| January 05, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Chicago's Cboe profits from year of stock market volatility
Nicholas Megaw - Financial Times
The people in Cboe Global Markets' options pits in downtown Chicago are not used to seeing new faces. Open-outcry transactions have been declining for decades as deals are executed electronically. Many of the roughly 300 people remaining have been there for more than 20 years.
Earlier this year, however, RFA Securities and Maven became the first new firms in 15 years to start trading the exchange group's options contracts on the S&P 500 stock index in person. Established groups such as Optiver also expanded the number of staff working on the Cboe floor to help meet the growing demand.
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***** Luck is where preparation meets opportunity. Cboe has done excellent preparation in a number of different venues and asset classes.~JJL
Hedge Funds, Eying Fed Shift, Boost SOFR Bets to a Record High
Edward Bolingbroke - Bloomberg
Hedge funds have built up record long positions in short-term interest-rate futures pegged to the Secured Overnight Financing Rate. The positioning comes amid speculation that a slowdown in inflation and economic growth will drive the Federal Reserve to start easing monetary policy in the second half of 2023.
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Investors should act as if the Fed put is no longer in place
Michael Strobaek - Financial Times
In keeping with a fine financial industry tradition, this is the time of year for prognostications of the health of the world economy and what to do with the collective wisdom of investors.
Trawling through the economic and investment outlooks of the various banks and asset managers, many have noticed an overwhelming consensus for a recession this year in the world's largest economy.
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JPMorgan's Smash-Hit Income ETF Seen Battling Off Bond Market
Katherine Greifeld - Bloomberg
One of the biggest hits in the $6.6 trillion exchange-traded fund industry last year has a worthy opponent in 2023: the bond market.
Steady income streams were in high demand last year as volatility reverberated across asset classes this past year, fueled by the worst inflation in a generation and the Federal Reserve's efforts to cool it. That powered a wave of payout-oriented fund launches, and funneled billions into the likes of the JPMorgan Equity Premium Income ETF (ticker JEPI), whose nearly $13 billion haul shattered the annual record for active ETF inflows, Bloomberg Intelligence data show.
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No Fed Cut This Year? It's More Than a Matter of Minutes
John Authers - Bloomberg
What a difference a year makes. And what a difference minutes can make. Twelve months ago, the great selloff of 2022 began as investors read through the minutes for the Federal Open Market Committee's meeting of the month before. This passage caused shock, and neither stocks (the S&P 500 dropped 2.0%) that afternoon nor bonds (the 10-year Treasury yield gained 5 basis points) have yet recovered:
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Covid in China: Why Reopening Isn't Boosting Global Oil Markets Yet
Alex Longley and Devika Krishna Kumar - Bloomberg
It's been a painful start to the new year for oil bulls.
While China's emergence from Covid Zero spurred talk of a demand boom from some of the market's biggest names, a significant resurgence in energy consumption remains weeks, if not months away.
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8 Hedge Funds That Made a Killing in 2022 by Betting Against the Economy
George Glover - Markets Insider
For most investors, 2022 was a year of adversity that saw stocks, bonds and cryptocurrencies all tumble in a brutal cross-asset bear market as inflation and interest rates surged.
But there are those who did exceptionally well amid the turbulence. Hedge fund managers including Said Haidar, Crispin Odey and Neal Berger seized the opportunity created by Federal Reserve's monetary tightening and soaring market volatility to deliver triple-digit returns for their investors.
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| | | | | | Regulation & Enforcement | | | SEC Files Objection to Binance.US's Deal to Buy Voyager Assets
Carla Mozée - Markets Insider
The Securities and Exchange Commission is seeking more information about the pending purchase of Voyager Digital's assets by the US arm of crypto exchange Binance, highlighting the regulator's attention to the crypto space after a number of blow-ups.
The SEC filed a limited objection to the $1.02 billion deal for Binance.US to take over the assets of the crypto lender, which sought bankruptcy protection last year following "prolonged volatility and contagion" in the crypto markets.
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| | | | | | Strategy | | | Worried About Buying Stocks? Rent Them Instead. Here's How.
Steven M. Sears - Barron's
The one New Year's resolution that everyone should make is learning to be a better investor.
Most everyone vows to exercise more, lose weight, and even give up booze in January, but few people, if any, commit themselves to better handling their financial lives. It's an odd disconnect.
An investment portfolio is often among the largest things anyone owns, and it becomes increasingly important to one's well-being as one ages.
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Opinion: Bearishness sets in as positive seasonal factors failed to lift the stock market
Lawrence G. McMillan - MarketWatch
The stock market tried to get off to a good start this year. With seasonally positive factors now expired, the S&P 500 Index finds itself mired in a trading range once again.
Bulls and bears are awaiting a breakout from 3760 to 3870 points in the index SPX, -0.96%. Overhead, there is still heavy resistance in the 3900-3940 area, with the major downtrend line of the bear market above that (it was last tested at 4100, in early December). Below the current levels, there should be minor support at 3700 and then better support at 3500 (the 2022 lows).
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Buy Options on These 33 Stocks in Early January, Says Goldman Sachs
William Edwards - Business Insider
Investors looking to make a buck through options trading should be on high alert during the first half of January, Goldman Sachs says.
"We believe options investors are missing the potential for key company preannouncements over the next two weeks. The first half of January has historically been the most active period of the year for preannouncements," said Vishal Vivek, vice president of derivatives research at Goldman Sachs, in a note to clients on Wednesday.
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All Eyes on Tomorrow's Jobs Number
Cboe (Video)
Scott Bauer @cboesib on the relatively unchanged $VIX landscape in the wake of yesterday's Fed minutes & economic reports, plus a glance at active single name equity #options in today's #Vol411. $VIX $TSLA $MSFT
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The SPX Hasn't Done This Since 1974
Rocky White - Schaeffer's Investment Research
Let's get one thing out of the way; 2022 was an awful year for stocks. The S&P 500 Index (SPX) fell nearly 20%, snagging its fourth-worst year since 1949. But that was then, this is now. The table below shows how the next full year tended to perform after years in which the S&P 500 lost double-digits. The last two columns break up the next year return by first and second half.
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| | | | | | Miscellaneous | | | Fight over House speaker job offers 'ominous portent of how the U.S. debt-ceiling fight will go,' analyst says
Victor Reklaitis - MarketWatch
As the U.S. House of Representatives struggles to elect its next speaker, analysts have been warning that the rocky process doesn't bode well for how other issues will get resolved later this year.
"The ongoing civil war among House Republicans as they fail to elect a Speaker of the House is an ominous portent of how the debt-ceiling fight will go this summer," said Tobin Marcus, senior U.S. policy and politics strategist at Evercore ISI, in a note on Thursday.
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Why the Fed doesn't like stock-market rallies
William Watts - MarketWatch
It was a "don't make me come back there" moment from the Federal Reserve.
A line from the minutes of the central bank's December policy meeting released Wednesday afternoon was taken as a warning to financial market participants that bets on a policy pivot in 2023 aren't welcome. And, to the extent that equity rallies and other financial market developments loosen overall financial conditions, those wagers will only force the Fed's policy-setting Federal Open Market Committee to prolong the pain necessary to bring down inflation.
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Top Hedge Fund Industry Trends for 2023
Don Steinbrugge - Traders Magazine
Here are Agecroft Partners' 14th annual predictions for the biggest trends in the hedge fund industry for 2023. These predictions are based on dialogue with more than 2,000 institutional investors located globally and hundreds of hedge fund organizations. They are also predicated upon an economic forecast of continued rising interest rates for at least the 1st half of 2023 and a moderate recession. The hedge fund industry is dynamic and both managers and investors can benefit from anticipating, and preparing for, the changes likely to occur.
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
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| | | Jeff Bergstrom
Editor
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