Breaking News

US Treasury market structure could pose systemic risk

stock market treasury FX

First Read

Hits & Takes
JLN Staff

Happy Friday the 13th!

Yesterday I learned I will be having hip replacement surgery. Using the logic of the sooner the better, I have decided to have the surgery on August 2, which happens to be the last day of the MarketsWiki Education World of Opportunity series in Chicago.

Needless to say, I will not be at the last day of the series. Someone from JLN will be filling in for me as master of ceremonies on that day.

I should be back in action the next week, though working from home, as I only have to be in the hospital for 3 days or so. I expect a full recovery within eight weeks of the surgery, which will leave me just under 50% cyborg. For those of you scoring at home, I will now have two new knees, a new shoulder, two improvements to my back and now a hip. Luckily my memory upgrade was only moving data to the cloud.~JJL

Yesterday I received a blackmail threat by email from someone who seemingly hacked one of my passwords somehow. They asked for $2900 in bitcoin in 24 hours. I called the police.~JJL

Futures for Kids celebrated the 4th of July with their annual golf day, competing for The Bob Ray Trophy at Royal Blackheath in London. They raised £23k (or $30k) for FFK. Here are the results.~JJL

The JLN story from February about FCM losses in the wake of the February 5th market drop was in the top three from Monday onward, a record for a story we first published in late February. There’s a commentary from David Silverman of Alpha Trading on it today as well.~JK

++++

Nikkei Index Options & Futures

CFTC Announces Its Largest Ever Whistleblower Award of Approximately $30 Million
CFTC
The Commodity Futures Trading Commission (CFTC) today announced an award of approximately $30 million to a whistleblower who voluntarily provided key original information that led to a successful enforcement action. The award is the largest award made by the CFTC’s Whistleblower Program to date and is the fifth award made by the program.
/jlne.ws/2L3wMjh

++++

Inhuman Resources: Mike Picarella wanted to protect a co-worker from humiliating sexual harassment. He didn’t expect his own life to be destroyed in the process.
David Dayen – Huffington Post
ON MAY 5, 2011, Mike Picarella’s first day at HSBC, his boss wanted to know if he was sexting. “No, no,” he reassured her—his wife was just curious how things were going, so he was texting her back. His boss then inquired whether his wife had ever heard of the three-minute rule. “What’s that?” Mike asked. Well, his boss said, leaning in, if she ever wanted her husband to do something, she would give him a blowjob that lasted exactly three minutes, and voila, her wish was his command. Surveying Mike’s blank stare, she belted out one of her giant, guttural laughs and plopped herself down at her desk, a mere two feet from his.
/jlne.ws/2L82Rq4

***** You really don’t want to read this story.~JJL

++++

That Giant Sucking Sound is Post-Brexit London Losing Out; The U.K. capital’s rivals are slowly carving chunks out of its business.
Mark Gilbert – Bloomberg
Lingchi is the Chinese word for a form of torture in which flesh was systematically sliced from the body of the condemned, resulting in death by a thousand cuts. It was banned there in 1905; but, with Brexit looming, the practice is set for a revival in the City of London.
/jlne.ws/2L9xNq0

***** Bleeding to death is not a good strategy.~JJL

++++

[[David Silverman]]’s Commentary on February 5: We are a “master and slave to the system”
JLN
I read the JLN essay about the events of February 5. I had heard many of the rumors that quickly emerged in the aftermath of the carnage and, as always the case in these types of situations, wasn’t sure what to believe. So, first, congratulations on the incisive and important reporting. It’s scary to consider how vulnerable the FCM community—and by extension, the entire industry—is to these periodic shocks; especially since the previously rare black swan sighting has become an increasingly regular occurrence.
I suppose it’s possible to look at February 5 in a positive light. After all, every FCM that suffered losses was able to quickly recapitalize. But, what about the next time? And the next and the next?
bit.ly/2Jl3OXj

++++

Thursday’s Top Three
Our top read story of the day yesterday was in the top three all week and is our top read story of the year by a long shot FCMs Big And Small Suffer Major Losses On Latest Black Monday. It is uncommon for a dated story to make our top three, much less have a run like this. If you haven’t read it, it details the level of customer and clearing FCM losses taken on February 5, when the market plunged 1,175 points in the Dow and 113 points in the S&P 500. Second was the Bloomberg story CME Technical Issue Keeps Some Customers From Connecting. In third was Bloomberg’s Flash Boys on the Farm? Arms Race Is Unleashed Over Crop Data

++++

MarketsWiki Stats
129,482,804 pages viewed; 23,191 pages; 214,033 edits
MarketsWiki Statistics

++++

Lead Stories

US Treasury market structure could pose systemic risk — report; Industry group says rise of prop trading firms and electronic trading requires new rules
Joe Rennison in New York – FT
The current structure of the US Treasury market could pose a risk to financial stability, an industry advisory group to the Federal Reserve Bank of New York has concluded.
/jlne.ws/2L4lGul

EU to change share-trading rules in fear of hit from Brexit
Philip Stafford in London – FT
European markets regulators have launched a review of a key part of their new share trading rules amid concerns they may lose business to London after the UK leaves the European Union next year.
/jlne.ws/2JkFwwK

Wall Street-Backed Blockchain Company Weighs IPO, Sale
Olga Kharif and Ruth David – Bloomberg
Developer R3 hasn’t made final decision about future ownership; Investors including CEO, BofA will decide company’s course. R3, a blockchain-software company that works with more than 200 heavyweights such as Intel Corp., Microsoft Corp., US Bancorp and Wells Fargo & Co., is considering going public, according to people familiar with the matter.
/jlne.ws/2L9gbdX

Feds award JPMorgan Chase whistleblower a record $30M
Kevin Dugan – Bloomberg
Call him the $78 million man. A Florida financial investigator is getting a cool $30 million from a federal commodities regulator for blowing the whistle on a conflict of interest at JPMorgan Chase. Edward Siedle’s reward is the largest ever awarded by the Commodity Futures Trading Commission — and, in fact, is triple its previous largest award, the CFTC said Thursday.
/jlne.ws/2JjfmKN

OCC Appoints General Counsel of NYSE Group to Board of Directors
OCC
OCC, the world’s largest equity derivatives clearing organization, announced today that Elizabeth King, General Counsel of NYSE Group, has joined the Board of Directors as an Exchange Director. She fills a vacancy created by the departure of former NYSE Group President Thomas Farley in May.
/jlne.ws/2L7i7Us

Hedge Funds Should Be Thriving Right Now. They Aren’t.
James B. Stewart – NY Times
Highly paid hedge fund managers have complained for years that it’s unfair to compare their performance with the broad stock market during prolonged bullish periods. Hedge funds are designed to mitigate risk, the argument goes, and so investors in them might sacrifice some gains as markets rise while waiting for hedge funds to prove themselves in more challenging times. Those times would seem to have arrived.
/jlne.ws/2LiBhne

Bond Traders Are Flummoxed by ‘Slumpflation’; The copper-gold ratio signals slower growth, but inflation is the highest in years. What’s the bond market to do?
Brian Chappatta – Bloomberg
The world’s biggest bond market just doesn’t know what to do with the prospect of an all-out trade war instigated by the U.S.
/jlne.ws/2Lbs2Im

UBS Brought the Bond Market to Philanthropy and It Paid Off
Emily Chasan – Bloomberg
Debut development-impact bond helps education project succeed; Burgeoning niche seen as potentially ‘powerful financing tool’
The world’s first development-impact bond to fund girls’ education in India performed better than expected, suggesting the tools of the fixed-income market can be harnessed to supercharge philanthropy in emerging markets.
/jlne.ws/2LajPV1

The quality of financial information explains why stocks and bonds co-move
Stefano Cascino – London School of Economic and Political Science
The sensitivity of corporate bond returns to changes in the value of equity is a fundamental input for portfolio asset allocation. Since imperfect correlation of asset returns is a key assumption in portfolio theory, stock-bond return co-movement is important to determine the diversification benefits of bonds, and to hedge common exposures across the two asset markets. Because bonds exhibit on average lower expected returns, a higher stock-bond return co-movement implies a greater allocation to equities.
/jlne.ws/2L7bCRy

Exchanges, OTC and Clearing

Michael Spencer’s Big Trade Looks Better by the Year; TP ICAP’s woes show how right he was to retreat from voice broking.
Chris Hughes – Bloomberg
When Michael Spencer sells, pay attention. The British broking entrepreneur sold almost all his shares in TP ICAP Plc soon after he received them following the merger of his ICAP voice broking business with rival Tullett Prebon.
/jlne.ws/2L4KPFh

EurexOTC Clear Release 9.0: Announcement and service enhancements to be introduced
Eurex
With this circular, Eurex Clearing announces the introduction of service enhancements with EurexOTC Clear Release 9.0 on 3 December 2018. The timeline for the new release and the introduction of services is as follows:
/jlne.ws/2LeTguA

EXCHANGE UPDATES AND STREAMLINES ITS GUIDANCE MATERIALS
Regulatory
HKEX
Changes comprise: Two additions; Five updates; Twenty withdrawals; Aim is to provide greater clarity to market
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), today (Friday) updated and streamlined some of its Guidance Materials – Guidance Letters, Listing Decisions and Frequently Asked Questions (FAQ) – to provide greater clarity to the market.
/jlne.ws/2JjO3jx

Exchange Publishes Guide on Listing New Structured Products
HKEX
Guide is designed to help issuers in their submission of new product applications to the Exchange; Objectives includes more efficient introduction of new products to give investors more product choices
The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published today (Friday) a guide on listing new structured products on the Exchange.
/jlne.ws/2LeTLos

EPEX SPOT and ECC successfully introduce 15-minute continuous trading in Belgium and The Netherlands
Eurex
The European Power Exchange (EPEX SPOT) and the clearing house European Commodity Clearing (ECC) successfully introduced 15-minute continuous Intraday trading on the Belgian and Dutch local power spot markets. First trading day was 10 July 2018.
/jlne.ws/2Jkbadr

Eight Mexican companies join London Stock Exchange Group’s ELITE
London Stock Exchange Group
ELITE, London Stock Exchange Group’s international business support and capital raising programme, today welcomes eight new Mexican companies. ELITE has partnered with legal and professional services firm Doporto Consortium to support the onboarding of Mexican companies to ELITE. ELITE and Doporto Consortium will work closely to support the growth of dynamic companies across the country, helping them to innovate, create jobs and drive economic growth.
/jlne.ws/2Jk8yfC

Fintech

OptionMetrics Announces New Leadership Structure to Reflect Company Growth
Business Wire
OptionMetrics, an options database and analytics provider for institutional and retail investors and academic researchers, has restructured its management leadership as it continues to expand into new markets. David J. Hait, Ph.D., founder of OptionMetrics, formerly President of the company, is now Chief Executive Officer. Eran Steinberg, formerly Vice President of Sales and Marketing at OptionMetrics, now serves as Chief Operating Officer and Chief of Staff. Garrett DeSimone, Ph.D., also recently joined the team as Head of Quantitative Research.
/jlne.ws/2L57qle

Data impel economists to leave their armchairs at last; Practitioners have traditionally thought more about theory than measuring real life
Tim Harford – FT
If Hollywood is to be believed, every mad scientist who ever lived has a laboratory full of bubbling flasks, flashing consoles and glowing orbs. Science writer Philip Ball — who has visited countless research labs — tells me that reality is not so very different: the gear may be more subdued, but the gear is always there.
/jlne.ws/2L6wuby

Funding for U.S. Fintech Startups Rose 40 Percent Last Quarter
Julie Verhage – Bloomberg
A big initial public offering and strong signs of growth in the financial technology industry are giving startups in the sector a funding boost.
/jlne.ws/2Lb9I24

Thomson Reuters adds rules-based order routing to REDI EMS; Rules-based order routing will give traders ability to prioritise orders on the EMS across asset classes.
Hayley McDowell – The Trade
Rules-based order routing has been added to the REDI execution management system (EMS) at Thomson Reuters to allow traders to prioritise orders across asset classes.
/jlne.ws/2LhtBBH

Cryptocurrencies

The Fight Over Mt. Gox’s Bitcoin Stash; Hundreds of thousands of Bitcoins went missing from the busted exchange. Who gets the leftover digital currency?
Tom Redmond, Min Jeong Lee – Bloomberg
An April 7, 2017, photo shows a sign informing customers that Bitcoin can be used for payment at a store in Tokyo. PHOTOGRAPHER: TORU YAMANAKA/GETTY IMAGES
Mark Karpelès learned in June that he’s probably not going to become a Bitcoin billionaire. He calls that good news. If it had happened, he says, he would have been “one of the most hated people on Earth.” And Karpelès already has plenty of people who are angry with him.
/jlne.ws/2L1cQxJ

Ex-CFPB Deputy to Guide Crypto Firms Through Regulatory Thicket
Robert Schmidt – Bloomberg
Raj Date’s FS Vector aiming ‘to educate on all sides of this’; Former banker helped Elizabeth Warren launch consumer bureau
A former Consumer Financial Protection Bureau deputy director turned venture capitalist is opening a consulting shop to help cryptocurrency and digital banking companies navigate Washington.
/jlne.ws/2L6KAtu

Crypto Investors Try Forming First Regulated Bank, in Malta
Cindy Wang and Todd White – Bloomberg
Binance, one of the world’s biggest cryptocurrency exchanges by traded value, is seeking to lay the groundwork for a new bank whose owners will be digital-coin investors.
/jlne.ws/2LaWMcw

Billionaire Steven Cohen Invests in Crypto Hedge Fund
Katrina Lewis – Bloomberg
Billionaire Steven Cohen has invested in a hedge fund focusing on cryptocurrencies and blockchain-based companies, according to a person familiar with the matter.
/jlne.ws/2L99zw9

Bitcoin Looks More Like Gold Than a Currency; The cryptocurrency is volatile, costly to store, hard to use and deflationary.
Noah Smith – Bloomberg
In the seven months since Bitcoin’s price peaked, it has fallen by about two-thirds. But it’s still almost three times more valuable than it was a year ago:
/jlne.ws/2L8QjPw

***** Both gold and bitcoin are currency default swaps.~JJL

Bitcoin or Buffett? One gambler is willing to wager millions on the first
Shawn Langlois – MarketWatch
Warren Buffett’s Berkshire Hathaway is trading at $287,100 a share. Bitcoin is barely clearing $6,000. One intrepid crypto fan believes the gap between the two won’t last. In fact, he’s willing to bet millions of dollars on it.
/jlne.ws/2L68qFH

French Crypto Wallet Ledger Is Solving Bitcoin’s Biggest Flaw For Financial Giants
Oliver Smith – Forbes
“One million dollars straight in crypto, in cold storage,” said hedge fund chief Bobby Axelrod on HBO’s Billions in May, handing a mysterious-looking USB stick to his loyal lieutenant.
/jlne.ws/2LdpQjW

New York to Crypto Miners: Looking for Cheap Power? Let’s Talk
Chris Martin – Bloomberg
State approves utility rates that allow for miner contracts; Miners have descended upon upstate New York for cheap power
New York just cracked open a door for electricity-sucking cryptocurrency miners to take advantage of some of its cheapest power supplies.
/jlne.ws/2L4cyWB

eToro CEO: ‘We can trade $200m in crypto in one day’
Co-founder and CEO Yoni Assia on the firm’s rapid growth, its move into institutional
By Samuel Agini – Financial News
Yoni Assia struggled to remember when he first invested in cryptocurrencies. “Two thousand and… I don’t know if it’s ten or eleven,” said the co-founder and chief executive of online broker eToro. “We bought bitcoin for $5.”
/jlne.ws/2JkPDlf

Politics

A trade war risks all Donald Trump’s economic successes; The very voters who put the US president in the White House will be hurt by tariffs
Anthony Scaramucci – FT
During his first 16 months in office, President Donald Trump made all the right moves in leading the US economy and stock market to record heights: tax cuts, regulatory relief and pro-business rhetoric. Wages are inching upwards and people are returning to work. Yet, the potential for a full-blown trade war risks undoing much of that great work and punishing the very voters who elected him. The administration needs to change tactics now or risk jeopardising the midterms.
/jlne.ws/2L6hDOi

Ryan Says Trump’s Trade Policies Put U.S. Economy at Risk
Anna Edgerton – Bloomberg
House Speaker Paul Ryan drew a stark difference between his vision for trade and that of President Donald Trump, rejecting tariffs and warning that pulling out of trade agreements is a threat to the U.S. economy.
/jlne.ws/2L3wNE3

Commerce Secretary Ross to Sell All Stocks After Ethics Office Warning
Bill Allison – Bloomberg
Commerce secretary cited for late divestiture of assets; Ethics chief says failure ‘undermined public confidence’
U.S. Commerce Secretary Wilbur Ross said Thursday that he would divest all his remaining equity holdings after the government’s top ethics watchdog said his failure to sell off assets that could pose a conflict of interest “created the potential for a serious criminal violation.”
/jlne.ws/2L9htpa

Trump says Brexit blueprint likely to ‘kill’ any UK-US trade deal; President criticises Theresa May’s handling of EU negotiations as ‘unfortunate’
Demetri Sevastopulo, Henry Mance and Jim Pickard in London – FT
US President Donald Trump has begun his first official visit to Britain with an undiplomatic barrage against Theresa May, saying the prime minister’s Brexit blueprint “will probably kill” any trade deal between the two allies.
/jlne.ws/2L3lsUv

Trump says Brexit blueprint likely to ‘kill’ any UK-US trade deal
President criticises Theresa May’s handling of EU negotiations as ‘unfortunate’
Demetri Sevastopulo, Henry Mance and Jim Pickard in London – FT
US President Donald Trump has begun his first official visit to Britain with an undiplomatic barrage against Theresa May, saying the prime minister’s Brexit blueprint “will probably kill” any trade deal between the two allies.
/jlne.ws/2L3lsUv

Trade disputes take toll on emerging market equity funds; Outflows for 10th straight week take losses since start of May to more than $17bn
Joe Rennison in New York – FT
Funds invested in emerging market equities this week suffered their longest continuous bout of withdrawals in more than two years, as intensifying trade disputes weighed on investor appetite.
/jlne.ws/2L6xmgl

4,500 Tech Workers, 1 Mission: Get Democrats Elected
Kevin Roose and Sheera Frenkel – NY Times
It was four months and eight days until the 2018 midterm elections, and Anna Eskamani had not spent a penny to promote her political campaign online. Ms. Eskamani, 27, is running to represent Florida’s 47th District in the State Legislature. Like many state-level candidates, she writes her own fund-raising emails and manages her own social media accounts. And with her busy schedule on the campaign trail, advertising online is an afterthought. “My budget is zero for it right now,” Ms. Eskamani said. “It just hasn’t been necessary.”
/jlne.ws/2LftJBB

Regulation

CFTC Orders Commodity Trading Firm to Pay $3.4 Million Penalty for Attempted Manipulation of Agricultural Markets
CFTC
The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Lansing Trade Group, LLC (Lansing), a commodity merchandising firm with headquarters in Overland Park, Kansas, for the attempted manipulation of the price of certain wheat futures and options contracts that were traded on the Chicago Board of Trade (CBOT) and for aiding and abetting the attempted manipulation of the cash price for yellow corn from Columbus, Ohio (Columbus Corn).
/jlne.ws/2L6PKpm

US antitrust chief signals comfort with tech deals; Trump appointee says ‘great efficiencies’ can come from large groups buying smaller rivals
Kadhim Shubber in Washington – Ft
The US justice department’s antitrust chief has indicated he is comfortable with large technology groups snapping up smaller rivals, arguing that “great efficiencies” can come from such deals in Silicon Valley.
/jlne.ws/2L9dAAJ

CIO Pam Dyson Talks Tech Innovation; Pam Dyson at the AWS public sector summit
SEC
How does a federal agency with 4,500 employees oversee $82 trillion in annual securities trading, 21 national securities exchanges, and nearly 26,000 registered market participants? According to Securities and Exchange Commission Chief Information Officer Pamela C. Dyson, the SEC does it by multiplying the impact of every employee and leveraging technology.
/jlne.ws/2L7pr2g

Fed Chair Jay Powell: We’re “independent of political considerations”
Kai Ryssdal – MarketPlace.org
In the five months since Jerome “Jay” Powell took over as chairman of the Federal Reserve, the country is facing a growing number of tests: stagnant wage growth, tariff disputes around the world and a White House that likes to publicly offer the Fed economic advice.
/jlne.ws/2La4Eey

Ex-Barclays Trader Convicted of Fraud May Be Out of U.K.’s Reach
Franz Wild – Bloomberg
Philippe Moryoussef fled to France before Euribor trial began; Messy Brexit could help Moryoussef fight extradition
Former Barclays Plc trader Philippe Moryoussef was in his native France when a London jury found him guilty of a conspiracy to rig an interest-rate benchmark that influences trillions of dollars of pensions and mortgages. He had left London days before the trial began in April.
/jlne.ws/2L8UV88

SEC Probes Why Facebook Didn’t Warn Sooner on Privacy Lapse; Facebook faces questions on what it knew and when about Cambridge Analytica’s use of social-media data
Dave Michaels and Georgia Wells – WSJ
Securities regulators are investigating whether Facebook Inc. FB 2.16% adequately warned investors that developers and other third parties may have obtained users’ data without their permission or in violation of Facebook policies, people familiar with the matter said.
/jlne.ws/2Lcb5dz

ESMA mulls applying tick size regime on third countries as Brexit looms; Third country instruments may have to comply with tick size regime as ESMA looks to protect venues inside the European Union.
Hayley McDowell – The Trade
Countries outside of the European Union could be forced to comply with the tick size regime under MiFID II as the EU markets watchdog seeks to protect venues in Europe as the shadow of Brexit grows larger.
/jlne.ws/2LbpYgm

Buy-side warned about free-trial periods for research under MiFID II; ESMA lays out rules for free-trial periods and investment firms are excepted to keep a record that they have been met.
Hayley McDowell – The Trade
The European Securities and Markets Authority (ESMA) has clarified the use of free-trial periods for research services under MiFID II’s unbundling requirements.
/jlne.ws/2LdLQYF

ESMA delays systematic internaliser regime for derivatives; SI calculations for derivatives will now be published on 1 February 2019 as ESMA blames incomplete and insufficient data.
Hayley McDowell – The Trade
The EU markets watchdog has decided to delay the implementation of the systematic internaliser (SI) regime for derivatives to 2019.
/jlne.ws/2LcCe01

ESMA warns UK firms planning to relocate over ‘no deal’ Brexit; European regulator warns market participants over authorisation deadline for Brexit relocation.
John Brazier – The Trade
The European Securities and Markets Authority (ESMA) has made a public statement to remind UK firms to adequately prepare for a ‘no deal’ or ‘hard Brexit’ scenario on 30 March next year.
/jlne.ws/2Le00ZC

Prospectuses: ESMA consults on risk factors and exemptions for takeovers, mergers and divisions
ESMA
The European Securities Markets Authority (ESMA) has launched today two public consultations under the new Prospectus Regulation (PR).
/jlne.ws/2LgtLcu

ESMA consults on tick size regime
ESMA
The European Securities and Markets Authority (ESMA) has published a Consultation Paper (CP) proposing amendments to the tick size regime (Commission Delegated Regulation (EU) 2017/588 (RTS 11)). The MiFID II tick size regime aims at creating a level playing field between the different trading venues in the EU by regulating the minimum price increment that can be used by those trading venues. The CP aims to address issues, in a timely manner, that have arisen with respect to financial instruments where only a marginal proportion of trading is executed on EU trading venues and the main pool of liquidity is located outside the EU (third country instruments).
/jlne.ws/2Lhx4jH

FINRA Handles Record Volume of Market Activity through First Six Months of 2018
Cloud Strategy Enables Seamless Processing and Robust Market Surveillance
FINRA
FINRA processed an unprecedented amount of market activity through the first six months of 2018, averaging a record 57.9 billion electronic records per day during the period — a 62-percent increase over the average daily volume in 2017. FINRA’s pioneering cloud strategy has allowed it to handle the record-setting volume smoothly while performing vigorous regulatory oversight of securities trading.
/jlne.ws/2JkdMIh

Podcast: CFTC Talks EP051: Jim Bianco, Bianco Research
CFTC
This week on CFTC Talks, we speak with founder of Bianco Research, Jim Bianco. We cover a wide range of topics from why confidence surveys are wrong to the challenges…
/jlne.ws/2LiHajW

Investing and Trading

S&P 500 Is Very Close to Putting March and April Behind It
Richard Richtmyer – Bloomberg
A blast of buying in the last few minutes of Thursday’s trading session pushed the S&P 500 Index to within a hair’s breadth of 2,800.
/jlne.ws/2L7imim

Fed chair Powell predicts ‘significant’ boost for US economy
Sam Fleming in Washington – Ft
Jay Powell has given an upbeat assessment of the economy, predicting that tax cuts and spending increases could deliver a “significant” boost to the economy for at least the next three years.
/jlne.ws/2LdTs0B

Investment in education can counter the economic impact of an older population; But the ability of skill boosts to counter the effects of ageing seems to be smaller in countries with more educated workforces, write Rainer Kotschy and Uwe Sunde
London School of Economic and Political Science
Population ageing is one of the most important economic and social challenges in the twenty-first century. With increasing life expectancy and falling fertility, the populations of most countries are growing older. Large cohorts are being replaced by relatively smaller but better educated young cohorts, resulting in substantial shifts in the workforce and its age and education composition.
/jlne.ws/2LdNfBP

Cargill’s bets on animal protein pay off as profits hit record; Commodities group has invested heavily in feed rations for livestock, poultry and fish
Gregory Meyer in New York – FT
Feeding animals and selling meat have become the biggest sources of profit for Cargill, helping the US agricultural titan offset pressures in its historic crop trading business.
/jlne.ws/2L3satH

Activist Investors Turn Up Heat in Drive for Returns; Lazard data show activists spent $40 billion targeting 136 companies in first half
Cara Lombardo – WSJ
CEOs beware: Surging stock prices have done little to placate activist investors. Activists are launching campaigns at a record pace as the rise in passive investing pressures fund managers to find new ways to beat the market and letting the rabble-rousing investors into boardrooms becomes less taboo.
/jlne.ws/2LdK2Pi

Institutions

Citadel Hedge Funds Jump 8.8%, Extending Hot Streak
Katia Porzecanski – Bloomberg
Ken Griffin tops main rival, Izzy Englander, in first half; Millennium Management’s flagship returns almost 6% in period
Ken Griffin’s flagship multi-strategy funds extended their solid performance this year through the first half, returning 8.8 percent.
/jlne.ws/2L6ne7g

Apple Announces $300 Million China Clean Energy Fund
Mark Gurman – Bloomberg
Apple Inc., expanding its environmental efforts, announced a $300 million fund to promote clean energy in China. The iPhone maker said it’s creating the fund to boost the use of renewable energy in its supply chain, which is primarily spread across regions in China. The company and 10 of its key suppliers and manufacturing partners, including Corning Inc., Pegatron Corp., Wistron Corp. and Luxshare Precision Industry Co., will contribute to the fund over the next four years, the Cupertino, California-based company said Thursday in a statement.
/jlne.ws/2L9qE9f

JPMorgan reports 18% rise in net profits in second quarter; America’s biggest lender sees ‘good economic growth’ and strength in capital markets
Robert Armstrong in London – FT
JPMorgan Chase kicked off the Wall Street earnings season with strong second-quarter results that will provide reassurance to investors who have sold off shares in the big US banks over the past six months.
/jlne.ws/2L5o1oT

Wells Fargo profits drop as fallout from fake account scandal continues; US bank still struggling to restore reputation two years after fake accounts controversy
Alistair Gray in New York – FT
Wells Fargo’s revenues and profits declined in the second quarter, the latest sign it is struggling to restore its reputation as a reliable financial performer almost two years after a scandal over fake accounts erupted at the US bank.
/jlne.ws/2LeUAO4

Hong Kong’s Securities And Futures Commission Welcomes Appointment Of Non-Executive Directors
Mondovisione
The Securities and Futures Commission (SFC) welcomes the appointment by the Financial Secretary of Mr James C Lin and the re-appointment of Dr William Wong Ming-fung, SC as Non-Executive Directors for a term of two years with effect from 1 August 2018 (Note 1).
/jlne.ws/2Jl66Wp

Hong Kong’s Securities And Futures Commission Welcomes Re-Appointment Of Executive Directors
MondoVisione
The Securities and Futures Commission (SFC) welcomes the re-appointment by the Financial Secretary of Mr Brian Ho and Mr Keith Lui as Executive Directors for a three-year term and a one-year term, respectively, with effect from 28 August 2018 (Note 1).
/jlne.ws/2JkLZI2

Regions

Hedge Funds Turn to These Tiny Stocks That Have Been Quietly Surging
Kana Nishizawa and Bei Hu – Bloomberg
Wiwynn, Yageo, Coupa are among top picks for some investors; Rays, APTA, Sylebra made early bets on overlooked stocks
Chinese tech giants aren’t the hot hedge fund favorites they once were.
/jlne.ws/2L3zOUV

A Financial War Can’t Stop Iran. Here’s What Can; Without forceful political and military initiatives that reverse recent Iranian gains, Tehran will have no reason to resume negotiations.
Hussein Ibish – Bloomberg
Having pulled out of the nuclear deal with Iran, the Trump administration is looking for additional ways of restraining its adversary’s regional ambitions. In a visit this week to the United Arab Emirates and then at the NATO meeting in Brussels, Secretary of State Mike Pompeo reportedly focused on working with allies to turn up the heat on Tehran.
/jlne.ws/2L6AR6s

Cheating Isn’t Going to Help China Win; Skirting WTO rules will only slow the country’s technological drive.
James Bacchus – Bloomberg
The chances of defusing a U.S.-China trade war seem bleak, so long as American complaints remain focused on China’s drive to dominate the industries of the future. The U.S. has justified concerns about the methods China has chosen to pursue its “Made in China 2025” industrial plans. China refuses to accept any curbs on an effort seen as crucial to its future economic vitality.
/jlne.ws/2L62vk1

China Sovereign Fund Prepares Request to Invest at Home
Bloomberg News
$941 billion SWF would need government approval for change; Senior CIC executive cited ‘good opportunities’ in China
China’s $941 billion sovereign wealth fund wants permission to invest in domestic stocks and bonds for the first time, people with knowledge of the matter said, as it tries to end restrictions on its mandate following government moves to open up financial markets.
/jlne.ws/2L68VQ6

Billionaire Ambani Topples Jack Ma as Asia’s Richest Person
Bhuma Shrivastava , Saket Sundria , and Pei Yi Mak – Bloomberg
Reliance’s Mukesh Ambani is worth $44.3 billion on stock surge; Ma has seen his wealth decline by $1.4 billion this year
Mukesh Ambani overtook Alibaba Group founder Jack Ma to become Asia’s richest person as he positions Reliance Industries Ltd. to disrupt the e-commerce space in India.
/jlne.ws/2L8T2IB

Ireland to become first country to divest from fossil fuels; Government bill will require Strategic Investment Fund to sell EUR300m of holdings
Leslie Hook, Environment and Clean Energy Correspondent – FT
Ireland is set to become the first country in the world to divest from fossil fuels, after a bill was passed that requires its sovereign wealth fund to sell off its holdings in fossil fuel companies “as soon as is practicable”.
/jlne.ws/2L6XLe0

US cuts forecast for soyabean exports to China; First estimate on the impact of Trump’s trade war points to gains for Brazilian growers
Gregory Meyer in New York – FT
The first US government forecast incorporating the agricultural fallout from its trade war with China has come to a firm conclusion on soyabeans: China will import less, American farmers will lose business and Brazil will be a beneficiary.
/jlne.ws/2JkG0TA

Brexit

Theresa May Leaves London’s Bankers In the Dark; The Brexit White Paper fails to describe a services deal acceptable to both London and Europe.
Ferdinando Giugliano – Bloomberg
Theresa May’s government has presented its eagerly-awaited proposal on the future relationship between Britain and the EU after Brexit. One area that merits careful scrutiny concerns the City of London and financial services, given their weight on the country’s economy and central position in global markets.
/jlne.ws/2LaMPfa

Brexit white paper’s 98 pages and even more questions; EU capitals welcome document — but will have major issues with it
Alex Barker in Brussels and Chris Giles in London – Ft
Britain finally has a negotiating position for a post-Brexit partnership with the EU.
/jlne.ws/2L60d4p

A new approach for UK financial services after Brexit; We start from a unique point because our financial regulations are in effect identical, writes Philip Hammond
Philip Hammond – FT
Last Friday, prime minister Theresa May set out to the cabinet her Brexit plan for Britain: a principled, practical approach that can deliver a good deal for the UK.
/jlne.ws/2LaSkKS

0.00 avg. rating (0% score) - 0 votes

About Author

Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.