| October 11, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | JPMorgan's Michele Warns Mighty Dollar May Trigger Next Crisis; Rising greenback could spark upheaval in derivatives market; JPMAM CIO is risk-off; cash position near highest in 10 years
Anchalee Worrachate - Bloomberg
Bob Michele, the outspoken chief investment officer of J.P. Morgan Asset Management, has a warning: the relentless dollar could forge a path to the next market upheaval. Michele has been in de-risking mode, sitting on a pile of cash which is near the highest level he has held in 10 years. And he is long the dollar. While a market crisis sparked by the greenback is not his base case, it's a tail risk that he is monitoring closely.
/jlne.ws/3MCeDXr
Jamie Dimon Warns S&P 500 May Drop 20%, Predicts US Recession: Quotes
Theron Mohamed - Markets Insider
Jamie Dimon has warned beaten-down US stocks could tumble another 20%, predicted a recession within the next year, and bemoaned America's failure to ramp up oil-and-gas production in recent months.
JPMorgan's billionaire CEO also sounded the alarm on the Russia-Ukraine conflict, flagged early signs of distress in financial markets, and welcomed Elon Musk's Twitter takeover in a CNBC interview on Tuesday.
/jlne.ws/3ChZ3eE
Central Banks 'Must Act Resolutely' To Lower Inflation: IMF
Barron's
Central banks should "act resolutely to bring inflation back to target" after figures hit multi-decade highs, the IMF said Tuesday, pointing to an unusually challenging financial stability environment.
The comments by the Washington-based crisis lender in its latest Global Financial Stability Report come as its annual meetings start this week, fully in-person for the first time since 2019.
/jlne.ws/3VlQTue
Ray Dalio Expects 'Negative or Poor Real Returns' in Markets for the Next Five Years
Barron's
When MarketWatch first started publishing financial news and data 25 years ago, Bridgewater Associates was a little-known hedge fund firm that was overshadowed by other macro investing trading operations, like George Soros' Quantum and Paul Tudor Jones' Tudor Investments. In 1997, Bridgewater had grown a bit from its early days, when Ray Dalio ran it out of his two-bedroom New York apartment, but Dalio's name didn't appear in MarketWatch for the first few years of our existence.
That would change. Bridgewater grew rapidly and Dalio distinguished himself during the financial crisis, when his firm made money for its investors while most hedge funds crashed. MarketWatch reported how Bridgewater's main hedge fund climbed 9.4% in 2008 and 2% in 2009.
/jlne.ws/3euZYjQ
Markets at risk of 'disorderly' sell-off, says IMF
Colby Smith and Chris Giles - Financial Times
Risks to the stability of the global financial system have "materially worsened", the IMF has warned, cautioning that markets are at risk of a "disorderly repricing" that will hit emerging and developing countries most severely.
In its twice-yearly Global Financial Stability Report, the multilateral lender said the surge in global borrowing costs, coupled with poor trading conditions and souring growth prospects, threatened to unmask the financial system's fragility.
/jlne.ws/3eugtwB
ETFs Were Hit Hard In Monday's Gilt-Market Selloff
Caitlin McCabe - WSJ
Just how brutal was Monday's selldown in inflation-linked U.K. bonds? A vivid picture comes from funds that track the sector.
One 709-million-pound, or $784-million, Blackrock exchange-traded fund tumbled 10% for its second-largest daily loss since it was launched in 2006.
/jlne.ws/3RPhD3r
Opinion: The stock market is in trouble. That's because the bond market is 'very close to a crash.'
Philip van Doorn - MarketWatch
Don't assume the worst is over, says investor Larry McDonald.
There's talk of a policy pivot by the Federal Reserve as interest rates rise quickly and stocks keep falling. Both may continue.
McDonald, founder of The Bear Traps Report and author of "A Colossal Failure of Common Sense," which described the 2008 failure of Lehman Brothers, expects more turmoil in the bond market, in part, because "there is $50 trillion more in world debt today than there was in 2018." And that will hurt equities.
/jlne.ws/3yxbwKp
| | | | | | Exchanges | | | OCC Product Group and Class Group Updates for SPIKES Products
MIAX
The Options Clearing Corporation ("OCC") has moved Class Group 499 (SPIKES Options and SPIKES Futures) into Product Group 500 (S&P 500 Volatility Indexes). The Class Group and Product Group changes implemented by the OCC became effective on October 7, 2022.
/jlne.ws/3wWeXsv
CME Group International Average Daily Volume Reached 6.1 Million Contracts in Q3 2022, Up 21% from Q3 2021
CME Group
CME Group, the world's leading derivatives marketplace, today announced that its quarterly international average daily volume (ADV) reached 6.1 million contracts in Q3 2022, up 21% year on year. Reflecting all trading reported from outside the United States, volume was driven largely by 36% growth in Foreign Exchange products, a 32% increase in Interest Rate products and a 25% growth in Equity Index products.
/jlne.ws/3EAgZEc
SGX Group reports market statistics for September 2022; Derivatives activity at all-time high as FX, commodities outperform; STI constituent stocks, REITs boost securities market turnover
SGX Group
Singapore Exchange (SGX Group) today released its market statistics for September 2022. Derivatives trading volume increased to a record on the back of heightened activity in foreign exchange (FX) and commodity futures, as challenging macro conditions spurred institutional demand to manage portfolio risk.
/jlne.ws/3ClYa4R
MIAX Exchange Group - Options & Equities Markets - Final Reminder: Reg SCI / SIFMA BCP Testing On Saturday, October 15, 2022
MIAX
Overview: As previously announced in the April 19th, September 19th and September 28th Alerts, the MIAX Exchange Group will be participating in the 2022 SIFMA BCP Testing on Saturday, October 15, 2022. All Members that are required to test with MIAX Options, MIAX Pearl Options, MIAX Emerald Options and/or MIAX Pearl Equities Exchanges in accordance with Regulation Systems Compliance and Integrity (Regulation SCI) were notified on April 5, 2022. However, all Members are encouraged to test.
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Eurex Quarterly Equity News Q3/2022; Equity derivatives market volatility remains high during Q3 Market wrap-up
Eurex
Due to ongoing tightening by central banks across the globe, equity market volatility remains high across index benchmarks and single stock options. Despite the higher volatility and respective opportunities, Eurex observed slightly lower volumes in Q3 vs. Q3 last year. One driver is certainly some lower activities in the structured product market with missing autocalls and existing single- and multi-products below parity.
/jlne.ws/3yu38LC
The New York Stock Exchange and The Johannesburg Stock Exchange Announce Collaboration on Dual Listings
ICE
The New York Stock Exchange, part of Intercontinental Exchange, Inc. (NYSE: ICE), and the Johannesburg Stock Exchange (JSE) today announced that they have signed a memorandum of understanding to collaborate on the dual listing of companies on both exchanges. The NYSE and the JSE also agreed to jointly explore the development of new products and share knowledge around ESG, ETFs and digital assets.
jlne.ws/3CqkASw
| | | | | | Strategy | | | Stock Market Outlook: 5% Decline Thursday If CPI Comes in Above 8.3%
Matthew Fox - Markets Insider
Investors should be prepared for a steep stock market decline on Thursday if the highly anticipated September Consumer Price Index reading comes in above 8.3%, JPMorgan's trading desk said on Monday.
The bank expects the stock market to sell-off by 5% if the inflation gauge shows a re-acceleration relative to August's 8.3% reading, as it would bolster the Fed's call that it needs to continue to hike interest rates to tame inflation.
/jlne.ws/3Ml6V3H
This Option Trade Profits If S&P 500 Falls
Gavin McMaster - Investor's Business Daily
With the market in correction, many analysts have a price target of 3300 for the S&P 500. That's equivalent to 330 on the SPDR S&P 500 ETF (SPY). Today we'll structure a butterfly spread option trade centered around the SPY ETF. It profits if the S&P 500 falls to that 3300 level in the next five weeks, down from about 3632 today.
/jlne.ws/3Ez4YP7
| | | | | | Miscellaneous | | | UK Turmoil Spawns the Return of Bond Vigilantes
Mohamed A. El-Erian - Bloomberg
The turmoil in the UK bond market threatens not only the stability of the country's financial system but also the economic and social well-being of most of its citizens. It is a situation that is going from bad to worse, and other countries must watch it carefully. Underpinning the recent disruption is the reemergence of the bond vigilantes â a debt-disciplining financial force that, long repressed, is starting to reassert itself.
/jlne.ws/3TggTFw
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