Breaking News

Trump’s Defense of Putin Too Much for Some Republicans; U.K.’s May in Brexit Turmoil

First Read

Hits & Takes
JLN Staff

The word of the day in the United States is: Treason.~JJL

On Saturday, WGN Television held a Trading Tech 300 session with Demetrius Ivory teaching the weather merit badge to a group of Boy Scouts and one girl STEM Scout. At the class we learned what a CME is in the world of weather. A CME, or coronal mass ejection, is a significant release of plasma and magnetic field from the solar corona. They often follow solar flares and are normally present during a solar prominence eruption. ~JJL

Later this week Advantage Futures and Esulep will be hosting Trading Tech 300 workshops. On Thursday, Advantage Futures and Terry Duffy will be teaching the chess and public speaking merit badges. On Friday, Rob Khoury and Esulep will be teaching the entrepreneurship merit badge.~JJL

If you want to know how your firm can get involved with Trading Tech 300, just contact me.~JJL

Fittingly, Jeff Bezos was crowned the wealthiest man in modern history on Amazon Prime Day. (However, Amazon’s site did have a glitch at the start of the 36-hour shopping event.) ~SD

A study of 27 CEOs in the Harvard Business Review showed that a chief exec averaged 37 meetings a week that took up 72 percent of their work time. ~SD

Our friends at Eventus launched a new website yesterday. It was no big deal, but a huge eventus.~JJL

Journalist and CME Group board member Terry Savage also has a new website.~JJL

Chicagoan Richard Elden, an innovative hedge fund investor who started as a journalist, is dead at 84.~JJL

Stuart Kaswell is stepping down as MFA General Counsel.JJL

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Building a Compliant Crypto Consortium
JohnLothianNews.com
Everyone who has a stake in cryptocurrency right now has one thing on the mind: regulation. The SEC and CFTC are scrambling to find a way to define and regulate cryptocurrencies. Whether you’re cheering them on, booing, or tapping your foot impatiently, the next zeitgeist for the global crypto markets will depend on how regulators resolve the current challenges surrounding digital asset trading.

Enter OpenFinance Network (OFN): a digital asset trading platform for the next stage in the crypto market’s evolution. CEO Juan Hernandez sat down with John Lothian News to discuss how OFN is striving to fill the gaps in the crypto market infrastructure to help the people, the tech, and the ideas behind digital tokens and blockchain technology reach their full potential.
Watch the video here »

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Monday’s Top Three
Two of the three top stories of the day on Monday were all about politics, history and the presidency. Politico’s Never Trumpers Will Want to Read This History Lesson took the top spot by far with its history of the Democrats turned Republicans. The third most read piece was Michael Bloomberg’s essay America’s Values Must Guide White House Diplomacy. Second was The Trade’s piece Buy-side voluntary clearing set to take off

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MarketsWiki Stats
129,702,545 pages viewed; 23,194 pages; 214,161 edits
MarketsWiki Statistics

Lead Stories

Trump’s Defense of Putin Proves Too Much for Some Republicans
Sahil Kapur and Billy House – Bloomberg
Allies back away from president’s remarks on U.S. Intelligence; Former congressman says GOP at ‘inflection point’ on president
President Donald Trump’s equivocation on U.S. intelligence agencies during a news conference with Russian leader Vladimir Putin triggered the most intense backlash from Republicans of anything he’s done since winning election in 2016.
/jlne.ws/2uEeM4L

U.K.’s May in Brexit Turmoil With Parliament Majority Slashed
Tim Ross, Robert Hutton and Kitty Donaldson – Bloomberg
Government escapes defeat on customs bill by just three votes; Vote Leave campaign fined and referred to police for spending
U.K. Prime Minister Theresa May’s ability to deliver Brexit was thrown into doubt as infighting in her Conservative Party left her with a perilously small majority, staggering from one vote to the next.
/jlne.ws/2uH30a1

R.J. O’Brien Limited Joins LCH’s EquityClear as Clearing Member; Move Enhances Firm’s Equity CFD Offering for Professional Market Participants
R.J. O’Brien & Associates
R.J. O’Brien & Associates (RJO), the oldest and largest independent futures brokerage and clearing firm in the United States, today announced that its London-based affiliate, R.J. O’Brien Limited (RJO Limited), is now approved as a general clearing member of EquityClear, the UK-based equities clearing service of LCH Limited, a leading global clearing house.
/jlne.ws/2uCI6sw

Pro-Brexit Campaign Broke Law and Overspent in 2016 Referendum
Alex Morales – Bloomberg
Vote Leave, BeLeave fined for breaches in electoral rules; Groups broke rule banning cooperation: Electoral Commission
Vote Leave, the official pro-Brexit campaign in the U.K. referendum on European Union membership, was fined for breaking electoral laws — a verdict that is likely to further fuel calls for a second ballot.
/jlne.ws/2LmVIix

Goldman Sachs Names David Solomon to Succeed Lloyd Blankfein as Chairman, CEO; Wall Street firm has tried to expand beyond trading business
Liz Hoffman – WSJ
Goldman Sachs Group Inc. said veteran investment-banker David Solomon would succeed Lloyd Blankfein as chief executive Oct. 1, setting up a high-profile transition for a firm that is expanding well beyond its Wall Street roots.
/jlne.ws/2uGcWR4

Banks under watch over exposure to cryptocurrencies
Hannah Murphy – Financial Times
Global banking regulators are assessing the size of banks’ exposure to “crypto-assets” such as bitcoin and looking at introducing capital safeguards, in a move that could deter banks from embracing the nascent market. A report on Monday revealed that the Basel Committee on Banking Supervision is “conducting an initial stock take on the materiality of banks’ direct and indirect exposures to crypto-assets”.
/goo.gl/VWnHPH

Goldman’s cool crisis commander finally bows out; Lloyd Blankfein steered bank through turmoil, but legacy is not assured
Robert Armstrong, Laura Noonan and Arash Massoudi – FT
Most chief executives, upon their departures, are measured by how their companies grew under their stewardship and the returns reaped by their investors. On both of these metrics, Lloyd Blankfein is unexceptional.
/jlne.ws/2uH80eC

EU’s Tusk Warns Trump Trade Wars Can Lead to ‘Hot Conflicts’
Bloomberg News
EU-China summit takes place in Beijing amid U.S. protectionism; Summit yields first joint EU-China summit statement since 2015
European Union President Donald Tusk called on Donald Trump to reform the world order rather than bring it down, warning that trade wars can lead to “hot conflicts.”
Tusk issued his appeal in opening remarks to an annual EU-China summit on Monday, as he made an explicit link between the European delegation visiting Beijing and the U.S. president’s meeting later the same day in Helsinki with Russian President Vladimir Putin. The comments came a day after Trump called the EU his biggest “foe” due its stance on trade.
/jlne.ws/2uCOZdm

Houston Is a Big Energy Hub, So Why Not Price Oil Futures There?; Intercontinental Exchange plans new contract with Houston delivery as U.S. exports rise
Stephanie Yang – WSJ
Houston is set to get its own oil futures, a sign of the city’s growing importance as the U.S. sends more crude abroad.
/jlne.ws/2uGlJ5D

A small band of human traders at electronic trading giant Citadel Securities are crushing it, and they could help the firm tap into a $800 billion market
Frank Chaparro – Business Insider
One of the largest electronic traders in the world has seen its market share increase in one of the last vestiges of human trading on Wall Street.
/jlne.ws/2LdR8qa

Exchanges, OTC and Clearing

LME moves closer to lithium contract launch with request for pricing providers
Henry Sanderson – FT
The London Metal Exchange has moved a step closer to launching the world’s first lithium futures contract, issuing a request for pricing providers, according to a document seen by the Financial Times.
/jlne.ws/2LngVJf

LME to increase user choice and participation through introduction of implied pricing
LME
The London Metal Exchange (LME) today announces the introduction of implied pricing for base metals on its electronic trading platform, LMEselect, as part of its Strategic Pathway commitment to deliver greater user choice and market participation.
/jlne.ws/2LiCXQw

Intercontinental Exchange Announces Third Quarter Launch of Futures Contract Based on Permian WTI Crude Oil Deliverable in Houston
Press Release
Intercontinental Exchange, Inc. announced plans to launch a physically delivered Permian West Texas Intermediate (WTI) crude oil futures contract, deliverable in Houston, Texas. The Houston delivery point has become the pricing center for U.S. crude oil production and exports, and the new flat price futures contract is designed to serve hedging and trading opportunities in this growing market. The contract is expected to launch on ICE Futures U.S. in the third quarter, subject to regulatory review.
bit.ly/2NWrPr3

LCH adds R.J O’Brien as equity clearing member; R.J O’Brien has been approved as a general clearing member on LCH’s EquityClear service.
Hayley McDowell – The Trade
Futures broker and clearing firm R.J O’Brien has joined the London Stock Exchange Group’s clearinghouse LCH as a clearing member for equities.
/jlne.ws/2LipqIR

LSEG’s former strategy chief sees institutional crypto demand growing; David Lester speaks to The TRADE Crypto about his latest venture with former senior hedge fund executives from Omni Partners.
Hayley McDowell – The Trade
The London Stock Exchange Group’s former strategy chief and industry veteran, David Lester, has said demand for exposure to cryptocurrencies from institutional investors is growing significantly.
/jlne.ws/2LbHCUH

GC Pooling Deferred: Q&A
Eurex
The European Central Bank (ECB) recently conducted a market consultationto assess three candidate euro overnight rates as alternatives to the current benchmark EONIA, the long-established risk-free rate (RFR) for pan-European lending. A recommended RFR may be selected as early as September.
/jlne.ws/2LhOwHJ

Contingency Plan
JPX
Tokyo Stock Exchange(TSE) and Osaka Exchange(OSE) have established their contingency plans to clarify measures in the event of malfunction of systems such as those for trading or market information, as well as infrastructures provided by outside sources.
/jlne.ws/2LfxXMN

Fintech

Credit Suisse hires Citi’s Salas to run fintech banking – memo
Reuters
Credit Suisse has hired Citigroup’s Mathieu Salas to head its coverage of financial technology clients, according to an internal memo, the contents of which were confirmed by a spokeswoman for the European bank.
/reut.rs/2KXPOs4

Reed Smith Bolsters Finance and Fintech Capabilities – Adding Gerard Martin and Jeffrey Silberman in Chicago and New York
Reed Smith LLP
To fuel the continued growth of its Financial Industry Group, global law firm Reed Smith today announced that Gerard Martin and Jeffrey Silberman have joined the firm, both as Counsel. Gerard and Jeffrey represent two significant additions to areas of emphasis for the firm, finance and FinTech, respectively.
bit.ly/2JtnuYY

French central bank presses UK fintech companies on Brexit strategy; Request for details of contingency plans seen as latest Paris move to win business
Martin Arnold – FT
The French central bank has turned up the pressure on hundreds of British payment providers and digital finance companies that have customers in France by asking them for details of their Brexit contingency plans.
/jlne.ws/2LoD4Hn

Revolut reports suspected money laundering on its system; UK fintech company tells law enforcement authorities and financial watchdog
Martin Arnold – FT
Revolut discovered a spate of suspected money laundering on its digital payments system a few months ago, prompting the UK’s fastest growing financial technology company to tell law enforcement authorities and the financial watchdog.
/jlne.ws/2uNWFtx

Schroders looks to up engagement with FinTech startups; Schroders is the first asset manager to join The Disruption House for support in assessing new technology providers.
Hayley McDowell – The Trade
Global investment manager Schroders has signed up to a specialist data analytics network that aims to bridge the gap between traditional and startup financial institutions.
/jlne.ws/2LjJ47l

Thomson Reuters links up to London FinTech’s buy-side platform; The FINBOURNE LUSID platform looks to provide the buy-side with cost efficiency and better data management processes.
Hayley McDowell – The Trade
Thomson Reuters has teamed up with a London-based cloud technology firm to implement its investment management platform for client and transaction data.
/jlne.ws/2LhNT0P

Cryptocurrencies

New York State Department Of Financial Services Grants Virtual Currency License To Bitpay, Inc.
Mondovisione
Financial Services Superintendent Maria T. Vullo today announced that the New York State Department of Financial Services (DFS) has approved the application of BitPay, Inc. for a virtual currency license. BitPay is authorized to offer clearing and settlement services to merchants willing to accept payment in bitcoin or issue payments in bitcoin, and is the first wholesale payments processor to be approved for a license.
/goo.gl/EBeKHx

Coinbase Says It Has Green Light to List Coins Deemed Securities
Lily Katz – Bloomberg
SEC, Finra sign off on deals that give firm federal licenses; Company is exploring addition of five new digital tokens
Coinbase Inc., one of the most popular cryptocurrency platforms, said it got the green light from U.S. watchdogs to move forward with a trio of acquisitions that will allow it to become one of the first federally regulated venues for trading digital coins deemed to be securities.
/jlne.ws/2LpHdL4

BlackRock’s Fink Says Clients Aren’t Looking to Buy Cryptocurrency
Bloomberg Surveillance
Larry Fink, chairman and chief executive officer at BlackRock, discusses the firm’s examination of blockchain and clients’ appetite for cryptocurrency. He speaks with Bloomberg’s Erik Schatzker on “Bloomberg Surveillance.” (Source: Bloomberg)
/jlne.ws/2LndnGV

World’s First Bank-Backed Crypto Exchange Finally Opens to the Public
Wolfie Zhao – Coindesk
The world’s first bank-backed cryptocurrency exchange is now open to the public after months of delays. Japanese financial giant SBI Holdings formally launched its in-house crypto trading platform, dubbed VCTRADE, last month. Yet, as reported by CoinDesk at the time, the trading service was only available for a group of selected users who pre-registered with the platform last October.
/jlne.ws/2uJv5O2

Cryptomining Companies Consider Broadening Scope; As the price cryptocurrencies drop, some miners are searching for alternative uses for massive data centers they’ve built.
Joshua Brustein – Bloomberg
Harry Pokrandt spent the last year scouring the earth for real estate with two main characteristics. He needed cold weather, to keep his computer servers cool, and cheap electricity, to keep them running 24 hours a day. Pokrandt’s company, Hive Blockchain Technologies, filled up a Cold War-era helicopter hangar in Sweden with servers, then constructed a building of its own in Norway and filled that one up, too.
/jlne.ws/2Ls2yDw

Canada’s Only Actively Managed Crypto Fund Is 90% in Cash
Kristine Owram – Bloomberg
Manager is closely watching Bitcoin’s 30-day moving average; Sees the currency hitting new highs in next couple of years
Cash is king for Canada’s only actively managed crypto fund. The Rivemont Crypto Fund, run by Rivemont Investments, had about 91 percent of its C$3 million ($2.3 million) of assets in cash as of July 13, with the remaining 9 percent in Bitcoin, according to its latest weekly update on Facebook.
/jlne.ws/2uH4ktd

Politics

Trump pushed his personal agenda, not the national interest, at Putin summit
John Harwood – CNBC
President Trump’s stunning news conference with Vladimir Putin becomes understandable once you recognize that he was advancing his personal interests, not those of the United States.
/jlne.ws/2uBxJoE

Opinion: Donald Trump is the new Benedict Arnold
Rex Nutting – MarketWatch
Russia’s ongoing attack on our democracy amounts to an act of war. But instead of confronting Russian President Vladimir Putin, Donald Trump praised him. Instead of standing up to Putin, Trump stood by him
/jlne.ws/2uFqNad

Trump: A profile in cowardice
Michael D’Antonio – CNN
Is Trump putting Putin first, America second?
Confronted with a true alpha male in Russian President Vladimir Putin, President Donald Trump — who likes to talk tough — turned into a fawning beta in Helsinki, Finland, abandoning American interests in favor of appeasing the man who allegedly attacked the integrity of the 2016 presidential election.
/jlne.ws/2LouGra

Fed’s Powell Presents Lawmakers With a Charm Offensive
Nick Timiraos and David Harrison – WSJ
Five months into his term as Federal Reserve chairman, Jerome Powell is investing considerable time and energy on Capitol Hill.
Mr. Powell, who heads to Congress on Tuesday to begin two days of testimony on the economy, has met individually with 18 lawmakers – 10 Republicans and eight Democrats – during his first four months as chairman, according to his public calendars. He also had eight calls with lawmakers, equally split between Republicans and Democrats.
/on.wsj.com/2L0eC2S

Trump is no longer leader of the free world
John Avlon – CNN
Since the Second World War — spanning 14 US presidents, Republican and Democratic — the occupant of the Oval Office has been referred to as “the leader of the free world.” Until now.
/jlne.ws/2uH7o8O

The death of truth: how we gave up on facts and ended up with Trump; From post-modernism to filter bubbles, ‘truth decay’ has been spreading for decades. How can we stop alternative facts from bringing down democracy
Michiko Kakutani – The Guardian
Two of the most monstrous regimes in human history came to power in the 20th century, and both were predicated on the violation and despoiling of truth, on the knowledge that cynicism and weariness and fear can make people susceptible to the lies and false promises of leaders bent on unconditional power. As Hannah Arendt wrote in her 1951 book The Origins of Totalitarianism, “The ideal subject of totalitarian rule is not the convinced Nazi or the convinced communist, but people for whom the distinction between fact and fiction (ie the reality of experience) and the distinction between true and false (ie the standards of thought) no longer exist.”
/jlne.ws/2LsD5tB

House lawmakers agree on bipartisan package on capital markets rule-easing
Katanga Johnson – Reuters
Top lawmakers in the U.S. House of Representatives on Monday said they had agreed on a bipartisan legislative package to ease rules in a bid to help Main Street companies and boost jobs.
/reut.rs/2L1YlKH

Russian Accused of Infiltrating NRA on Mission From Kremlin
Tom Schoenberg and Polly Mosendz – Bloomberg
U.S. says Butina sought political back channel to Moscow; Assisted Torshin, with alleged mob ties and a link to Putin
U.S. authorities accused a Russian national of trying to establish a back channel to American politicians during the last election cycle, announcing the charges just hours after President Donald Trump accepted Russian President Vladimir Putin’s assurance his country hadn’t interfered.
/jlne.ws/2LouSqo

U.S. launches five WTO challenges to retaliatory tariffs
Reuters
The United States launched five separate World Trade Organization dispute actions on Monday challenging retaliatory tariffs imposed by China, the European Union, Canada, Mexico and Turkey following U.S. duties on steel and aluminum.
/goo.gl/NV1LS7

U.S. Treasury Restricts Donor Disclosure Requirement for Some Nonprofit Groups; Social welfare groups, trade associations won’t have to list donors, department says
Richard Rubin – WSJ
The Treasury Department will allow some nonprofit groups to provide less information about donors on their tax forms in a win for conservative organizations engaged in politics.
/jlne.ws/2LsIIbd

Regulation

CFTC Issues Customer Advisory On Digital Tokens
CFTC
The Commodity Futures Trading Commission (CFTC) today issued a Customer Advisory warning customers to use caution and do extensive research before purchasing virtual coins or tokens, including those that are self-described as “utility coins,” or “consumption coins.” This is the fourth advisory about virtual currencies the CFTC has issued to give customers a greater understanding of virtual currencies.
/goo.gl/wcQwJ1

CFTC Announces First Whistleblower Award to a Foreign Whistleblower
CFTC
The Commodity Futures Trading Commission (CFTC) today announced an award of over $70,000 to a whistleblower who significantly contributed to an ongoing CFTC investigation and led the CFTC to a successful settlement. The award is the first made by the CFTC’s Whistleblower Program to a whistleblower living in a foreign country and the sixth award to a whistleblower who provided valuable information about violations of the Commodity Exchange Act (CEA).
/goo.gl/bzYykF

SFTR 101: bringing transparency to securities finance transactions
Val Wotton, Managing Director, Product Development and Strategy, Derivatives and Collateral Management at DTCC via FOW
This year marks a decade since the collapse of Lehman Brothers, after which followed the global financial crisis. In those 10 years, regulators and policymakers have responded to the issues exposed by the crisis through the implementation of regulations to ensure greater transparency in the global financial system and the mitigation of systemic risk.
/jlne.ws/2uEyYnm

Oil Firm’s Ex-CEO Banned by SEC Over Undisclosed Personal Loans
Matt Robinson – Bloomberg
Executive used vendor money to finance lifestyle, agency says; SEC says he also borrowed from investor seeking board seat
The former head of a Houston-based oil producer agreed to be fined and banned from holding executive positions to settle a regulator’s claims that he financed a lavish lifestyle with unreported loans from company vendors and a hedge fund manager who was seeking a board seat.
/jlne.ws/2LpP1wj

SEC bribery lawsuit against Och-Ziff executives is dismissed
Jonathan Stempel – Reuters
A federal judge has dismissed the U.S. Securities and Exchange Commission’s lawsuit accusing two former Och-Ziff Capital Management Group LLC (OZM.N) executives of masterminding a scheme to funnel tens of millions of dollars of bribes to African officials.
/jlne.ws/2uH3rkn

FCA probe into investment platforms fails to make a splash; Regulator urges online providers to scrap exit fees and make it easier to switch
Kate Beioley – FT
Online investment platforms could be forced to scrap exit fees that penalise customers who switch provider and speed up transfers following the UK financial regulator’s first findings into competition issues in the UK’s £500bn retail investment market.
/jlne.ws/2LqHzRF

ESMA finalises standards for the implementation of the Prospectus Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today issued regulatory technical standards (RTS) specifying the implementation of certain provisions in the Prospectus Regulation (PR).
/jlne.ws/2LjJP06

ESMA updates Q&As on Benchmarks Regulation
ESMA
The European Securities and Markets Authority (ESMA) has today updated its Questions and Answers (Q&As) on the Benchmarks Regulation (BMR).
/jlne.ws/2LjfPlc

ESMA responds to EC consultation on Fitness Check
ESMA
The European Securities and Markets Authority (ESMA) has published its response to the European Commission (EC) Consultation Document seeking feedback to evaluate the Fitness of the European Union (EU) framework for public reporting by companies (Fitness Check). ESMA’s response focuses on those matters falling under the remit of securities regulators, and emphasises the requirements applicable to issuers admitted to trading on regulated markets.
/jlne.ws/2LjKtuy

Monthly Disciplinary Actions July 2018
FINRA
Monthly Disciplinary Actions July 2018
/jlne.ws/2Leog0X

The Financial Conduct Authority publishes Approach to Consumers paper, alongside Discussion Paper on Duty of Care
UK FCA
The Financial Conduct Authority (FCA) has today outlined the measures it will take to protect consumers and sets out when and how the organisation takes action. The Approach to Consumers document published today sits alongside a new discussion paper on a Duty of Care and taken together are intended to ensure there are no gaps in protection for consumers in the financial sector.
/jlne.ws/2LmNElv

Investing and Trading

IMF Can’t Say the Commodities Markets Are Complacent
Robert Burgess – Bloomberg
The International Monetary Fund on Monday kept its forecast for global economic growth this year and next unchanged at 3.9 percent but said financial markets seem complacent to the mounting risks of escalating tensions over trade. The IMF economists have apparently neglected to look at the commodities market.
/bloom.bg/2NSgxEh

Swiss Franc, Scandinavian Currencies Most Exposed to Trade War
Ellen Milligan – Bloomberg
Dollar and yen are the least vulnerable, says Danske Bank; Analysis is based on exposure to China and commodities: Danske
The Swiss franc and Scandinavian currencies are among the most vulnerable to the escalating trade war between the U.S. and China.
/jlne.ws/2LpOhHA

Ain’t Gonna Be No Bitcoin ETF
Themis Trading Blog
After repeated attempts to convince the SEC to approve a bitcoin ETF, the Cboe is back once again with another Bitcoin ETF application. Earlier this year, the SEC asked the bitcoin fund sponsors to withdraw all applications because of fears of fragmentation and extreme volatility. But the Cboe just won’t quit.
bit.ly/2NRYga9

Kashkari Isn’t Buying ‘This Time Is Different’ for Yield Curve
Jeanna Smialek – Bloomberg
Sees ‘little reason’ to hike much further and risk inversion; Powell could give update on his thinking in testimony Tuesday
Neel Kashkari does not want to invert the yield curve. Given anchored inflation expectations and few signs of overheating, “there is little reason to raise rates much further, invert the yield curve, put the brakes on the economy and risk that it does, in fact, trigger a recession,” the Federal Reserve Bank of Minneapolis president wrote in a post Monday on the website Medium.
/jlne.ws/2uGgFhD

Traders Exit Gold ETFs as Dollar Leaves Metal `by the Wayside’
Susanne Barton – Bloomberg
Exchange-traded funds backed by bullion drop for eighth week; Gold futures post lowest close this year, miners fall
Gold buyers are moving to greener pastures. Investors dumped exchange-traded funds backed by the metal for the eighth straight week, the longest stretch of outflows since January 2014. The exodus comes as appetite for the metal wanes amid a strengthening dollar and solid demand for equities.
/jlne.ws/2LpO6Mn

Warnings of Market Complacency Are Growing Louder
Liz McCormick and Lu Wang – Bloomberg
BlackRock’s Fink sees tariffs possibly fueling stocks losses; Yet shares have gained 3 straight months, bond swings subdued
A growing chorus of observers is saying that financial markets are too sanguine about the threat that a U.S.-instigated trade war poses to global output and asset values.
/jlne.ws/2uADnHM

Institutions

JPMorgan Ups Its ETF Game With Cheap Funds Luring Investors
Olivia Schaber and Carolina Wilson – Bloomberg
Two funds took in more than $840 million combined last week; The ETFs are far less costly than similar BlackRock products
JPMorgan Chase & Co. is finally gaining ground in the competitive ETF landscape with its BetaBuilder brand.
/jlne.ws/2LpJXrZ

BofAML’s Fake Trade Reports: Governance Breakdown?
Chris Kentouris – FinOps
How could Bank of America Merrill Lynch get away with giving institutional customers phony trade execution, transaction cost analysis and expense reports for five years?
Ten brokerage operations and IT managers contacted by FinOps Report can only speculate after reading the scant details in separate settlement reports issued by the Office of the Attorney General of the State of New York (OAG) and the Securities and Exchange Commission which jointly fined BofAML US$84 million. The consensus of those brokerage operations and IT managers: either the technology department or internal audit department were asleep at the wheel.
/goo.gl/bAwRdv

Goldman profits jump as fixed income rebounds; Earnings rise 44 per cent in second quarter
Laura Noonan – FT
Goldman Sachs enjoyed a 44 per cent rise in net profits for the second quarter, helping the bank to its best half yearly returns since 2009, as its fixed income business continued to rebound strongly from a tough 2017 and its other key divisions did well.
/jlne.ws/2LteXaA

BlackRock’s Investor-Cash Inflows Slide; Second-quarter results beat expectations, as revenue rose 11%
Asjylyn Loder – WSJ
Investors radically slowed the torrent of cash flowing into investment giant BlackRock Inc. this spring, a sign that a changing global economy and trade rifts may be unsettling a decadelong embrace of passive stock investing.
/jlne.ws/2Lp4A7r

Regions

Latin American Scorecard: Q2 2018
Silvia Kitchener – S&P Dow Jones Indices Indexology Blog
Q2 2018 showed that volatility is king in Latin America. The first quarter saw strong returns for the region, with Mexico lagging. In the second quarter, we saw a practical wipeout of all gains for the year and a return to negative territory for Latin America.
/goo.gl/EbQq9b

Complete China equity exposure made easier
Christopher Vass – FTSE Russell
The China equity markets have changed dramatically since FTSE Russell became the first international index provider to launch mainland indexes back in 2001. This shifting landscape has made it difficult for international investors to consistently target comprehensive China exposures. To help investors address these challenges, we’ve developed the Total China Concept, designed to provide a mechanism to gain access to Chinese listed equities globally.
bit.ly/2NRY0YJ

Cuba’s new constitution will recognize private property
Katherine Ellen Foley – Quartz
Cuba has published a summary of a new constitution likely to be approved by the national assembly later this week, which will recognize a right to own private property.
bit.ly/2Lq6Z1E

European Governments Explore Financial Channels for Iran; The French, British and German governments aim to keep the Iranian nuclear deal alive by providing financial conduits
Laurence Norman – WSJ
The French, British and German governments have told Iran they are exploring activating accounts for the Iranian central bank with their national central banks in a bid to open a financial channel to keep alive the Iranian nuclear deal, according to several European officials.
/jlne.ws/2LoZ193

London and Dublin in talks over access to Ireland-domiciled funds; Fund groups want reassurance that regulators are preparing for UK to be third country
Owen Walker – FT
Markets regulators in London and Dublin have started discussions over an agreement to ensure British investors can access funds domiciled in Ireland after Brexit.
/jlne.ws/2uDwTrN

China Hedge Fund Doubles Down as Market Selloff Deepens Losses
Bei Hu – Bloomberg
Springs China Opportunities Fund drops as much as 17% in 2018; Fund is buying oversold, undervalued smaller growth stocks
One China hedge fund is adding to stocks in the nation even as a rout deepened losses in its portfolio and prompted some peers to duck for cover.
/jlne.ws/2uDxMk7

Brexit

Bank of England governor Mark Carney warns of “big” impact from Brexit no deal
Jasper Jolly – City AM
Bank of England governor Mark Carney today warned of a “big economic consequences” if the UK leaves the EU without a deal.
/jlne.ws/2LmrxIA

May’s Brexit position will crumble so Article 50 should be delayed; Extending the March 2019 deadline is the best alternative to no deal with the EU
Nick Clegg – FT
So, has she pulled it off? In response to Theresa May’s “Chequers deal” and Thursday’s White Paper establishing a UK negotiating position for the Brexit deal, business groups were positive, EU leaders publicly polite and pro-European Conservative “rebel” MPs supportive. Even Michel Barnier, the EU’s chief negotiator, struck an emollient tone. Despite the resignations of Boris Johnson and David Davis, broadsides from Donald Trump and grumblings from backbench hardliners, the prime minister and her inner circle might be forgiven for thinking they are finally making progress towards a “smooth and orderly” Brexit.
/jlne.ws/2Ls0ifw

Miscellaneous

Wall Streeters in the Hamptons Turn Out for Chad Leat at Parrish Gala
Amanda L Gordon – Bloomberg
Apollo, Goldman execs toast ex-Citi ‘leveraged-finance maven’; Historic artist home, Amagansett stables also host events
Chad Leat’s Wall Street friends followed him to the Parrish Art Museum Saturday night to see him honored by CNN’s Don Lemon.
/jlne.ws/2uGsTqu

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Graduate of University of Minnesota School of Journalism and Mass Communication