Hits & Takes
By John Lothian & JLN Staff
My son Robby has been dropped off at the University of Missouri at Columbia. Cheryl and I will be making our way back to Illinois tomorrow. We are doing our best to stay socially distant and safe, but there are a lot of people in gas stations and other venues who don’t wear masks.
Robby is in a two-person apartment close to campus, but all his classes are online now. Yesterday, the University of North Carolina moved all their classes online because of an outbreak of COVID-19. Their positivity rate went from 2.8% to 13.6% and they had 130 new cases of the virus.
As I mentioned before, I believe we will see an explosion of cases of the virus in college towns this fall and we may even see some universities shut down later in the fall. We can only work hard and hope that is not the case.
Pizza Hut announced yesterday they were closing 300 restaurants, which would be another restaurant I have not been to in 30 years closing stores. These restaurants were operated by franchisees who have gone bankrupt.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Jessica McCaskill, a regulatory reporting analyst for R.J. O’Brien & Associates in Chicago since 2012, on Saturday became the “undisputed” female welterweight world champion boxer. McCaskill, who overcame childhood homelessness, unseated Cecilia Brækhus, the previous welterweight champion.~SR
The Security Traders Association (STA) is holding a webinar Wed, Aug 26, 2020 from 10:00 AM – 11:00 AM CDT with Jim Toes, the STA CEO, and Shane Swanson, senior analyst at Greenwich Associates. It will be a market structure discussion and update on the STA’s decision to move its October market structure conference to a fully virtual event. You can go here to register. If you can’t attend, you can register anyway and you will receive a recording of the webinar.~SR
Another warning from 1918 Spanish flu for COVID-19: ‘Survival does not mean that individuals fully recovered’; ‘We may never know the true mortality consequences of 1918 because of incomplete or inaccurate record keeping, issues that also undermine our ability to quantify the impact of COVID-19’
Quentin Fottrell – MarketWatch
There’s still so much we don’t know. The 2020 coronavirus and 1918 Spanish influenza are two highly contagious respiratory diseases that spread around the world in months, and lacked a vaccine when they first occurred. People couldn’t understand why they affected some people more than others. For the 1918 flu, healthier, younger people were most at risk. In 2020, it’s older people with preexisting conditions.
*****Good data is always an issue.~JJL
On A ‘Flight To Nowhere,’ Airlines Innovate Against Travel Bans
Michele Robson – Forbes
With a large proportion of countries around the world not allowing any international flights except repatriation, airlines have been forced to come up with new ways to generate revenue. Although some travelers remain too scared to fly and people face travel shaming if they do, there are a growing number of people desperate to take to the skies again. This has generated a new trend for flights to “nowhere.” It originally started with Taiwan’s Civil Aviation Administration organizing a flight that never actually left the ground. The idea was to recreate the feeling of travel and lift people’s spirits. The trip started like any normal one with passengers required to check-in, get their boarding passes, and go through the usual security and immigration checks. Onboard food and drinks were served alongside a quiz and a water salute outside the airport fire engines.
*****There are drugs that can do the same thing for you.~JJL
Get Ready for a Teacher Shortage Like We’ve Never Seen Before; If we force teachers to return to schools during an out-of-control pandemic, I don’t know how many will stick around.
Kelly Treleaven – NY Times
Usually on the first day back to work after summer break, there’s this buzzing, buoyant energy in the air. My school is a small school-within-a-school designated to serve gifted children, so there are only 16 teachers and staff members. We typically meet in a colleague’s tidy classroom, filled with natural light and the earthy smell of coffee.
*****My local school district had to delay in-person classes by three weeks because they did not have enough teachers. So many teachers have opted out because of health concerns that they could not start on time. They will start with online classes next week, then move to in-person classes or a hybrid approach, the second week of September. This assumes a lot though.~JJL
Monday’s Top Three
Our top story Monday was JLN’s CFTC Dismisses Its Case Against Jitesh Thakkar, Settles With Edge Financial from Thom Thompson. Second was The Hedge Fund Interview That Made Me Forget About the Pandemic, from Bloomberg. Third was Southeast Asia Detects Mutated Virus Strain Sweeping the World, also from Bloomberg.
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What Happens to the Markets If There’s a Vaccine? A return to normal—when it comes—ought to be a boon for investors, but strategists see risks around the corner.
Claire Ballentine, Katherine Greifeld, Gregor Stuart Hunter, Eric Lam – Bloomberg
Trying to game out anything in the 2020 financial market can be a humbling experience. Massive fiscal and monetary stimulus has been doing battle with a historic recession and a pandemic. Would you have expected a crash? You got one in February and March. And then came a rally right on its heels, bringing stocks back near record highs. So nothing is obvious. Still, on the list of events with the potential to reorder sentiment on a dime, one prospective catalyst is on almost every forecaster’s mind: the discovery of a vaccine for the Covid-19 coronavirus. If and when one comes, it ought to be a massive boost for investors, right? Wall Street pros answer with an emphatic “Maybe.” Here are three scenarios gleaned from money managers and strategists:
Critics pile on an S.E.C. proposal to limit investor disclosure
In the weeks since the U.S. Securities and Exchange Commission announced plans to effectively reduce institutional investors’ public disclosure of their holdings, more than 1,500 people have submitted comments to the commission. The overwhelming majority are opposed to the proposal.
Under Trump, SEC Enforcement Of Insider Trading Dropped To Lowest Point In Decades
Tom Dreisbach – NPR
The government agency responsible for policing Wall Street brought the fewest number of insider trading cases in decades, according to the most recent available data. That decline came just before the COVID-19 pandemic hit. The Securities and Exchange Commission now warns that the pandemic has created wild swings in the market and more opportunities for insider trading.
Bank of Japan Refuses Trader Requests to Work From Home
Takashi Nakamichi and Takako Taniguchi – Bloomberg
Central bank is concerned off-site access risks cybersecurity; Highlights Japan’s barriers to remote work during the pandemic
The new normal of remote work has yet to reach the traders who deal with the Bank of Japan. Japan’s central bank doesn’t allow home computers to connect to its network for conducting asset purchases and other market transactions, raising concerns at financial firms as coronavirus cases in Tokyo surge. At least three have asked the BOJ whether traders can participate in its operations from outside the office, only to be met with a refusal, people familiar with the matter said.
Last Man Standing Falls: Minneapolis Grain Exchange Sold
Mary Kennedy – Progressive Farmer
The last independent grain exchange in the U.S., the Minneapolis Grain Exchange, was acquired by Miami International Holdings, according to a news release on Aug. 14. (DTN photo on left by Mary Kennedy; photo on right courtesy of MGEX) Miami International Holdings (MIH), the parent holding company of the MIAX Exchange Group, and the Minneapolis Grain Exchange (MGEX), a Designated Contract Market (DCM) and Derivatives Clearing Organization (DCO), announced on Aug. 14 in a new release that they have entered into a definitive agreement and plan of merger.
Companies Strain to Outdo Each Other with Work-from-Home Perks (Think Ukuleles); Five months into remote work brought on by the pandemic, employers come up with new ways to keep workers engaged
Jennifer Levitz – WSJ
Nimbus Therapeutics used to cater lunch for its entire staff three times a week at its Cambridge, Mass., headquarters—a hip place where the taxidermied office moose has its own Instagram account. Employees got plenty of branded swag, and enjoyed perks such as company-paid spa treatments.
Robinhood Now Valued at $11.2 Billion With New Fund Backing
Sonali Basak – Bloomberg
D1 Capital invests $200 million into online trading company; Robinhood was most recently valued at $8.6 billion in July
Robinhood Financial raised new funding at a valuation of about $11.2 billion, as Dan Sundheim’s D1 Capital Partners poured $200 million into the online trading company. The seven-year-old firm was most recently valued at $8.6 billion during its July funding round, before it posted record trading figures for June. It revealed daily average revenue trades of 4.31 million for the month, greater than any of its publicly traded rivals. The latest investment and valuation were announced by Robinhood in a blog post on its website.
World’s Biggest Wealth Fund Wants ‘Clarification’ on New CEO
Mikael Holter – Bloomberg
Norway’s wealth fund lost $21 billion in first half of 2020; Loss comes amid turbulent year marked by CEO succession drama
The world’s biggest wealth fund said it’s eager to get clarity on who will lead it, after a botched recruitment process to find a new chief executive triggered a political storm that’s still playing out.
Warren Buffett’s trades look like everyone else’s, for once; Berkshire Hathaway needs to do more than sell banks and buy gold to regain glory days
Robert Armstrong – FT
It is a bit alarming to discover that Warren Buffett has been making the same trades as everyone else. Mr Buffett built his reputation on the financial equivalent of running into burning buildings. One of the most well-worn items in his aphorism collection: “Be fearful when others are greedy, and greedy when they are fearful.”
Norway’s oil fund fears market disconnect from real economy; Concerns raised after $1tn sovereign wealth fund records second-best quarter
Richard Milne – FT
Norway’s $1tn oil fund has recorded the second-best quarter in its history because of a strong recovery in stock markets but has said it is worried about the disconnect between markets and the real economy.
Covid-19 Is Creating a Wave of Heart Disease; Emerging data show that some of the coronavirus’s most potent damage is inflicted on the heart.
Haider Warraich – NY Times
SARS-CoV-2, the virus that causes Covid-19, was initially thought to primarily impact the lungs — SARS stands for “severe acute respiratory syndrome.” Now we know there is barely a part of the body this infection spares. And emerging data show that some of the virus’s most potent damage is inflicted on the heart.
The Recession Is About to Slam Cities. Not Just the Blue-State Ones; Those with budgets that rely heavily on tourism, sales taxes or direct state assistance will face particular distress.
Emily Badger and Quoctrung Bui – NY Times
The coronavirus recession will erode city budgets in many insidious ways. It will slash the casino revenues that Detroit relies on. It will squeeze the state aid that is a lifeblood to Rochester and Buffalo in upstate New York. It will cut the sales tax revenue in New Orleans and Baton Rouge, where a healthy government depends on people buying things.
German Uptick Fuels Fears About European Virus Resurgence
Andrew Blackman, Geraldine Amiel, and Wojciech Moskwa – Bloomberg
Some countries are tightening restrictions on movement again; Summer partying and travel threaten to spread the disease
Germany recorded the highest number of new coronavirus cases in nearly four months, fueling fears about a resurgence of infections across Europe. Officials are already tightening restrictions on movement again in an effort to prevent summer partying and travel from spreading the disease. Spain and Italy have shut nightclubs and Greece limited hours for bars and restaurants to try to avoid more drastic measures after the holiday season winds down.
Depression Levels Doubled in Britain as Pandemic Swept Country
Eddie Spence – Bloomberg
The percentage of people suffering with depression in Great Britain has doubled since the coronavirus forced a lockdown of the country in March. Almost one in five adults were likely to be experiencing depression in June compared with before the pandemic, with one in three young adults suffering moderate to severe symptoms, according to a study by the Office for National Statistics.
Covid-Era Tech Grads Launch Careers From Parents’ Homes; The coronavirus pandemic has created a uniquely challenging environment for entry-level workers
Shelly Banjo, Priya Anand, and Olivia Carville – Bloomberg
Eric Lee has dreamed of working for Microsoft Corp. for as long as he can remember, and was stoked this spring to land a job at the tech giant right out of college. But instead of traveling across the country to start his career at Microsoft headquarters in Redmond, Wash., Lee joined the workforce this month from his family’s house in the suburbs of Boston.
Carlyle staff told to avoid public transport on London office return; Private equity group expects employees to walk or cycle if possible as HQ reopens after shutdown
Owen Walker and Kaye Wiggins – FT
Carlyle has told its employees to avoid public transport on their commute to work because of concerns about coronavirus, as the $221bn private equity manager prepares to reopen its London office next month.
Dido Harding to lead new pandemic agency for England; Head of test-and-trace programme to chair body formed when government scraps Public Health England
Laura Hughes – FT
The head of the government’s coronavirus “test and trace” programme in England will be given the job of running an “agile” new body responsible for dealing with pandemics.
UK faces white-collar jobs crisis as pandemic ends decades of job security; Thousands in middle management and professional roles set to be hit after initial blue-collar cuts
Daniel Thomas and Delphine Strauss – FT
“Every time I deliver a parcel, I wonder why I went to university, worked for three blue-chip companies then ran my own successful business only to be crushed by Covid,” said Ade Smith, who is now working as a delivery driver in his 50s.
Empire State Building Reflects New York’s Deepening Real-Estate Woes; Iconic tower looks vulnerable to losing tenants as companies embrace remote work or cheaper offices outside city centers
Konrad Putzier – WSJ
The Empire State Building, New York’s most famous office skyscraper, has come to reflect much of what ails the city and its commercial real estate during the Covid-19 pandemic.
Fauci says Covid-19’s long-term effects, especially in young people, are “really troublesome”
Amanda Watts – CNN
The top infectious disease doctor in the US, Dr. Anthony Fauci, said Monday, “We’d better be careful when we say ‘Young people who don’t wind up in the hospital are fine, let them get infected, it’s OK.’ No, it’s not OK.”
Exchanges, OTC and Clearing
TMX Group names new chief executive officer; John McKenzie will assume the role of chief executive officer at TMX Group after serving 20 years at the company.
Annabel Smith – The Trade
Toronto-based stock exchange TMX Group has appointed its former chief financial officer, John McKenzie, as its new chief executive officer and member of the board of directors. McKenzie has been serving as interim CEO since January this year when the company announced its Lou Eccleston would be stepping down from the position early, following sexual harassment allegations.
ICE Enhances NYSE FANG+ Index Futures; Reduces notional value of the contract to one tenth of the current size
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of mortgage technology, data and listing services, today announced it plans to enhance the NYSE FANG+ Index futures by reducing the contract size to better match the needs of a wide range of investors.
Intercontinental Exchange Prices $6,500,000,000 in Senior Notes
Intercontinental Exchange (NYSE: ICE), a leading operator of global exchanges and clearing houses and provider of data and listings services, announced today that it priced an underwritten public offering of $6.5 billion in new senior notes.
Dubai Financial Market Closed For Hijri New Year 1442 On Sunday 23 August 2020
On the occasion of Hijri New Year 1442, DFM will be closed on Sunday 23 August 2020 and work shall resume on Monday 24 August 2020.
Amman Stock Exchange: Thursday Is A Public Holiday To Celebrate Lunar New Year
According to the announcement issued by the Prime Minister on the occasion of the lunar New Year (Islamic Hijri Calendar), the Amman Stock Exchange (ASE) will be closed on Thursday the 20th of August, 2020. The ASE will resume its work on Sunday the 23th of August, 2020.
Ex-Wirecard CEO Met Senior Bundesbank Official in 2019
Birgit Jennen and Nicholas Comfort – Bloomberg
Former Wirecard AG Chief Executive Officer Markus Braun met with a senior Bundesbank official last year in the midst of allegations of accounting irregularities at the German payments company.
Breaking Down Small Business and Retail’s Shift to Fintech
Sarah Austin – Entrepreneur
Tim Draper is a trendspotter most famously known as founder of Draper Fisher Jurvetson, where he lead their investment in Skype. He’s also known as a thought leader for his book, The Startup Hero, and Draper University, his higher education institution. Finally, he even stars in his own television show, Meet The Drapers.
American Express acquires fintech company Kabbage
Natalie Gagliordi – ZDNet
American Express said Monday that it’s acquiring the key assets of financial technology company Kabbage. Under the deal, American Express will take ownership of Kabbage’s full suite of fintech products, along with its data platform and intellectual property. Kabbage’s team will also join American Express.
Fintech Payments Company FXPress to Acquire Avila House
Celeste Skinner – Finance Magnates
Fintech payment services company FXPress Payment Services Limited announced this Tuesday that it has entered into an agreement to acquire Avila House Limited, subject to regulatory approval.
Avila House is a licensed Small Electronic Money Institutional. Under the agreement announced today, FXPress customers will be able to receive and hold client funds in multi-currency accounts.
Barclays launches NDF algorithms for BARX trading platform; The non-deliverable forward algorithms (NDFs) will be the latest addition made by Barclays to the cross-asset electronic FX trading platform, the BARX Gator algorithm suite.
Annabel Smith – The Trade
Barclays’ electronic order execution channel, the BARX Gator algorithm suite, will now support NDF algorithms in response to strong client demand.
Robinhood announces $200 million in new funding at $11.2 billion valuation
Michael McSweeney – The Block
Brokerage app company Robinhood has raised $200 million in a Series G funding round, adding D1 Capital Partners as a new investor. Robinhood said in a blog post that the new funding elevates its valuation to $11.2 billion. The move comes roughly two months after Robinhood raised $320 million at an $8.6 billion valuation during a round that added TSG Consumer Partners and IVP as new investors. “With this funding, we’ll continue to invest in improving our core product and customer experience,” the firm said in a statement.
‘Link Marines’ Are Making an Obscure Cryptocurrency Red Hot
Olga Kharif – Bloomberg
While Bitcoin enjoys a resurgence, this year’s breakout cryptocurrency is actually something called Chainlink that has grown to become the world’s fifth-biggest coin by market value. Chainlink token’s price has increased more than ninefold since the start of the year year to about $6.6 billion. It’s now bigger than Bitcoin Cash, Litecoin or Binance Coin.
Akon Is Ready To Build A $6 Billion Cryptocurrency City
Kori Hale – Forbes
Akon City, a “futuristic cryptocurrency themed city” founded by music mogul Akon, is ready to begin construction in Senegal, after securing $4 billion from investors. The city will exclusively use the “Akoin” digital currency and plans to have parks, universities, schools, a stadium, hotels, and more. It will be the de facto currency in a Senegalese city he’s constructing on land donated by the government. Will cryptocurrencies become the tool that puts African nations on the path to overcoming their economic challenges?
Grayscale announces Bitcoin Cash and Litecoin trusts will now be traded publicly
Saniya More – The Block
Digital currency asset manager Grayscale Investments announced Monday that its Bitcoin Cash Trust and Litecoin Trust are now DTC-eligible. This means any investor with access to U.S. securities can access Bitcoin Cash and Litecoin without having to buy and store them directly. According to the announcement, shares of both trusts will be available for trading on over-the-counter (OTC) markets under the symbols BCGG (Bitcoin Cash) and LTCN (Litecoin).
Hester Peirce sworn in as SEC commissioner for second term
Michael McSweeney – The Block
Hester Peirce, the crypto-friendly commissioner of the Securities and Exchange Commission (SEC), was sworn into her second term on Monday. The SEC announced the move, which came after the U.S. Senate confirmed Peirce alongside commissioner Caroline Crenshaw, on August 6. Peirce was formally nominated to serve a second term — which lasts until June 2025 — in June by U.S. President Donald Trump.
Coinbase explains how it evaluates ERC-20 tokens for listing
Yogita Khatri – The Block
Crypto exchange Coinbase has explained what technical factors it looks into before deciding to list an ERC-20 token on its trading platforms. In a blog post published Monday, Nadir Akhtar, a blockchain security engineer at Coinbase, listed four qualities that each ERC-20 token should possess: Verified source code, industry-standard library use, limited scope for privileged roles, and simple and modular design. Firstly, the token’s source code should be verified, said Akhtar. “This is the most important step to getting a token listed.”
Top Bitcoin Mining Pools See 15% Hashrate Drop Amid Continuous Rainstorms in China
Wolfie Zhao – Coindesk
Major Chinese bitcoin mining pools are each seeing daily hashrate drops of between 10% and 20% following continuous rainstorms in Sichuan. China’s southwestern Sichuan province, a mountainous region that is estimated to have over 50% of Bitcoin network’s total computing power, has been hit by heavy rainstorms since last week, which peaked over the last two days. The heavy rainstorms have caused electricity outages in parts of the region as hydro-plants stop generating power to help discharge the floods. Some counties are also experiencing telecommunication and internet breakdowns, said Kevin Pan, CEO and co-founder of PoolIn.
Binance Charity Pledges $20K to Beirut Explosion Relief Efforts
Sebastian Sinclair – Coindesk
Binance’s charity arm is donating to the victims of the Aug. 4 explosion that rocked the city of Beirut, Lebanon’s capital. Binance’s Beirut Relief Fund campaign has committed $20,000 in donations to the victims of a devastating explosion that claimed the lives of over 150 people and injured 5,000 more. Binance will donate $10,000 directly to Beirut victims with a further dollar-per-dollar amount in crypto matched for each donation it receives, up to a total of $10,000. According to a company blog post on Tuesday, Binance Charity lead Helen Hai said the organization would “work closely with local partners to help improve conditions and livelihoods.”
Barstool’s Dave Portnoy: ‘In crypto you can pump and dump all day long’
Aislinn Keely – The Block
Barstool president Dave Portnoy continued streaming his trading activity after buying bitcoin and LINK last week with the help of Gemini co-founders Tyler and Cameron Winklevoss. Today, BlockFi sponsored Portnoy’s stream, during which he spoke about further steps into crypto and called on his followers to pump the Orchid token. “The thing I like about pump and dumps in crypto is it’s encouraged,” he said on the stream.
Blockchain.com raises interest rate on bitcoin and stablecoins as hunt for yield among traders soars
Frank Chaparro – The Block
Blockchain.com has added nearly $100 million in customer deposits since launching its interest-bearing retail accounts in June, and now it is looking to offer those clients an even higher rate. The firm told The Block that it has raised the annual interest rate offered for deposited bitcoin from 4.5% to 6%, while the rate for stablecoins PAX and USDT has been increased from the current 7% to 12%. The move puts the company ahead of market leaders BlockFi and Celsius, which offer an interest rate of 8.6% and 8.69%, respectively, for select stablecoins. Blockchain.com began offering high-yield interest account services in June. It also lends crypto to retail and institutional clients.
Huobi launches DeFi-focused consortium with MakerDAO, Compound and more
Saniya More – The Block
Huobi DeFi Labs, Huobi Group’s new research and incubation platform focused on decentralized finance, has launched a new consortium effort. Described as an “international consortium of centralized and decentralized financial service providers and platforms,” the initiative was spearheaded in collaboration with MakerDAO, Compound, Nest and dYdX. “DeFi is the first attempt in human history to build a modern financial system without credit risk, and it is unleashing the power of free economy at global scale,” said Huobi Chief Investment Officer Sharlyn Wu.
Trump Says He’ll Seek a Third Term Because ‘They Spied On Me’
Peter Wade – Rolling Stone
With the political world focused on the Democratic convention Monday night, President Trump looked to steal some of the limelight by saying that he will seek a third term if he wins reelection. During a rally in Wisconsin, the president lied to a cheering crowd, telling them that he deserves eight additional years in office because, he falsely claimed, his campaign was spied on in 2016—an assertion his own FBI refuted in a detailed report.
Oracle enters race to buy TikTok’s US operations; Tech group is working with investors in effort to outbid Microsoft after Trump divestment order
James Fontanella-Khan and Miles Kruppa – FT
Oracle has entered the race to acquire TikTok, the popular Chinese-owned short video app that President Donald Trump has vowed to shut down unless it is taken over by a US company by mid-November, people briefed about the matter have said.
Oil traders should pay attention to Biden’s little green Corvette; Democrat is following Musk playbook to break petrol’s stranglehold on the car market
David Sheppard – FT
Joe Biden wants to be the greenest president in US history. He also owns a gas-guzzling 1967 Corvette Stingray and is quite happy for everyone to know about it.
Most US voters fear reopening of schools, FT poll shows; FT-Peterson survey reveals rising pessimism over pandemic and economic rebound
Lauren Fedor and Christine Zhang – FT
Nearly two-thirds of Americans fear it will be unsafe to send children back to school this year, according to a new poll for the Financial Times that showed deepening pessimism about the course of the coronavirus pandemic in the US.
Trump Pledges Tax Credits, Tariffs to Redirect Jobs From China
Brendan Murray – Bloomberg
‘We will end our reliance on China,’ he says in Minnesota; India and Japan are also offering fiscal aid to firms
President Donald Trump said he’ll punish American companies that move jobs abroad and reward firms with tax breaks for shifting work from China to the U.S., proposals aimed at hastening the decoupling of the world’s largest economies.
Trump Claims COVID-19 Is God Testing Him After He Built ‘Greatest Economy In History’; The president described boasting to God about his economic successes before the coronavirus pandemic.
Carol Kuruvilla – Huffpost
President Donald Trump claimed Monday that the coronavirus pandemic that has killed over 170,000 Americans is God’s way of testing him. While boasting about the “economic miracle” he claims to have achieved before COVID-19 disrupted life across America, the president described having a conversation with God about his track record as president.
What is QAnon? What We Know About the Conspiracy Theory; A right-wing group that believes President Trump is under assault by Satan worshippers has made its way from social media forums into politics
Eleanore Park – WSJ
The conspiracy theory group known as QAnon has grown in popularity in recent months. It has spread from fringe message boards to mainstream platforms, and it has increasingly become a political issue. Here is what we know about QAnon, its conspiracy theory and how it started.
ASIC warns Indigenous consumers about scams
The Australian Securities and Investments Commission, as one of the agencies responsible for the National Indigenous Consumer Strategy (NICS), urges Indigenous consumers to be wary of scams, including anyone calling them out of the blue asking for personal details or offering investment opportunities.
Free Online Investor Forum August 26, 2020: Protecting Your Finances in the Age of COVID-19
Join FINRA, and special guests U.S. Senator Catherine Cortez Masto and Nevada Securities Administrator Erin Houston, as we discuss key considerations for investing and protecting yourself from fraud during this pandemic.
Free Online Investor Forum August 25, 2020: Protecting your Finances in the Age of COVID-19
Join FINRA, special guests U.S. Representative French Hill and Arkansas Securities Commissioner Eric Munson, as we discuss key considerations for investing and protecting yourself from fraud during this pandemic.
FINRA Requests Comment on the Practice of Pennying in the Corporate Bond Market; Comment Period Expires: October 16, 2020
FINRA requests comment on the practice of internalizing customer trades in the corporate bond market after obtaining auction responses, commonly known as “pennying.” In particular, pennying involves a dealer, after receiving a customer order, initiating a bid or offer wanted auction process on behalf of a customer, reviewing the auction responses, and then executing the customer order itself at a price that either matches or slightly improves the best priced auction response. As discussed below, FINRA performed a review of corporate bond auctions conducted by retail firms on electronic trading platforms. FINRA found in the review that firms internalized executions at varying rates after initiating auctions, and that these internalized executions offered varying amounts of price improvement. Consistent with a recommendation from the Securities and Exchange Commission’s (SEC) Fixed Income Market Structure Advisory Committee (FIMSAC) and a similar request for comment published by the Municipal Securities Rulemaking Board (MSRB), FINRA is soliciting comment on when such executions reflect a practice of pennying, how pennying impacts market quality and whether further regulatory action would be appropriate.
FINRA Announces Nomination Process to Fill Upcoming Vacancies on the National Adjudicatory Council; Petitions for Candidacy Due: October 1, 2020
The purpose of this Election Notice is to notify members of an upcoming election to fill two large firm seats and one small firm seat on the National Adjudicatory Council (NAC), and to announce the FINRA Nominating & Governance Committee (Nominating Committee) nominees for these vacancies. Eligible individuals not nominated by the Nominating Committee who obtain the requisite number of valid petitions may be included as candidates on the ballot by following the petition procedures described in this Election Notice.
Caroline A. Crenshaw and Hester M. Peirce Sworn-In As SEC Commissioners
The Securities and Exchange Commission today announced that Caroline A. Crenshaw and Hester M. Peirce have been sworn into office as SEC commissioners.
Effective date of amendments to the risk disclosure statement for security futures contracts
Amendments to NFA’s Interpretive Notice entitled NFA Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures Contracts became effective on August 14, 2020.
Investing and Trading
Currency Markets Warn of Turbulence Ahead
Jill Ward and Anil Varma – Bloomberg
U.S. dollar is likely to be an outsized driver of risk: LGIM; Correlation between currency, stock volatility is negative
The U.S. dollar is driving a wedge between volatility expectations for global currencies and stocks. The greenback’s plunge last month jolted currencies so profoundly that a gauge of expected swings in the market is no longer moving in tandem with a similar measure for U.S. equities. So much so that the 40-day correlation between the JPMorgan Global FX Volatility Index and the VIX Index of U.S. stock swings fell below zero this month to the lowest since 2009.
Top-Heavy Stock Indexes Are Nothing to Fear; It’s not rare for a small group of equities such as Apple, Microsoft and Amazon.com to account for a large percentage of the S&P 500.
Barry Ritholtz – Bloomberg
None of the criticisms levied over the years against indexing has undercut the primary advantages of passive investing: It’s cheap, simple and avoids the futility of stock picking. Still, you have to give the opponents credit for persistance. They keep trying to convince investors that it is a poor approach to asset management.
ETFs set to usurp active funds in world of ethical investing; Shift to passive would be a body blow to traditional ESG investment approach
Steve Johnson – FT
Exchange traded funds and other passive vehicles are set to usurp active managers as the dominant ethical investing approach, research suggests. The shift would be a body blow to active investment houses hoping their potentially greater ability to engage with investee companies would allow them to hang on to assets being invested according to good environmental, social and governance principles.
Investors have never been more bullish on the euro; US data show record demand for futures, raising concerns the rally will soon fade
Eva Szalay – FT
Positive bets on the euro have hit an all-time high, prompting some caution over whether the currency’s rapid rally could soon run out of fuel.
Poshmark CEO: The rise of resale isn’t just a fad
Nikola Badger – CNN
US stocks are on the cusp of a remarkable feat: setting new all-time highs during the middle of a pandemic. Yet there are signs that at least some leaders of Corporate America are skeptical about the sustainability of a mega rally that has catapulted the S&P 500 by 51% since the March 23 lows.
Worried About Inflation? Bonds and Gold Don’t Care; What matters to markets is what Jerome Powell does, and what matters to the Fed is progress in fighting the pandemic.
John Authers – Bloomberg
Back in the city after a week in which I paid as little heed to the markets as I could, what exactly have I missed? The most startling item of economic news (a much higher U.S. inflation reading than anyone had expected) and the most startling market event (a sudden 10.2% fall for gold) tended to counteract each other. Isn’t gold supposed to benefit from higher inflation? Meanwhile, the U.S. stock market remains agonizingly close to setting an all-time high, but comically unable to get there, as yet.
Environmental, Social and Corporate Governance
Send bond covenants into battle against climate change; As demand for catastrophe protection grows, so should the green requirements of issuers
Bianca Taylor – FT
The writer is a Public Voices fellow of the OpEd Project and the Yale Program on Climate Change Communication Four powerful men leading the largest technology companies in the world sat before Congress last month for a six-hour grilling on how they chased and protected their dominance. In a not-so-distant future, a similar hearing could be held with the heads of insurance companies about how much they knew about climate change, and how little they did to encourage solutions.
Californians endure dark, hot summer as green energy is sapped; Warning of rolling blackouts for millions as heatwave overwhelms grid
Gregory Meyer and Richard Waters – FT
Millions of Californians have been warned their lights and air conditioning units could go out this week as the state plans rolling blackouts to deal with a record heatwave that has pushed the power grid to the limit.
Covid-19 bonds drive ‘sustainable’ debt as green issuance fades; Market for ESG bonds heads for record size this year despite slower momentum for green debt
Camilla Hodgson – FT
Heavy issuance of bonds aimed at tackling the effects of the pandemic could push the size of the “sustainable” debt market to a new record this year, according to Moody’s, even as the frenzy for green bonds cools.
California Blackouts a Warning for States Ramping Up Green Power; State has struggled to keep lights on during heat wave that has exposed its difficulties matching power demand with supply
Katherine Blunt – WSJ
Millions of Californians could lose power in coming days, the state’s grid operator warned Monday, as it continues to struggle with inadequate electricity supplies as many people have been forced indoors to ride out a crippling heat wave during the coronavirus pandemic.
Sajid Javid returns to JPMorgan; Former UK chancellor takes up senior advisory role at bank where he started career
Owen Walker and Stephen Morris – FT
Sajid Javid has taken up a role at JPMorgan, the bank where he started his career, six months after quitting as UK chancellor. Mr Javid has joined the US lender’s European advisory council, which will offer the group counsel on its operations in the region after Brexit, according to a memo to staff seen by the Financial Times.
Time to plug the public market ‘listing gap’; Institutional funds should fix the world they know, not muscle in on tech start-ups
John Thornhill – FT
SoftBank has achieved its goal of becoming an investment pioneer, just not in the way that its founder, Masayoshi Son, intended.
Warren Buffett confuses Wall Street as he buys gold, sells Goldman Sachs
Thornton McEnery – NY Post
Warren Buffett has given up his long-held conviction against buying gold — and he’s meanwhile getting out of Goldman Sachs. The totemic tycoon revealed in filings late last week that he has scooped up more than 20 million shares of mining giant Barrick Gold Corp. even as he unloaded nearly all of his nearly 2 million shares in Goldman Sachs.
A Plan for Africa’s Biggest IPO in the U.S.
Swetha Gopinath – Bloomberg
Timing, number of shares yet to be determined, IHS says; IPO could be valued at $7 billion, Bloomberg reported in Feb.
Wireless towers operator IHS Holding Ltd. is exploring a potential initial public offering, shareholder Wendel SE said Tuesday, in a deal that could be the biggest listing ever by an African company in the U.S.
High Yields Can’t Stop Global Fund Exodus From Indian Bonds
Kartik Goyal – Bloomberg
Indian bonds face most outflows among EM Asia FX in 2020; Foreigners’ Indian bond holdings linger near record lows
Global funds used to clamor for more access to India’s debt markets. The high-yielding bonds are now the least popular in Asia as the nation struggles to contain the coronavirus pandemic.
India is coming around to the idea of foreigners owning its debt; Investors willing to wait for reforms could find rich pickings, advisers say
Benjamin Parkin – FT
India has long kept foreign investors in its sovereign bonds at arm’s length, wary of the volatility and currency turbulence that has befallen other, more welcoming, emerging markets.
America will find it hard to break its frack habit; Unlike shareholders, management teams of shale oil companies have made money
Derek Brower – FT
America’s shale sector grew famous in the past decade for two big achievements: spectacular production growth and a stunning ability to destroy shareholder value.
Retail trading app Robinhood’s value tops $11bn on new fundraising; US platform benefits from a surge in new customers during pandemic lockdown
Richard Henderson and Miles Kruppa – FT
Retail trading app Robinhood has raised new equity that gives it a valuation of more than $11bn, up by nearly one-third from a previous injection of funds just one month ago, as the privately-owned platform benefits from a surge in activity through the coronavirus pandemic.
Saudi Arabia pours $4.7bn into State Street ETFs; Move comes after similar decision by US Federal Reserve, which has $8.7bn in ETFs
Joe Morris – FT
Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, poured nearly $4.7bn into three State Street Global Advisors exchange traded funds during the second quarter.
Revival of Brazil’s Corporate-Bond Market Lures Foreign Investors Hunting for Yield; Local corporations’ dollar-denominated bond issues totaled $3.7 billion in July, up 48% from a year earlier
Paulo Trevisani and Jeffrey T. Lewis – WSJ
Foreign investors are flocking to the relatively high yields offered by big Brazilian corporations that are issuing debt to shore up their balance sheets in the midst of the coronavirus pandemic.
Brexit: UK hopeful of EU trade deal next month, says No 10
The UK still believes it can agree a post-Brexit trade deal with the EU next month, according to Downing Street. The PM’s spokesman said UK negotiators would “continue to plug the gaps” when talks enter their seventh round in Brussels on Tuesday. The two sides remain divided over competition rules, fishing rights and how a deal would be enforced. The UK has ruled out extending the December deadline to reach an agreement. This week’s talks are the last scheduled negotiating round ahead of the autumn, although both sides have previously said talks would continue in September.
Sterling comes close to 5-month high as Brexit talks restart
Elizabeth Howcroft – Reuters
The pound approached a five-month high versus the dollar on Tuesday, driven by weakness in the U.S. currency, but analysts remained cautious about the outlook for sterling as a new round of Brexit talks began. The dollar index hit new lows on Tuesday, facing the triple woes of diminishing yields, weak U.S. economic data and a lessening of demand for safe havens. Meanwhile, traders are braced for a fresh round of sterling volatility as talks between Britain and the European Union restart.
Animals farmed: China’s pig demands, Brexit lamb cull fears and KFC praised
Tom Levitt – The Guardian
China has made its largest-ever daily purchase of US corn, despite escalating tensions over trade between the two countries. Analysts say US farm products, including corn, are a key ingredient for animal feed as China’s pig population recovers from the deadly African swine fever. Pig production in Mexico is on the rise as the country increases exports to China, Japan and South Korea. There has also been an almost 50% increase in pork exports from Brazil, with China the main destination. JBS is reported to be hiring more than 5,000 more workers in Brazil to increase production in its meat plants for export markets.