Hits & Takes
John Lothian & JLN Staff
CME Group and FTSE Russell are putting on a webinar TODAY at 11 a.m. ET titled, “Russell U.S. recon: Mitigating risk with derivatives.” If you are invested in small cap stocks, you will want to know more about the annual Russell Reconstitution and the changes that are captured during this process, including shifts in market capitalization, sector composition, company rankings, and style orientation. During the reconstitution, how can you mitigate your exposure risk? Find out from experts from FTSE Russell, Cboe Global Markets and the CME Group. They include:
Kevin Davitt, senior instructor, Cboe Options Institute; Giovanni Vicioso, senior director, equity products, CME Group; Mark Barnes, PhD, head of investment research, Americas, FTSE Russell; and the moderator, Catherine Yoshimoto, director, product management, FTSE Russell.
Speaking of the Russell 2000, it was recently the focus of an episode of Anthony Crudele’s Futures Radio podcast. Sean Smith from FTSE Russell, Rick Rosenthal from CBOE and Russell Rhoads from EQ Derivatives spoke about the Russell 2000 futures and options products with the impeccably coiffed Crudele. — YouTube
In the Bad News section (isn’t that every section some days?), we have the story from the Wall Street Journal, “Covid-19 Deaths This Year Have Already Eclipsed 2020’s Toll; As wealthy nations vaccinate, growing death tally underscores worsening divide between rich and poor countries.” This is a grim reminder we are still in this pandemic and NOT all in this together. We all need to be vaccinated. — WSJ
In the Miscellaneous section of JLN at the bottom of the newsletter we have some hedge fund related real estate news that involves New York and Palm Beach, but does not involve Citadel’s Ken Griffin. It does involve the Cleveland Indians and New York Mets baseball teams though. The Mets’ new owner Steve Cohen finally dumped sold his New York City condo for more than he asked, but only after dropping his asking price from $113 million in 2013 to $29.5 million in February of this year. Also, WorldQuant hedge fund manager Igor Tulchinsky bought the North Palm Beach mansion of Jeffrey Jacobs, scion of the Cleveland real-estate family that formerly owned the Cleveland Indians. Mr. Tulchinsky paid $39.5 million for the Florida residence less than two months after dropping another $33 million on an apartment in Manhattan.
Lake Mead, the largest reservoir of water, the one at the iconic Hoover Dam in the U.S., fell to levels not seen since 1937. Bloomberg reported that three-fourths of the American West is in drought conditions, so this is not good news. — Bloomberg
The New York Times has an article titled, “How to Reopen Offices Safely; Flush the taps, focus on indoor air quality and consider getting creative about staff schedules.” This is probably a timely story to read this week as many offices are reopening. — NY Times
There were no new donations to the JLN MarketsWiki Education GoFundMe campaign yesterday. Support our efforts to preserve industry history by giving to our GoFundMe campaign.
Have a great day and stay safe and treat people the same way you want to be treated: with respect, equality and justice.~JJL
Chuck Mackie has a follow-up column at Medium, “Three takeaways — and final thoughts” from the final day of #cryptoconnection2021 from Tabb Forum and Global DCA, including: Sponsors in the spotlight, a search for the “white whale” of crypto markets and a look at some of the bizarro world that can be crypto. You can read it here.~SR
Locally grown: Chicago-based Small Exchange announced yesterday that it plans to list Small Cannabis futures, a product that will offer access to 21 related stocks, on June 21. Details on Small Cannabis S420 futures are available here. ~SC
G7 leaders to pledge 1bn Covid-19 vaccine doses for poorer countries; Initiative to be unveiled at Cornwall summit to address criticism wealthy nations have taken bulk of supplies
George Parker and Jasmine Cameron-Chileshe – FT
Leaders of the G7 economies convening in the UK will announce a pledge to provide 1bn coronavirus vaccine doses to poorer countries as part of a plan to “vaccinate the world” by the end of 2022.
*****We are all in this together. We must all get out of it together.~JJL
How the FBI Got Colonial Pipeline’s Ransom Money Back; Seizure of more than half of the company’s payment cuts against crypto’s reputation as an untraceable financial medium for hackers
David Uberti – WSJ
After Colonial Pipeline Co. on May 8 paid roughly $4.4 million in cryptocurrency to hackers holding its computer systems hostage, the Federal Bureau of Investigation followed the digital money. Over the next 19 days, court records show, a special agent watched on a publicly visible bitcoin ledger as hackers transferred the 75 bitcoins to other digital addresses. A May 27 transfer of nearly 64 bitcoins landed at a virtual address to which the FBI gained access, providing an opportunity to get a warrant and pounce.
***** Good old fashioned police work, that is how.~JJL
First Crypto and Cannabis. Now Psychedelics
Swetha Gopinath – Bloomberg
Clarify Pharma raised $2.3 million on the Aquis Stock Exchange; IPO is fourth for Jonathan Bixby, Mike Edwards in eight months
Jonathan Bixby and Mike Edwards, the duo that’s taken public companies involved in cryptocurrencies, e-sports and cannabis, are back with a fourth London listing in eight months. This time, it’s psychedelics. Clarify Pharma invests in biotech and life-sciences companies seeking to prove the safety and efficacy of psychedelic-based substances. It raised 1.96 million pounds ($2.3 million) on the Aquis Stock Exchange, a small U.K. bourse. The stock opened at 2.77 pence, up 11% from the 2.50 pence listing price.
******* Take a deep breath and consider this. Now let it out.~JJL
What Is Payment for Order Flow? Behind the Trading Controversy at Robinhood and Other Brokers.
Bill Alpert – Barron’s
With meme stocks once more riding a wave of retail trader enthusiasm, regulators are scrutinizing payment for order flow—the controversial payments that brokerages like Robinhood receive for routing trades to third-party trading firms, instead of stock exchanges. Order-flow payments subsidize the commission-free trading that’s become the norm with U.S. retail brokers, but they are banned in markets like Canada and the U.K. Why? The concern is that the payments discourage brokers from obtaining the best trades for their customers—violating the broker’s duty to get a customer the “best execution” on a buy or sell order.
***** The best execution is the one that pays the broker the most while also giving the appearance of getting the customer a regulatorily required good fill.~JJL
Thursday’s Top Three
Our top story Thursday was the Financial Times’ Gensler says SEC to review payment for order flow. Second was Marex cancels London listing, also from the Financial Times. Third was, for the fifth or sixth time in the top three, A former head of macro strategy at legendary investment firm Citadel lays out the 5 key qualities he believes makes a great trader — and provides a rare outlook on the future of hedge funds, from Business Insider.
206,547,371 pages viewed; 26,011 pages; 233,141 edits
|CryptoMarketsWiki, our archive of the cryptocurrency and blockchain world, is going strong and keeping pace as this area of finance grows and evolves.Recently Updated Pages
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When Americans Took to the Streets Over Inflation; In the 1960s and 1970s, spiraling prices for staples like meat and gasoline wreaked havoc on the U.S. economy, thanks to political and policy mistakes that offer a warning for today.
Jon Hilsenrath – WSJ
In the fall of 1966, a wave of protests swept the U.S., capturing the attention of Washington politicians, big business leaders and newsroom headline writers. But these Americans weren’t voicing their anger over the war in Vietnam or racial discrimination. The protests were against rising grocery prices, and the foot soldiers in what was described as a “housewife revolt” were largely middle-class women with children. Fed up with the increasing cost of living, they marched outside of supermarkets with placards demanding lower prices, sometimes printed in lipstick.
Bitcoin Plan Roils Crypto World Seeking Regulatory Clarity
Vildana Hajric and Yakob Peterseil – Bloomberg
International banking regulators’ proposal to classify Bitcoin as the riskiest of assets dragged cryptocurrencies further into the mainstream financial world. It would also make it extremely costly for banks to hold digital tokens on their balance sheets, potentially delaying crypto’s wider adoption.
Steel’s Massive Rally Is Hitting All Parts of the Global Economy
Joe Deaux – Bloomberg
Some U.S. mills stopped taking spot orders, buyer says; Prices in the U.S. have tripled during the past year
The steel industry is booming like never before as the global economy recovers from the pandemic, and the ripple effects are being felt by everyone from home builders to appliance makers.
What’s Scarier Than the Inflation Scare? Markets; Investors are displaying extreme confidence in the Fed’s ability to keep prices under control.
John Authers – Bloomberg
A Transitory Day
The bets have been placed. At this point, there is lots of money on the notion that U.S. inflation really is only transitory, that Jerome Powell and his colleagues at the Federal Reserve really mean it when they say that inflation is transitory, and that they care more about spurring a rise in employment. These propositions aren’t so far-fetched. But the confidence with which they are now being backed on the market does look most far-fetched, at least to me. This was a day when core inflation in the U.S. was revealed to be running at its fastest in 29 years, and faster than expectations — and yet it also saw the S&P 500 rally to a new all-time high.
Bitcoin Ruling Roils Crypto World Seeking Regulatory Clarity
Vildana Hajric and Yakob Peterseil – Bloomberg
International banking regulators’ decision to classify Bitcoin as the riskiest of assets dragged cryptocurrencies further into the mainstream financial world. It also made it extremely costly for banks to hold digital tokens on their balance sheets, potentially delaying crypto’s wider adoption.
Goldman Sachs requires its U.S. employees to report their vaccination status.
Lauren Hirsch – NY Times
Goldman Sachs wants to know how many of its employees have gotten a Covid-19 shot. The bank sent a memo this week informing employees in the United States that they had until noon on Thursday to report their vaccination status.
Man Group’s CIO Sandy Rattray to leave in management reshuffle; Hedge fund fared better than some rivals during pandemic but investment performance has faltered
Laurence Fletcher – FT
Man Group’s chief investment officer Sandy Rattray is to leave the group as part of a reshuffle of the hedge fund’s senior management. Rattray, a former Goldman Sachs staffer and a co-creator of the Vix index of market volatility, will hand over his responsibilities over the next few months and leave in the second half of the year, Man Group said.
Fund administration group Sanne agrees Cinven talks over £1.4bn deal; FTSE 250 company based in Jersey has rejected 4 previous takeover offers from private equity firm
Kaye Wiggins – FT
Sanne, the UK-listed fund administration business, has agreed to hold talks with private equity firm Cinven over a potential £1.4bn takeover after repeatedly rejecting its earlier approaches.
BlackRock wins Chinese approval for mutual fund business; Green light for fully owned unit marks latest instance of Wall Street boosting presence in country
Thomas Hale – FT
BlackRock has received the first approval for a foreign asset manager to launch a wholly owned mutual fund business in China, as the US group boosts its presence in the country’s rapidly expanding investment industry.
Crypto ranked as riskiest business; Klarna valued at $46bn, Altice’s big BT stake, JBS pays ransom
Chris Nuttall – FT
Handling cryptocurrencies is the riskiest of businesses, according to the world’s most powerful banking standards-setter. As moves to regulate the market accelerate, the Basel Committee on Banking Supervision released a report on Thursday calling for cryptocurrencies to carry the toughest bank capital rules of any asset.
Meme Stocks’ Latest Frenzy Isn’t About a Short Squeeze; Short interest in meme stocks such as GameStop and Clover Health is relatively muted, suggesting hedge funds aren’t crowding into trades that bet on falling prices
Anna Hirtenstein – WSJ
Meme stocks have made a comeback, with one big change: this time around, short sellers aren’t a big player in the market. Individual investors have been gearing up for some weeks to take on hedge funds that are betting against their favorite stocks. In January, their strategy of banding together online to send a handful of shares like GameStop Corp. “to the moon” allowed them to deliver sharp losses to their deep-pocketed opponents and claim a victory over Wall Street pros.
Hedge Fund Behind Amazon-MGM Deal Amasses Big Bet on Uranium; Anchorage, best known for selling Hollywood studio MGM to Amazon.com, bought uranium in a bet on higher prices for the nuclear fuel
Joe Wallace – WSJ
The hedge fund behind the Amazon.com Inc.-MGM Holdings Inc. deal has another trade up its sleeve: going big on uranium. New York hedge fund Anchorage Capital Group LLC has amassed a holding of a few million pounds of uranium, people familiar with the matter say, in a bet that prices of the nuclear fuel will recover after a decade in the doldrums. It is buying and selling uranium alongside mining companies, specialist traders and utility firms with nuclear-power plants, turning the fund into a significant player in the market.
Regulators setting climate rules would be ‘enormous failure’; Risk Live: ‘Trust markets’ not regulators to move capital away from big carbon emitters, says LGIM
Will Hadfield – Risk.net
Regulators should allow the market to decide what information companies disclose on their emissions of carbon dioxide and other greenhouse gases, according to Legal & General Investment Management. “We jolly well should be able to get round to engaging with enough companies to persuade them to disclose this and to disclose it in a way that is consistent with a commonly agreed set of standards,” said Nick Stansbury, LGIM’s head of climate solutions.
Crypto spot market structure pushing institutions towards synthetics; Risk Live: Credit risk and custody challenges with spot could push investors to derivatives and ETPs
Ben St. Clair – Risk.net
As institutional investors start to use cryptocurrencies, experts say the differences in market structure mean they’re likely to stick to synthetic exposures to the asset instead of dabbling in the spot cash market popular with retail. Spot cryptocurrency trading has remained a retail-driven market, with execution and custody happening at the exchange, but synthetic exposures through derivatives and exchange-traded products (ETPs), for example, offer a familiar product for institutions looking
El Salvador’s Bitcoin Beach Is the Crypto Economy
Marcus Aleman – AP
After El Salvador’s congress made the bitcoin legal tender this week, eyes turned to this rural fishing village on the Pacific coast. Known to surfers for its pounding waves, El Zonte has had the cryptocurrency in its economy for the past year.
Market Automation Lowers Costs for Retail Investors: MMI
Anna Lyudvig – Traders Magazine
There has been an overall decline in the cost of trading, including the bid-ask spreads, Kirsten Wegner, Modern Markets Initiative (MMI) CEO, said. “What we’ve seen over the past three decades is a widespread adoption of high frequency trading technology and automated trading technology,” she told Traders Magazine.
Gary Gensler Indicates That the SEC Has Meme-Stock Trading and Bitcoin in Its Sights
Avi Salzman – Barron’s
The frenzied trading in meme stocks and the speculation in cryptocurrencies appear to have landed in the crosshairs of the new chief of the Securities and Exchange Commission.
If You Don’t Wear Glasses Now, You Probably Will Soon; All that pandemic screen time hasn’t been good for our eyesight.
Therese Raphael – Bloomberg
I have been four-eyed since I was 19. My prescription for nearsightedness was so mild, however, that I could manage without glasses if I wanted to. Over the years, my myopia needle moved only slightly, generally hovering around -1.0. A slight reading prescription was added in middle age, introducing me to the joys of varifocal lenses and a new chance to shop for frames.
China Approves Emergency Use of Covid Shots for Kids Aged 3-17
Vaccines from China’s Sinovac, Sinopharm get the nod; China says 620 million people got shots as of June 10
China has approved two Covid-19 vaccines produced by Sinovac Biotech Ltd. and Sinopharm for emergency use in people aged three to 17, as the country races to inoculate its more than 1.4 billion people. The two shots were given the green light after expanded clinical trials found they were safe and capable of stimulating a strong immune response among children and teens, Shao Yiming, a researcher with the Chinese Center for Disease Control and Prevention, said at a briefing Friday in Beijing.
UK’s lockdown easing should be slowed; Government priority should be to prevent a return to harsher restrictions
The editorial board – FT
It has long been predicted that once Britain reopened there would be another wave of coronavirus cases. One reason is that the vaccination programme, despite good headway, is not yet available to everyone — in England those aged between 25 and 29 were only invited to book their first jabs this week. Even when fully vaccinated the shots cannot offer complete protection. Vaccine hesitancy has been limited in the UK, yet a resurgence of infections when Britons began to socialise again was almost certain.
Slow Vaccinations in Developing World Set to Drag on Oil Demand; IEA forecasts return to record demand by end of next year
David Hodari – WSJ
The world’s appetite for crude oil will return to its pre-pandemic highs by the end of next year but low coronavirus vaccination rates in emerging economies are pushing the pandemic’s end date further away, the International Energy Agency said Friday. In its market report, the energy watchdog said that while it expects global oil demand in 2022’s final quarter to hit 100.6 million barrels for the first time since late 2019, it was also slashing its forecast for resurgent demand in the second half of this year.
Reports of Severe Covid or Death After Vaccination Are Rare, but Not Unexpected; No vaccine is ever 100 percent effective, experts say, stressing that the shots remain critical in reducing severe disease and death from the coronavirus.
Emily Anthes – NY Times
Over the last few months, a steady drumbeat of headlines has highlighted the astounding real-world effectiveness of the Covid-19 vaccines, especially the mRNA vaccines made by Pfizer-BioNTech and Moderna. The vaccines, study after study has shown, are more than 90 percent effective at preventing the worst outcomes, including hospitalization and death.
AstraZeneca Vaccine Carries Slightly Higher Risk of Bleeding Disorders, Study Shows; But the research, involving 2.53 million adults in Scotland, found that the vaccine’s benefits outweighed the small risks.
Denise Grady – NY Times
People receiving the Covid vaccine made by Oxford-AstraZeneca had a slightly increased risk of a bleeding disorder, and possibly other rare blood problems, researchers reported on Wednesday.
Moderna’s Covid-19 Vaccine Seeks FDA Authorization for Use in Adolescents; The biotech asks FDA to authorize its Covid-19 vaccine for ages 12 to 17
Peter Loftus – WSJ
Moderna Inc. said Thursday it has asked U.S. health regulators to authorize the use of its Covid-19 shot in adolescents ages 12 to 17, setting up the potential availability of a second vaccine option for adolescents.
How to Reopen Offices Safely; Flush the taps, focus on indoor air quality and consider getting creative about staff schedules.
Emily Anthes – NY Times
For the last 15 months, many American offices sat essentially empty. Conference rooms and cubicles went unused, elevators uncalled, files untouched. Whiteboards became time capsules. Succulents had to fend for themselves.
Exchanges, OTC and Clearing
NX Filtration lists on Euronext Amsterdam; A pureplay ESG growth company and the first ‘Dark Green’-labelled IPO on Euronext Amsterdam
Euronext today congratulates NX Filtration, the global provider of breakthrough direct nanofiltration technology for pure and affordable water, on its listing on Euronext Amsterdam (ticker code: NXFIL). It is the first IPO on Euronext Amsterdam with a ‘Dark Green’ label, as rated by Cicero, a leading ESG rating agency.
Euronext announces June 2021 quarterly review results of the CAC® Family
Euronext today announced the results of the quarterly review for the CAC® family indices, which will take place after markets close on Friday 18 June 2021 and be effective from Monday 21 June 2021.
Euronext announces June 2021 quarterly review results of the ISEQ® Family
Euronext today announced the results of the quarterly review for the ISEQ 20®, ISEQ 20® Capped and ISEQ® Small, which will take place after markets close on Friday 18 June 2021 and be effective from Monday 21 June 2021.
HKEX Names New Group Head of Internal Audit
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce today (Friday) that it has named Ms Winsome Ng as Managing Director and Group Head of Internal Audit. In her new role, Ms Ng will oversee HKEX Group’s Internal Audit function, as well as providing independent assurance to the Board on the group’s risk management, governance and internal control processes.
Expansion of ICE ESG Reference Data Shows Broad Differences in ESG Reporting Between Europe and the U.S.
Intercontinental Exchange, Inc.
European companies 1.5x more likely to report Scope 1 and Scope 2 emissions than in the U.S.; European companies provide clearer goals for meeting gender equality and climate objectives; ESG infrastructure and regulations have existed longer in Europe than in the U.S.
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global provider of data, technology and market infrastructure, today announced that its environmental, social and governance (ESG) reference data platform now includes coverage of major public European companies, allowing users to make actionable comparisons across companies, sectors and geographies. Key findings from the database showed significant differences in ESG reporting between the largest companies in Europe and the United States.
CME Group Inc. Announces Second-Quarter 2021 Earnings Release, Conference Call
CME Group Inc. will announce earnings for the second quarter of 2021 before the markets open on Wednesday, July 28, 2021. Written highlights for the quarter will be posted on the company’s website at 6:00 a.m. Central Time, the same time it provides its earnings press release. The company will also hold an investor conference call that day at 7:30 a.m. Central Time, at which time company executives will take analysts’ questions.
Performance Bond Requirements: Energy, Agriculture – Effective June 11, 2021
“As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below.
Variable Storage Rate (VSR) Results for Wheat and KC HRW Wheat Premium (Storage) Rates
Performance Bond Requirements: Agriculture, Energy, and Metal Margins – Effective June 11, 2021
As per the normal review of market volatility to ensure adequate collateral coverage, the Chicago Mercantile Exchange Inc., Clearing House Risk Management staff approved the performance bond requirements for the following products listed in the advisory at the link below
Effective Dates for Spot Month Position Limits in the July 2021 Core Products
Spot month limits are effective at the close of trading on the dates listed (in chronological order):
Notification of Brands No Longer Produced
Please be advised that the following Copper Brands currently listed as deliverable against the Exchange’s Copper futures contract are no longer produced:
Notice of Summary Action
MEMBER: INTERACTIVE BROKERS LLC
CME RULE VIOLATION: Rule 576. IDENTIFICATION OF GLOBEX TERMINAL OPERATORS
Each Globex terminal operator shall be identified to the Exchange, in the manner prescribed by the Exchange, and shall be subject to Exchange rules. If user IDs are required to be registered with the Exchange, it is the duty of the clearing member to ensure that registration is current and accurate at all times. Each individual must use a unique user ID to access Globex. In no event may a person enter an order or permit the entry of an order by an individual using a user ID other than the individual’s own unique user ID.
PENALTY: On May 19, 2021, Interactive Broker LLC, pursuant to Rule 512 (“Reporting Infractions”), was issued a $5,000 fine for its violation of Rule 576.
SGX reports market statistics for May 2021
Economic optimism bolsters derivatives demand; Singapore stock market continues to outpace global benchmark
Singapore Exchange (SGX) today released its market statistics for May 2021. Optimism of a sustained economic recovery from the global health crisis bolstered derivatives demand, while cash equities were actively traded even as inflation concerns moderated gains. Derivatives traded volume on SGX rose 6% year-on-year (y-o-y) to 18.1 million contracts in May. SGX’s suite of pan-Asia benchmark equity derivatives climbed 8% y-o-y to 13 million contracts. SGX FTSE China A50 Index Futures increased 13% y-o-y to 6.9 million while SGX FTSE Taiwan Index Futures, launched in July 2020, advanced 28% month-on-month (m-o-m) to a four-month high of 1.8 million. SGX MSCI Singapore Index Futures added 24% y-o-y to over 1 million contracts.
Publication of Revised Japan’s Corporate Governance Code
Tokyo Stock Exchange, Inc. (TSE) has partially revised the Securities Listing Regulations pertaining to the revision of Japan’s Corporate Governance Code (hereinafter the “Code”) (*) with effect from June 11, 2021. This revision is based on the proposals made by the Council of Experts Concerning the Follow-up of Japan’s Stewardship Code and Japan’s Corporate Governance Code (Chairperson: Hideki Kanda, Professor of Gakushuin University Law School) (hereinafter the “Council”). Jointly operated by the Financial Services Agency and TSE, the Council made proposals to revise the Code in order to advance governance reform.
SmartTrade selects former CME and Goldman executive as chief revenue officer; New chief revenue officer brings over 25 years of industry experience to the role including 19 years spent at Goldman Sachs International.
Annabel Smith – The Trade
Trading technology provider SmartTrade Technologies has appointed a former CME Group and Goldman Sachs International executive as its new chief revenue officer. Colin Murphy joins SmartTrade based in London, where he will be responsible for overseeing the strategy and execution of the company’s revenue-generating operations.
Bank of England and BIS launch London innovation hub; The London-based centre marks the fourth location new location to become part of the BIS Innovation Hub programme in the last two years.
Annabel Smith – The Trade
The Bank of England and Bank of International Settlements (BIS) have launched a new London-based centre as an expansion of the BIS Innovation Hub programme. BIS’ innovation programme aims to foster innovation in technology-driven financial services, working to identify technology trends that impact and serving as a focal point for innovation in the central banking community.
Clip Becomes Mexico’s Fintech Unicorn
Press Release – BusinessWire
Clip, Mexico’s leading digital payments and commerce platform, today announced it has received a U.S. $250 million capital investment led by the SoftBank Latin America Fund and Viking Global Investors LP. The investment is the largest ever for a payments company in Mexico and establishes Clip as the first payments Unicorn in the 12th largest economy in the world, with a valuation approaching U.S. $2 billion.
Klarna valued at $46 billion in SoftBank led funding round
Ryan Browne – CNBC
Swedish fintech firm Klarna said Thursday that it raised $639 million in a new funding round led by SoftBank, valuing the company at $45.6 billion.
Klarna is one of the largest providers of “buy-now-pay-later” services, which let people finance their shopping purchases interest-free over a period of monthly instalments. These services have become particularly popular since the coronavirus pandemic began.
Fintech giant Klarna raises $639M at a $45.6B valuation amid ‘massive momentum’ in the US
Mary Ann Azevedo – TechCrunch
Just over three months after its last funding round, European fintech giant Klarna is announcing today that it has raised another $639 million at a staggering post-money valuation of $45.6 billion.
Rumors swirled in recent weeks that Klarna had raised more money at a valuation north of $40 billion. But the Swedish buy now, pay later behemoth and upstart bank declined to comment until now.
The fintech endgame: New supercompanies combine the best of software and financials
Shiran Shalev, Aaron Rinberg and Lior Mallul – TechCrunch
If money is the ultimate commodity, how can fintechs — which sell money, move money or sell insurance against monetary loss — build products that remain differentiated and create lasting value over time?
And why are so many software companies — which already boast highly differentiated offerings and serve huge markets— moving to offer financial services embedded within their products?
Ransomware Attack Roiled Meat Giant JBS, Then Spilled Over to Farmers and Restaurants; While plants were closed, prices of beef and pork climbed and farmers sought new buyers for their livestock
Jacob Bunge and Jesse Newman – WSJ
Employees at the U.S. division of JBS SA, JBSAY -0.68% the world’s largest meat company, noticed something wrong in their computer systems over Memorial Day weekend, the unofficial kickoff for the busy summer grilling season.
McDonald’s Hit by Data Breach; Hack exposed some U.S. business information, customer data in South Korea and Taiwan
Heather Haddon – WSJ
McDonald’s Corp. MCD 1.35% said hackers stole some data from its systems in markets including the U.S., South Korea and Taiwan, in another example of cybercriminals infiltrating high-profile global companies.
The Ruthless Hackers Behind Ransomware Attacks on U.S. Hospitals: ‘They Do Not Care’; An Eastern European group known as Ryuk has hit at least 235 facilities, raking in more than $100 million
Kevin Poulsen and Melanie Evans – WSJ
A ransomware attack on a national hospital chain nearly brought Las Vegas hospitals to their knees. Another attack in Oregon abruptly shut down alerts tied to patient monitors tracking vital signs. In New York, one county’s only trauma center briefly closed to ambulances, with the nearest alternative 90 miles away.
What the recovery of a Bitcoin ransom shows about cryptocurrencies and privacy.
The revelation this week that federal officials had recovered most of the Bitcoin paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think.
Electronic Arts, a video game maker, is the latest company to be hacked.
Kellen Browning – NY Times
Electronic Arts, the maker of popular video games including the FIFA, Madden, Sims and Medal of Honor series, said Thursday that it was investigating an intrusion into its network that resulted in game source code and tools being stolen.
Nigeria’s Central Bank May Launch a Digital Currency Pilot in 2021; A central bank official said Nigeria has been researching CBDCs for two years.
Sandali Handagama – Coindesk
Nigeria may launch a central bank digital currency (CBDC) by the end of 2021, according to a central bank official. Speaking at an online news briefing on Thursday, Rakiya Mohammed, an information technology specialist at the Central Bank of Nigeria (CBN), said that the entity had been exploring a possible CBDC for over two years, according to local media reports.
Solana-Based Oxygen Taps Jump Trading in Bid to Be DeFi’s Top ‘Prime Brokerage’
Ian Allison – Coindesk
Oxygen, a kind of decentralized finance (DeFi) brokerage built on the high-throughput Solana blockchain, has added Chicago-based Jump Trading as a strategic partner.
Bitcoin Futures ‘Backwardation’ Points to Weak Institutional Demand: JPMorgan
Omkar Godbole – Coindesk
An unusual condition known as “backwardation” that has developed recently in the bitcoin
futures market should be seen as a sign of weak demand for the cryptocurrency on the part of big institutional investors, JPMorgan wrote in a new report.
Crypto Lender BlockFi Launches Institutional Investor Platform
Vildana Hajric – Bloomberg
Cryptocurrency financial services provider BlockFi Inc. is launching a bundled financing and trading platform for institutional and high-net-worth clients. BlockFi Prime, as it’s known, is the latest in a suite of products from the Jersey City, New Jersey-based firm, which also offers digital-asset borrowing, among other things. The new service, which will be available to clients including asset managers, family offices, hedge funds, private equity firms and corporate entities, will feature real-time quotes and 24-hour delayed settlement. The company also expects to soon offer capabilities for margin trading and automated margin lending, as well as derivatives.
Can Crypto Buttress the Asset Management Industry? There are big opportunities for investment firms in digital currencies. But a lot hinges on market regulators.
Mark Gilbert – Bloomberg
The outlook for the global asset management industry, plagued in recent years by unmerciful downward pressure on fees, is starting to look brighter. With memestocks, decentralized finance and non-fungible tokens capturing the headlines, money managers need to keep up with the zeitgeist. A new report suggests that the cryptocurrency markets offer a great opportunity for fund managers and wealth management firms to tap a new client base and seize a source of fresh revenue. Color me skeptical.
China’s Digital Yuan Wallets Are ‘Inclusive,’ PBOC Official Says
China’s digital yuan wallets are designed to ensure everyone can use them and in different formats, according to Mu Changchun, director general of the central bank’s Digital Currency Research Institute.
Alan Howard makes fresh investment in crypto start-ups; Hedge fund manager backs custody and trading technology group Copper.co and app Kikitrade
Joshua Oliver- FT
Billionaire hedge fund manager Alan Howard has continued his crypto shopping spree despite the slump in digital currency prices, with new investments in two digital-asset start-ups.
Digital Currency Asset Manager Hires Its First CMO; Deborah Bussière will promote investment products in a noisy sector of finance
Nat Ives – WSJ
Grayscale Investments LLC, a digital currency asset manager, has named Deborah Bussière as its first chief marketing officer. Grayscale, which offers over-the-counter funds focused on bitcoin and other digital currencies, had $53 billion in assets under management as of May 12, according to the company. Responsibility for marketing was previously shared internally, with external support from Vested LLC, its advertising and public relations agency of record.
State Street unveils digital assets unit; expands into crypto, CBDCs and tokenisation; The new unit, State Street Digital, will be led by well-known securities services veteran Nadine Chakar, and seeks to address the industry-wide shift to a digital economy.
Joe Parsons – The Trade
State Street has launched a new unit dedicated to evolving its role in digital finance, expanding into cryptocurrencies, central bank digital currencies (CBDC) and tokenisation. Known as State Street Digital, the new unit will be led by well-known securities services veteran Nadine Chakar, and seeks to address the industry-wide shift to a digital economy.
More Chinese provinces issue bans on cryptomining
Authorities in China’s northwestern province of Qinghai and a district in neighbouring Xinjiang ordered cryptocurrency mining projects to close this week, as local governments put into practice Beijing’s call to crack down on the industry.
Miami Bitcoin Gathering Was a Covid Hot Spot, Attendees Say
Jonathan Levin – Bloomberg
Cryptocurrency podcaster Luke Martin said he caught Covid-19 during the Bitcoin 2021 conference in Miami last week, one of the biggest events to take place in the U.S. since the pandemic began.
The ‘Cornwall consensus’ is here; Leaders gathering at the G7 now accept that globalisation creates vulnerabilities as well as efficiencies
Gillian Tett – FT
Three decades ago, the British economist John Williamson coined the phrase “Washington consensus” to describe a collection of free-market, pro-globalisation ideas that American leaders (among others) were promoting around the world. Now, however, a new tag is in the air: the “Cornwall consensus”.
Germany Shuts Door on Patent Trolls; New legislation aims to end the country’s status as a haven for patent litigators who have targeted tech companies
Ruth Bender – WSJ
Germany on Friday removed a legislative quirk that had made it a prime destination for globally active patent litigators who increasingly target fast-growing tech companies. Until now, patent owners were able to almost instantly obtain temporary bans from courts on the sale of products accused of patent infringement. That and a network of fast, specialized courts, had made Germany a popular venue for legal patent claims targeting international companies such as Apple Inc., Samsung Electronics Co. and Alphabet Inc.’s Google.
Boris Johnson Is a Terrible Leader. It Doesn’t Matter.
Samuel Earle – NY Times
Boris Johnson, Britain’s freewheeling, clownish prime minister, is about to play host. On June 11, the day after a private meeting with President Biden, Mr. Johnson is scheduled to welcome other Group of 7 leaders to Cornwall, on the southwestern coast of England, to discuss climate change, the global pandemic recovery and the retreat of liberal democracy around the world.
SEC Again Warns Investors Against Bitcoin Futures Funds; The U.S. Securities and Exchange Commission (SEC) sent out a second note to investors urging to reevaluate Bitcoin futures-focused funds.
Helene Braun – Coindesk
The U.S. Securities and Exchange Commission (SEC) reiterated the risks of investing in bitcoin (BTC, -2.37%) futures-focused funds with a staff note on Thursday that underscores the uphill battle that U.S. bitcoin exchange-traded funds (ETFs) face.
Texas State Regulator Greenlights Banks to Custody Crypto; A June 10 notice from the Texas Department of Banking told state-chartered banks they’re okay to work with crypto companies.
Cheyenne Ligon – Coindesk
State-chartered banks in Texas have been given the green light to custody crypto assets on behalf of their customers, a state regulator announced Thursday. The guidance is not representative of new law, but an affirmation that state-chartered banks are allowed to provide crypto custody services as long as there are adequate protocols in place and the banks are complying with existing legal frameworks, according to a June 10 notice posted on the Texas Department of Banking’s website.
Judge Dismisses Anti-Money-Laundering Charges Against MoneyGram; The order concludes a settlement agreement the company entered into in 2012 for failing to prevent mass-marketing and consumer-fraud phishing schemes
Dylan Tokar – WSJ
Anti-money-laundering charges against MoneyGram International Inc. were dismissed after prosecutors said the money-transfer company had complied with the terms of a long-running settlement agreement. The order by Judge Christopher Conner of the U.S. District Court in Harrisburg, Pa., on Thursday brought to a close MoneyGram’s more than eight-year effort to win the U.S. Justice Department’s approval for its compliance program. Prosecutors last month asked Judge Conner to dismiss a court filing from 2012 that charged the Dallas-based company with aiding and abetting wire fraud and violating the Bank Secrecy Act.
ASIC extends transitional relief for foreign financial services providers following Federal Budget
ASIC is extending for 12 months – to 31 March 2023 – our transitional relief for foreign financial services providers (FFSPs) from the requirement to hold an Australian financial services (AFS) licence, pending the outcome of the Australian Government’s consultation about the regulation of FFSPs.
Former director of Australian Reliance and Reliance Franchise Partners permanently banned
ASIC has permanently banned Kimberley Hanson from providing financial services, controlling an entity that carries on a financial services business and from performing any function involved in the carrying on of a financial services business.
Prepared Remarks at the Meeting of SEC Investor Advisory Committee
Gary Gensler – SEC
Good morning. Thank you Jennifer, Heidi, and all the committee members for having me. I enjoyed meeting with members of the Executive Committee yesterday and am thrilled to meet the whole committee for the first time. I’m grateful for the members’ time and willingness to represent the interests of American investors.
Remarks at Meeting of Investor Advisory Committee
Commissioner Hester Peirce – SEC
Thank you, Jennifer [Marietta-Westberg], and the rest of the committee members for holding this meeting today. Thank you also to today’s panelists. Allison [Bennington] and Mina [Nguyen], I appreciate your hard work on this Committee. Your voices will be missed.
Statement for Investor Advisory Committee Meeting
Commissioner Elad L. Roisman – SEC
Today, the Committee will be devoting the bulk of its meeting to discussions regarding a broker’s duty of best execution. I appreciate the willingness of the panelists to participate in today’s meeting. The issues you will be discussing have received increasing amounts of attention in light of the volatility associated with certain so called ‘meme stocks’. However, the underlying dynamics and market structure issues are not new. As is the case with most market episodes, they tend to elevate (or re-elevate) to the public discourse topics such as best execution, market data and market structure that the Commission has been grappling with for some time.
Investing and Trading
FOMO Traders Rotate From Bitcoin to Meme Stocks; Meme stocks are rising as BTC stabilizes after a volatile May.
Damanick Dantes – Coindesk
Popular meme stocks are rallying again as cryptocurrencies stabilize after a volatile May. Analysts call it a “fear of missing out,” or FOMO, as traders rotate from one hot market to the next. “We continue to see the rotation out of crypto and back into stocks favored by the Reddit crowd,” Lev Borodovsky, editor of the The Daily Shot newsletter, wrote in an email to CoinDesk. “I’ve noticed this connection a couple months ago.”
The New Meme Stock Is a Danish Biotech Firm That Spiked 1,387%
Christian Wienberg – Bloomberg
Danish investors and analysts spent the morning trying to figure out why a tiny biotechnology company suddenly soared almost 1,400% during U.S. trading hours. Orphazyme A/S says it has no idea why its American depositary shares surged overnight. When trading started in Copenhagen, the Danish shares rose as much as 76%. The company has now warned investors against being sucked into the frenzy.
Powell Gets Wall Street Buy-In to View That Inflation Won’t Last
Rich Miller – Bloomberg
Treasury yields retreat even after prices jump most since 2008; Druckenmiller complains Fed policy is distorting the market
Federal Reserve Chairman Jerome Powell and his colleagues appear to be winning over investors with the argument that the current surge in consumer prices won’t last. On Thursday, when news broke that U.S. inflation climbed to 5% in May for the first time since 2008, yields on the key 10-year Treasury note moved in the opposite direction — falling to a three-month low of around 1.43%. And while bond-market gauges of expected inflation edged upward, they remained well short of this year’s high reached in May.
Oil demand to surpass pre-pandemic levels by end of 2022, says IEA; Consumption expected to rebound by 5.4m barrels a day this year
Anjli Raval – FT
Oil demand is expected to exceed pre-coronavirus levels by the end of 2022, the International Energy Agency said on Friday, with the body calling on world producers to “open the taps”.
Private capital industry soars beyond $7tn; Investors hungry for higher returns spur rapid growth in offbeat assets
Robin Wigglesworth – FT
The private capital industry has grown to more than $7tn thanks to demand for higher-returning but pricey and opaque strategies, spurring the likes of Schroders and JPMorgan to launch new divisions and sending others on the prowl for acquisitions.
Has Covid wrecked your retirement plans? Millions have seen their pension prospects shaken by the pandemic
Faith Glasgow – FT
At the start of 2020, Rosemary Hirsch felt confident that it would be her year. Months after being made redundant she was just about to start work again. A local authority project manager living in south London, she had lost her job early in 2019 and interviews had repeatedly failed to materialise into employment offers.
GameStop shares tumble while SEC probes trading activity; Plan to issue new shares and regulator’s investigation send retail investor favourite falling
Aziza Kasumov and Madison Darbyshire – FT
Shares in GameStop slid 27 per cent on Thursday after the video game retailer announced it was planning to issue new shares and disclosed that the US Securities and Exchange Commission was investigating trading activity in its stock.
Environmental, Social and Corporate Governance
Tree planting could undermine fight against climate crisis, scientists warn; Widely used measure to offset CO2 emissions can disrupt natural ecosystems, says report
Camilla Hodgson – FT
Popular measures to combat climate change such as tree planting and switching to bioenergy can harm nature and undermine efforts to reduce global warming, according to a report by 50 leading scientists.
Chinese institutions put ESG ETFs on most-wanted list; Survey reveals 80% plan to allocate up to 20% of their assets to the sustainable funds over next five years
Echo Huang – FT
Exchange traded funds that focus on environmental, social and governance themes have become the top choice for Chinese institutions investing in the vehicles, despite enduring doubts over performance.
How ESG Stocks Perform Depends on Who Ranks Them; Ratings vary widely among the three dominant firms, leading to inconsistent performance
Shane Shifflett – Bloomberg
Money is pouring into stocks that get good grades on issues like building a diverse workforce and reducing carbon emissions. But figuring out how high- and low-rated companies perform is nearly impossible because of inconsistencies in the way they are rated. A close look at the ratings and performance of stocks ranked by the three major providers of data on environmental, social and governance criteria shows that companies can have widely different ratings.
Compliance Officers Play Leading Role in Pursuing Diversity Goals; Risk-management skills can help in creating a more inclusive workplace
Mengqi Sun – WSJ
Corporate compliance officers are getting more involved in diversity and inclusion efforts, using their expertise in helping employees adhere to laws and company policies to push for change. Many companies made commitments to promote racial equality last year following the murder of George Floyd while in police custody, including by hiring and promoting Black employees and fostering a workplace culture where all employees feel welcome.
HSBC trades first FX hedges linked to global MSCI ESG index; Total return swap executed by HSBC marks the first time that the MSCI World ESG Leaders Index had been hedged with an FX overlay.
Annabel Smith – The Trade
UK investment bank HSBC has executed the first FX hedges linked to the MSCI World environmental, social and governance (ESG) Leaders Index. HSBC said the execution of the total return swap based on a custom-made index established by the bank, known as MSCI World ESG Leaders 100% hedged to GBP Index, marks the first time the index has been hedged with an FX overlay.
Credit Suisse’s 30-Year-Old Trading Prodigy Goes It Alone
Laura Benitez, Donal Griffin, Marion Halftermeyer, and Alastair Marsh – Bloomberg
Trader helped bank generate about $220 million in 2020; Complaints were made in 2019 to the FCA regarding his conduct
In the midst of his dizzying rise, Hamza Lemssouguer was a prize worth vying for at Credit Suisse Group AG. The firm allowed its 30-year-old trading prodigy to take on high levels of risk to rack up profits in illiquid corners of wild markets. When he turned that hot run into a job at hedge fund Citadel late last year, the Swiss bank promised him his own fund to lure him back.
Deutsche Bank Urged by ECB to Ensure Timely Chairman Succession
Nicholas Comfort and Steven Arons – Bloomberg
ECB is pushing banks to seek approval for top roles in advance; Some Deutsche Bank appointments previously irked regulators
Deutsche Bank AG has been told by its top regulator not to wait too long in naming a successor to Chairman Paul Achleitner, who has overseen the lender during one of its most tumultuous periods. The European Central Bank wants to ensure that Deutsche Bank identifies its next supervisory board chairman well in advance of Achleitner’s departure in May next year, according to people familiar with the matter who asked for anonymity to discuss the private communication.
Credit Suisse loses ground in prime broking after Archegos blow-up; Swiss bank suffered $5bn hit from collapse of Bill Hwang’s fund and pledged to rein in risk
Joshua Franklin – FT
Credit Suisse has lost ground to rival banks in winning new business for its prime brokerage unit this year after suffering a $5.5bn loss on credit extended to Bill Hwang’s Archegos family office and pledging to scale back risk.
US hedge funds Melvin Capital and Light Street suffer further losses; Industry estimated to have lost $6bn shorting five meme stocks since start of May
Laurence Fletcher, Ortenca Aliaj and Miles Kruppa – FT
Melvin Capital and Light Street Capital, two US hedge funds hard hit by the January rally in stocks popular with retail investors, suffered further losses in May. Melvin, the highest-profile casualty of this year’s meme stock rally, lost another 4 per cent last month, people familiar with its performance said.
Deutsche Bank pressed by ECB to name successor to Achleitner; Europe’s top banking regulator dissatisfied with lender’s handling of issue
Olaf Storbeck – FT
Europe’s top banking regulator is putting pressure on Deutsche Bank to speed up its search for a successor to chair Paul Achleitner, who will leave in May 2022 when his second five-year term expires.
The Global Logistics Logjam Shifts From Suez to Shenzhen; Outbreak at one of the world’s busiest ports leads to global shipping delays; infections in chip supply chain worsen global shortage
Stella Yifan Xie, Costas Paris and Stephanie Yang – FT
As Western economies roar back to life, a fresh wave of Covid-19 clusters in Asia—where vaccination campaigns remain in their early stages—is creating new bottlenecks in the global supply chain, threatening to push up prices and weigh on the post-pandemic recovery. An outbreak at one of the world’s busiest ports in southern China has led to global shipping delays, while infections at key points in the semiconductor supply chain in Taiwan and Malaysia are worsening a global chip shortage that has hindered production in the auto and technology industries.
Cheap Dollars Attract Foreign Investors to Treasurys; Pension funds have also become big buyers of Treasury bonds
Anna Hirtenstein – WSJ
The cheapest dollars in years are spurring a rise in foreign investment in U.S. government bonds at the same time that pension funds are boosting their holdings—and that demand pickup could weigh on Treasury rates even as the economy strengthens.
King Of Cards; Ken Goldin—market Maker, Evangelist, Therapist—is Cashing In On Priceless Pieces Of Cardboard.
Lucas Shaw – Bloomberg
Ken Goldin arrived at his office in Runnemede, N.J., at about 8:30 p.m. on March 6 and ordered a Philly cheesesteak with pizza sauce from Luigi’s restaurant. Goldin is a former triathlete and normally a health freak, but he’s also superstitious, and the pizza steak—no onions, extra sauce on the side—had brought him luck recently. In November his company, Goldin Auctions, sold $16 million worth of sports memorabilia, a personal record at the time. In January he booked $36 million, more than he’d done in all of 2019.
Steve Cohen’s NYC Condo Sells Above Asking Price After Big Cut
Oshrat Carmiel – Bloomberg
Manhattan duplex penthouse finally sold for $30.5 million; New York’s luxury market is being fueled by bargain hunters
It took eight years and four brokerages to finally sell Steve Cohen’s luxury Manhattan condo. Now his apartment carries another distinction in a discount-obsessed market: It sold above the asking price. The duplex penthouse, owned by the Point72 Asset Management founder and New York Mets owner, was marked down in February to $29.5 million — the final whittling from a price tag that began at $115 million in 2013.
Following $33 Million NYC Buy, Hedge-Funder Spends $39.5 Million on North Palm Beach Mansion; Igor Tulchinsky bought the roughly 19,000-square-foot spread in the Seminole Landing area less than two months after purchasing an apartment inside the country’s most-expensive condo tower
Katherine Clarke – WSJ
Less than two months after closing on a $33 million apartment in Manhattan, Connecticut-based hedge-fund manager Igor Tulchinsky is buying again, this time a $39.5 million mansion in North Palm Beach, Fla. Mr. Tulchinsky is the founder and chief executive of WorldQuant, a hedge fund and quantitative-investment management firm. In a statement, Mr. Tulchinsky’s agent, Ryan Serhant of Serhant, said his client is “excited to spend a significant amount of time in Florida as WorldQuant expands its global presence to include West Palm Beach and Miami.”
Goldman CEO David Solomon to drop single on eve of return-to-work plan
Lydia Moynihan – NY Post
Goldman insiders have two things to groan about this weekend: Goldman Sachs CEO David Solomon’s back-to-work plan and his musical alter ego “DJ D-Sol.” Solomon, who spins records as a DJ in addition to running the Wall Street behemoth, has announced plans to release a new single titled “Learn to Love Me” on Friday — the eve of his June 14 back-to-work plan for employees, according to his verified @davidsolomonmusic Instagram account.