| October 19, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Options Traders Bet Good Earnings News Will Lift Stocks Broadly
Eric Wallerstein - WSJ
The key focus this earnings season: the macroeconomy.
Corporate America's ability to weather inflation and monetary tightening from the Federal Reserve are front-and-center for investors. The options market says that any significant positive news should lead to a broad-based rally for the stock market.
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One of Wall Street's most vocal bulls is scaling back his stock-market optimism and trimming risk in his bank's model portfolio. Here's why.
Isabel Wang - MarketWatch
JPMorgan Chase & Co.'s chief market strategist, Marko Kolanovic, is trimming risk exposure in the bank's model portfolio this month amid questions over central-bank monetary policy and a rise in geopolitical tensions.
Kolanovic, who has been Wall Street's most vocal bull this year, cut the size of both the company's equity-overweight allocations, or the expectation for stocks to outperform their industry peers in the equity market, and bond-underweight allocations, or the outlook for bonds to underperform peers.
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Stock-market selloff may mean another 20% drop for S&P 500, says Wall Street veteran
Isabel Wang - MarketWatch
Thomas Peterffy, the chairman and founder of Interactive Brokers Group Inc., thinks the S&P 500 index could decline nearly 20% from Wednesday's level to bottom at around 3,000.
The S&P 500 is down 22.2% year to date. The large-cap index closed at its lowest level since November 2020 on Oct.12 this year. The stock market then staged a massive turnaround, with the Dow Jones Industrial Average posting the largest one day percentage gain since November 2020, after dropping nearly 550 points at its session low.
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Hedge Funds Are Betting UK's Most Battered Assets Will Rebound
Ruth Carson and Bei Hu - Bloomberg
A number of hedge funds are starting to come around to the idea that it may be time to buy the beaten-up pound and gilts. Others say investors should remain cautious.
Great Hill Capital in New York sees opportunities to go long sterling after the currency's recent wild ride. Blue Edge Advisors Pte sees positives in longer-maturity gilts as global growth slows.
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Stock Market Outlook: Stocks on 'Rollercoaster to Nowhere'
Jennifer Sor - Markets Insider
The stock market is on a "rollercoaster to nowhere," according to Morgan Stanley Wealth Management's chief investment officer Lisa Shalett.
Shalett pointed to recent volatile swings in the market, when stocks initially plunged after September's inflation report came in above-expectations, and then soared this week on upbeat earnings reports, fueling a three-day rally ahead of more third-quarter results and November's Federal Reserve policy decision.
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As U.S. stocks rip higher, investors hunt for signs of market bottom
Lewis Krauskopf - Reuters
Some gauges of the stock market's health are showing that the latest rally in U.S. equities may be the start of a sustained move higher, though many investors are hesitant to jump on board until there are signs inflation is cooling.
Few can blame them for being skeptical. The current gain - which has seen the S&P 500 bounce about 6.5% last week's fresh intraday low for 2022 - comes on the heels of several rebounds throughout the year that eventually crumbled. Meanwhile, markets have been gripped by stomach churning volatility lately that has wrongfooted bulls and bears alike.
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| | | | | | Exchanges | | | Cboe and S&P Dow Jones Indices Announce Plans for Cboe S&P 500 Dispersion Index, First Cboe Labs Concept to go to Market
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today announced plans to collaborate with S&P Dow Jones Indices (S&P DJI), the world's leading index provider, to develop the Cboe S&P 500 Dispersion Index at its global Risk Management Conference (RMC) in Reykjavik, Iceland.
For a well-diversified portfolio, dispersion is a measure of the spread of constituent returns over a defined period, such as a month. In practice, dispersion measures both the opportunity set for individual security selection within a portfolio, as well as the potential diversification achieved by their combination. Akin to the way that the Cboe Volatility Index (VIX Index) represents implied volatility of the S&P 500, the Cboe S&P 500 Dispersion Index is intended to represent the implied dispersion among S&P 500 constituents over a 1-month horizon, based on the prices of single stock and index options.
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The Winners of the 2022, European Women in Finance Awards.
Ian Rycott - MarketsMedia
The 3rd European Women in Finance Awards was held in person at the Four Seasons Hotel last night, with the event's packed return to a physical event evoking the collective strength needed to break through the glass ceiling in finance. - www.bestexecution.net
An incredible level of support for the event saw a full house on the evening, and speeches from the winners which celebrated all of those women nominated, as well as the winners themselves.
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Position Limits - Equity Listed Products
TMX
The applicable position limits for share futures and options on stocks, exchange-traded funds, and trust units have been updated and are reflected in the position limit file and table1 below. The position limit file is available in Annex 1 and retrievable here.
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| | | | | | Strategy | | | A Legendary Options Trader Shares Best Spread for Current Stock Market
Laila Maidan - Business Insider
Tony Saliba is an options trader known for maintaining a winning streak by having 70 consecutive months of profits that exceeded $100,000, beginning in the summer of 1982.
He began his career in 1979 on the floor of the Chicago Mercantile Exchange. Options trading grabbed the then 23-year-old's attention because it had nonlinear payout opportunities.
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Rates Traders Added Risk Around CPI, Hedge Funds Covered Shorts
Edward Bolingbroke - Bloomberg
Treasury futures traders were active last week in the run up and aftermath of the US consumer price index release, adding risk across a number of contracts. Sentiment was mixed as the 10-year Treasury yield breached the 4% level, though hedge funds closed out some short positions ahead of the faster-than-expected inflation data.
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VIX Options Expiration May Unleash The Stock Market
Michael Kramer - Investing.com
I'm back after a rare day taken off. Stocks finished mostly higher yesterday, with the S&P 500 rising by around 1%. The index finished at approximately 3,720, with options expiring on Friday and the big gamma level still at 3,700. I doubt we will see much and advance from here.
That gamma level should work to keep the S&P 500 index pegged at least until Friday morning, but we will see. What complicates things is that VIX options will expire today, which means we should see it begin to trade more freely and break either higher or lower from this 30 to 32 region.
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| | | | | | Miscellaneous | | | Wall Street Traders or Washington Officials? Sometimes It's Hard to Tell.; Seven dozen senior executive-branch employees disclosed a total of 80,000 stock and fund trades in the past six years
James V. Grimaldi, James Benedict, Coulter Jones and Chad Day - The Wall Street Journal
It's the kind of rapid-fire trading you see on Wall Street: hundreds of stock-market wagers, sometimes peppered with options and other aggressive trades. But this wasn't done on behalf of professional traders. The transactions came from about seven dozen senior federal-government officials who disclosed that they or their families each made more than 500 trades from 2016 through 2021. That totals more than 80,000 transactions while these officials worked in government.
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It's the 35th anniversary of the 1987 stock-market crash: What investors can learn from 'Black Monday'
William Watts - MarketWatch
Investors suffering motion sickness from the stock market's wild October swings probably don't want to hear about it, but Wednesday marks the 35th anniversary of the single ugliest day in stock-market history.
On Oct. 19, 1987, the Dow Jones Industrial Average DJIA, -0.50% plunged 508 points, a decline of almost 23%, in a daylong selling frenzy that ricocheted around the world and tested the limits of the financial system. The S&P 500 SPX, -0.81% dropped more than 20%. At current levels, an equivalent percentage drop would translate into a one-day loss of over 7,000 points for the Dow.
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