for questioning in connection to tax-fraud case
A veteran trader with links to Cum-Ex “mastermind” Sanjay Shah faces extradition to Belgium as criminal probes related to the controversial tax strategy expand throughout Europe. Guenther Klar, who previously worked for Shah’s Solo Capital hedge fund, is being sought for questioning by Belgian prosecutors as part of an investigation into Cum-Ex trading. A London judge is scheduled to rule on the request Thursday.
Exxon Draws SEC Probe Over Permian Basin Asset Valuation; Whistleblower complaint alleges that lower-level employees were pressured to use unrealistic assumptions on drilling
Christopher M. Matthews and Emily Glazer – WSJ
The Securities and Exchange Commission launched an investigation of Exxon Mobil Corp. XOM 3.90% after an employee filed a whistleblower complaint last fall alleging that the energy giant overvalued one of its most important oil and gas properties, according to people familiar with the matter.
ESAs’ Board of Appeal dismisses case against the EBA on alleged non-application of Union law as manifestly inadmissible
The Joint Board of Appeal of the European Supervisory Authorities (ESAs – European Banking Authority, European Insurance and Occupational Pensions Authority, and European Securities and Markets Authority) published today its decision in relation to an alleged non-application of Union law by eight national competent authorities brought by Mr Howerton against the European Banking Authority (EBA). In its decision, the Board of Appeal dismisses the Appellant’s claim as manifestly inadmissible as the facts described do not seem to involve a subject-matter within the remit of the EBA nor of the Board of Appeal.
Order Granting Approval of Amendments to PCAOB Interim Independence Standards and PCAOB Rules to Align with Amendments to Rule 2-01 of Regulation S-X
FCA publishes Defined Benefit Advice Assessment Tool
The FCA Defined Benefit Advice Assessment Tool (DBAAT) helps the market understand how we assess the suitability of Defined Benefit (DB) pension transfer advice.
Supreme Court judgment in FCA’s business interruption insurance test case
The Supreme Court has today delivered its judgment in the Financial Conduct Authority’s (FCA)’s business interruption insurance test case.
Investing and Trading
The US inflation pressure cooker may be steaming; Investor reappraisal of rising price risks produces some surprising investment results
Gillian Tett – FT
What was the best-performing asset class in 2020? If you think “tech stocks” or “bitcoin”, think again. Instead, as the Bridgewater hedge fund recently wrote to its clients, “among the more interesting and least recognised outcomes” of 2020 was that US inflation-linked bonds beat other assets by delivering a 35 per cent return, on a risk-adjusted basis, as investors hedged against inflation risks.
Oil Market Has Plenty of Wild Cards Remaining; The suspense of OPEC and its partners’ strained meeting has been resolved, but there is still room for surprise from two countries outside that group
Jinjoo Lee – WSJ
Saudi Arabia’s decision to dramatically cut its oil output was a pleasant New Year’s surprise for energy investors. Developments in the world’s two largest economies could cut the party short. The kingdom’s move has helped send front-month Brent crude oil prices up by 7% in two weeks to above $55 a barrel. The cut erases a substantial 1 million barrels a day of supply—about 1% of world demand—in February and March, as the market still faces uncertain oil demand with surging Covid-19 cases.
Poshmark’s Stock Price More Than Doubles, Latest in String of Soaring IPOs; Company behind a marketplace for used goods, Petco sold shares in IPOs Thursday
Micah Maidenberg and Charity L. Scott – WSJ
Poshmark Inc.’s POSH 141.67% stock more than doubled in its market debut Thursday, boosted by rising demand for secondhand merchandise and the huge interest in new public offerings.
When Some Investors Look at Stocks They See Dollars, Not Shares; A new way of stock-market wagering is taking hold among younger investors who prefer to think about how much they can spend instead of how many shares they can afford.
Julia Carpenter – WSJ
Purchasing a piece of Apple or Tesla once meant calculating how many shares you could afford to buy. That no longer matters. Now you can pay whatever you’re willing to spend, even if that amounts to pocket change.
Tesla Shares Worth $1,250 in Top Scenario, Wedbush Says
Katrina Nicholas – Bloomberg
Wedbush analyst raised his price target on EV demand in China; Says electric car sales could make up 10% of total by 2025
Tesla Inc.’s stock could touch $1,250 in a bull-case scenario as consumer demand for greener cars surges in China, Wedbush analyst Dan Ives wrote in a Jan. 14 note.
Native Americans say U.S. does not own land it is about to give to Rio Tinto
Ernest Scheyder – Yahoo News
Members of Arizona’s San Carlos Apache tribe filed a property lien on Thursday in an attempt to regain control over land that the U.S. government is poised to give to Rio Tinto Ltd for the Resolution Copper mine.
Liquidity Begets Liquidity
Despite the fact that 2020 has likely been one of the most challenging years of our lives, the cryptocurrency market has never been stronger. Institutions, including hedge funds and publicly traded companies, have been pouring billions of dollars into Bitcoin in an effort to protect against global inflation that is almost certain to take hold over the coming years.
BlackRock Quant Says She Learned Resilience Working With Refugees; Simona Paravani-Mellinghoff says writing a children’s book and teaching machine learning help to keep her from becoming a ‘dinosaur.’
Ksenia Galouchko – Bloomberg
SIMONA PARAVANI-MELLINGHOFF, who oversees $286 billion as BlackRock Inc.’s global chief investment officer of solutions within multi-asset strategies, never wants to stop learning. The first in her family to go to university, and with a grandmother who was illiterate, the Italian-born Paravani-Mellinghoff has seen the power of education firsthand.
LNG rally heralds more volatile gas prices to come; Spike in demand from Asia triggers scramble for supplies
David Sheppard – FT
When restaurants in Japan open their windows to help combat the spread of Covid-19, you might not think it would have much effect 6,000 miles away in lockdown Britain.
Performance test looms for $900bn private debt market; Investors who made loans during calmer times before pandemic face a reckoning, analysts say
Michael Mackenzie – FT
Private debt investors face a shakeout, fund managers have warned, after a decade-long boom propelled the sector’s assets to around $900bn.
Environmental, Social and Corporate Governance
How Sustainable Is the Rally in Renewable Energy Stocks? Solar and wind power companies have soared in value. Are they in a bubble or in a virtuous upward cycle?
Norm Alster – NY Times
The overall stock market was fabulous last year, but as investors focused on climate change, renewable energy stocks did even better. Consider that while the SPDR S&P 500 Exchange-Traded Fund Trust, which tracks the benchmark S&P 500, returned 18.37 percent in 2020, the Invesco Solar E.T.F., which tracks an index of solar energy stocks, soared 233.95 percent, according to Morningstar Direct. The Invesco WilderHill E.T.F., which invests more broadly in alternative energy of various types, rose 204.83 percent.
Trump’s New ESG Rules Won’t Be Easy for Biden to Undo
Howard Fischer – Barron’s
Funds that focus on environmental, social, and governance issues are picking up momentum. Inflows in 2020 more than doubled compared to the previous year, with 2021 likely to show more acceleration. Yet to a large degree the success of these and other ESG initiatives hinges not on market conditions, investor demand, or even on legislative action, but instead on the decisions of unelected agency administrators. The regulatory state is the iceberg beneath the surface. Even though unseen, it has the power to scuttle seemingly unassailable vessels.
Colombia to Cash in on ESG Boom With Monthly Green Bond Auctions
Ezra Fieser and Oscar Medina – Bloomberg
Colombia plans to take advantage of the rise in socially conscious investing with the offering of its first green bonds.
The government will issue as much as 2 trillion pesos ($575 million) of the notes in monthly auctions in the second half of the year, and will continue the sales beyond that, said Cesar Arias, director of public credit.
New York Joins ESG Battle Against Tyson After Virus Outbreak
Isis Almeida and Michael Hirtzer – Bloomberg
New York state has joined investors managing trillions of dollars in pressuring Tyson Foods Inc. to improve its practices after slaughterhouses became coronavirus hot spots last year.
James Simons Steps Down as Chairman of Renaissance Technologies; Investing pioneer remains on board, while CEO Peter Brown takes on chairman role
Gregory Zuckerman – WSJ
James Simons, who helped lead a quantitative revolution that has swept the world of finance, is stepping back from his hedge fund on the heels of a terrible year for clients, but a terrific one for the firm’s employees.
Banks Can’t Blacklist Entire Industries Under New OCC Rule; Rule comes in response to complaints from oil-and-gas businesses
Andrew Ackerman – WSJ
Banks would be prohibited from refusing to lend or provide other services to entire categories of lawful businesses under a rule a top bank regulator completed Thursday, his last day before stepping down.
Ex-Credit Suisse CEO Thiam Rules Himself Out of UniCredit Race
Stefania Spezzati – Bloomberg
Tidjane Thiam is working on launching a blank-check firm; UniCredit searching for candidates to replace CEO Mustier
Former Credit Suisse Group AG Chief Executive Officer Tidjane Thiam ruled himself out of the running for the top job at UniCredit SpA, narrowing the field to a handful of top Italian executives.
Goldman Sachs and JPMorgan Are Betting on the European Stock Market
Michael Msika – Bloomberg
Global recovery to boost euro-area banks, resources companies; U.K. stocks have most upside now that Brexit is out of the way
Investor bets on a global economic bounce, which is fueling a recovery in stocks that have been left behind in the rally, signal good times for the European equity market in 2021.
JPMorgan’s Trading Surge, Credit Outlook Fuels Record Profit
Michelle F Davis – Bloomberg
Net income surges 42% on trading gain, reserve releases; Vaccine, stimulus led to lowering credit reserve, Dimon says
After four quarters under the shadow of the pandemic, the biggest U.S. bank is hardly missing a beat. JPMorgan Chase & Co. posted record profit in the fourth quarter after a surge in trading and investment-banking fees helped its Wall Street unit close out its most profitable year ever. The bank also released loan-loss reserves for the second quarter in a row, a sign that defaults won’t take as big a toll as previously expected.
JPMorgan reverses $3bn of loan loss charges; Net income jumped 42 per cent in the final three months of 2020
Laura Noonan – FT
JPMorgan Chase has reversed almost $3bn of loan loss charges taken at the height of the pandemic, helping America’s biggest bank to a 42 per cent surge in net income for the final three months of 2020 versus a year earlier.
BlackRock Profit Rises 19% as Assets Surge to $8.7 Trillion; Assets under management by the world’s largest money manager hit a new high
Dawn Lim – WSJ
BlackRock Inc.’s BLK -4.65% quarterly profit rose 19% as investors turned to the money-management giant’s funds through election uncertainty, vaccine breakthroughs and a year-end rally. The investment company posted fourth-quarter profit of $1.5 billion, or $10.02 a share, up from $1.3 billion, or $8.29 a share, a year earlier. BlackRock’s revenue rose 13% to about $4.5 billion in the final three months of 2020.
BlackRock expands sustainable insights on Aladdin with stake in data science firm; Sustainable investing analytics will be added to Aladdin after BlackRock took minority stake in data science firm Clarity AI.
Hayley McDowell – The Trade
Asset management heavyweight BlackRock has taken a minority stake in data science and sustainable investing analytics firm, Clarity AI, which will be integrated with its Aladdin platform.
Goldman Sachs Declares Preferred Stock Dividends
The Goldman Sachs Group, Inc. (NYSE: GS) today announced that it has declared dividends on the following series of its non-cumulative preferred stock (represented by depositary shares, each representing a 1/1,000th interest in a share of preferred stock, except for the Series Q Preferred Stock, the Series R Preferred Stock and the Series S Preferred Stock in which each depositary share represents a 1/25th interest in a share):
Wells Fargo profits rise as loan losses fall; Share buybacks likely as earnings beat expectations
Laura Noonan – FT
Wells Fargo enjoyed a modest increase in profits for the fourth quarter of the year, as falling credit costs more than offset a 10 per cent fall in revenue.
Europe Drops Another Project to Buy U.S. LNG in Green Push
Sergio Chapa and Anna Shiryaevskaya – Bloomberg
NextDecade memorandum to build LNG terminal in Ireland expires; U.S. developers seeking to sell LNG to EU have faced setbacks
Developers of liquefied natural gas projects in the U.S. are facing more hurdles in their plans to ship the fuel to Europe.
What Japan’s Disaster-Proofing Strategies Can Teach the World; The country’s infrastructure is already one of the world’s safest, and investment in risk management is ramping up.
Marika Katanuma – Bloomberg
In Japan, planning for natural disasters is a serious business. For good reason. Over the past decade, the island nation has weathered about 20% of the world’s “strong” earthquakes (magnitude 6 or greater) as well as multiple tropical storms a year. The worst of these events can be utterly devastating: The 2011 Tohoku earthquake, which triggered a massive tsunami and a meltdown at the Fukushima Dai-Ichi nuclear power plant, killed more than 15,000 people.
Commodity body seeks cut in transaction tax to boost volumes
The Commodity Participants Association of India (CPAI) has pushed for Commodity Transaction Tax (CTT) to be at 0.005 per cent from 0.01 per cent to boost volumes and treat it as tax paid under Section 80E.
Investing in China Gets More Complicated as Tensions With the U.S. Rise; The New York Stock Exchange has cut three companies from the Big Board. Will things change in a Biden administration?
Lananh Nguyen – Bloomberg
From its historic trading floor to the $126 billion worth of shares exchanged daily to the bell that marks the open and close of the trading day, the New York Stock Exchange is a symbol of both the might and the reliability of U.S. financial markets.
Wheat Jumps as Top Shipper Russia Signals Prolonged Export Tax
Megan Durisin and Yuliya Fedorinova – Bloomberg
Country will add duty on wheat cargoes at EU50/ton from March; Russia to continue taxing wheat exports beyond this season
Wheat rose to a six-year high in Chicago after top exporter Russia said it’s ratcheting up efforts to cool domestic food inflation by curbing grain exports.
Norway Wealth Fund Hires a Sports Psychologist to Train Managers on Risk
Ott Ummelas – Bloomberg
Norway’s $1.3 trillion sovereign wealth fund, the world’s largest, hired a sports psychologist who trains military pilots to make its managers more comfortable with taking risks. The fund’s new Chief Executive Nicolai Tangen, who said he has worked with a sports psychologist for eight years, expects the move to boost returns by benefiting “mental strength and robustness” of the staff, according to an interview with local news service E24.no, published Friday.
Fight for World’s Top Currency Plays Out Among Nordic Neighbors
Todd Gillespie – Bloomberg \]
Norway’s krone set to rise most among G-10 peers, surveys show; Oil-dependent currency bolstered by improving growth outlook
Norway’s krone has taken an early lead in this year’s battle to be the world’s best-performing major currency, as a blistering rally that catapulted its neighbor to the top spot in 2020 begins to fade.
China Central Bank Says Ant Is Working on Timetable for Overhaul
Lulu Yilun Chen – Bloomberg
PBOC says Ant is also ensuring business operations continue; Regulators are in close contact with Ant’s special task force
China’s central bank said Ant Group Co. is working on a timetable to overhaul its business while ensuring operations continue, offering little clue on how far the financial technology giant needs to go to assuage Beijing.
Hong Kong Exodus Could Spur $36 Billion in Outflows: BofA
John Cheng – Bloomberg
Bank of America expects outflows as people leave for U.K.; Flows considerable enough to subdue Hong Kong dollar strength
Hong Kong could see capital outflows of as much as $36 billion this year as residents leave the city for the U.K. in response to China’s sweeping security law, keeping the local dollar off the strong end of its trading band with the greenback.
India Gold Demand Set to Climb as Buyers Unleash Pent-Up Demand
Swansy Afonso, Haslinda Amin, and Rishaad Salamat – Bloomberg
Gold demand in the world’s second-biggest user will rebound this year after collapsing in 2020 as the rollout of vaccines pushes life back closer to normal, according to the World Gold Council.
From Suez to Brexit and back again: Britain’s long search for a role; Britain’s departure from the EU reopens a difficult debate over its place in the world
Philip Stephens – FT
A distinguished Whitehall scientist sounded the alarm. Henry Tizard had served during the war as a special emissary between Winston Churchill and Franklin D Roosevelt, criss-crossing the Atlantic to manage the exchange of military secrets. A thoughtful, unflashy civil servant, Tizard became chief defence scientist in Clement Attlee’s government.
UK fishers cry foul as Brexit red tape leaves catch rotting
Jill Lawless – PBS NewsHour
British fishing communities were among the strongest supporters of Brexit. But now some say they face ruin because of new red tape imposed by the U.K.’s departure from the European Union.
One seafood firm has threatened to dump rotting crustaceans on the government’s doorstep if the situation doesn’t improve within days.
Axios Wants to Help Companies Write Like Its Reporters—for $10,000 a Year, or More; AxiosHQ communications platform to launch with Delta Air Lines and AT&T among early customers
Benjamin Mullin – WSJ
Punchy news startup Axios is betting that companies will pay big bucks to write like its reporters. The company next month will launch AxiosHQ, a communications platform that will enable businesses to update their employees—including through internal newsletters—in Axios’s just-the-facts, bullet-point style.
Why the Tokyo 2020 Olympics Still Aren’t a Sure Thing
Jon Herskovitz – Blomberg
When the coronavirus pandemic forced Tokyo last year to delay the Summer Olympics and Paralympics to July 2021, organizers kept the Tokyo 2020 name, saying they wanted the event to be seen as a “light at the end of the tunnel.” Instead a fresh surge in Covid-19 cases in many countries, including host Japan, has raised the same questions about whether it’s safe to hold the games, even as the world races to vaccinate people against the disease. The first postponement since the modern Olympics began in the 19th century could turn into the first cancellation since World War II.