| May 03, 2019 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Stock Volatility Isn't Dead. It's Just Got Freakish and Extreme
Yakob Peterseil and Luke Kawa - Bloomberg (SUBSCRIPTION)
Beneath the calm in global stocks lies a brittle market prone to violent spasms.
As central banks snuff out market fears for now and the brewing melt-up banishes memories of last year's meltdown, the threat of brief but extreme price swings looms over fast-money traders.
/jlne.ws/2GZwCVZ
Pioneer of Yield-Curve Recession Indicator Says Don't Relax Yet
Emily Barrett - Bloomberg (SUBSCRIPTION)
Here's one way to get a straight story on the yield curve's distortions lately: go to the source.
More than three decades ago, Campbell Harvey discovered that when long-term Treasury yields fall below short-term yields, a recession typically follows. That relationship is preoccupying many investors right now after the market anomaly -- known as a curve inversion -- materialized toward the end of last year. The normally upward-sloping curve began developing kinks and, since then, various portions have flipped to negative and back, spurring debate about which is the most relevant indicator.
/jlne.ws/2GYlRUd
Bankers Ring Alarm Bells Anew as Brexit Weakens British Economy
Silla Brush - Bloomberg (SUBSCRIPTION)
Brexit is taking an even bigger toll on the largest U.K. banks.
After years of work and millions of pounds spent in preparation for the U.K.'s withdrawal from the European Union, the delay to October and seemingly endless questions about the outcome are casting a cloud over bankers' outlooks and taking the shine off the rise in shares this year. The sentiment was underlined on Friday when HSBC Holdings Plc's Chief Financial Officer Ewen Stevenson warned that the uncertainty is plaguing consumer and business confidence.
/jlne.ws/2GZxvOj
| | | | | | Exchanges and Clearing | | | Miami International Holdings Reports April 2019 Trading Results and New Market Share Records for MIAX Exchange Group; MIAX Emerald Reaches 1% Market Share
MIAX
Miami International Holdings, Inc. (MIH) today reported the April 2019 trading activity for its three fully electronic options exchanges - MIAX, MIAX PEARL and MIAX Emerald (together, the MIAX Exchange Group). The MIAX Exchange Group collectively executed over 37 million equity option contracts in April for a combined average daily volume (ADV) of 1,765,446 contracts, representing a total U.S. equity options market share of 10.75%.
/jlne.ws/2K3gU18
Exchange operator Cboe beats profit estimates on expense control
Reuters
Cboe Global Markets Inc beat analysts' estimates for first-quarter profit on Friday, as a tight lid on expenses helped offset lower transaction fees in a softer trading environment.
Transaction fees fell about 21 percent to $430.4 million from a year earlier, hit by lower trading volumes across each trading segment.
/jlne.ws/2GTtyuP
MarketAxess Announces Monthly Volume Statistics for April 2019
MarketWatch
MarketAxess Holdings Inc. the operator of a leading electronic trading platform for fixed-income securities, and the provider of market data and post-trade services for the global fixed-income markets, today announced total monthly trading volume for April 2019 of $170.2 billion, consisting of $84.7 billion in U.S. high-grade volume, $81.4 billion in other credit volume, and $4.1 billion in liquid products volume.
/jlne.ws/2GTLLs0
SocGen's Oudea Lifts Capital Strength as Trading Slump Continues
Fabio Benedetti Valentini - Bloomberg (SUBSCRIPTION)
Societe Generale SA got some relief from its key equities business and stronger capital levels in a quarter that prolonged the slump in its investment banking unit.
The French bank's business of buying and selling equities and providing services to hedge funds did better than most peers, a rare bright spot as earnings were dragged down by a slump in fixed-income trading. A key measure of financial strength improved after the bank pulled back from some riskier businesses and sold assets.
/jlne.ws/2GYm9KH
| | | | | | Moves | | | Citadel has poached a top quant executive from Morgan Stanley
Alex Morrell and Dakin Campbell - Business Insider
Hedge-fund giant Citadel has poached a top executive from Morgan Stanley in one of the fiercest talent battlegrounds on Wall Street.
Glen Popick, the head of fixed-income strats and a nearly two-decade veteran at Morgan Stanley, has left the investment bank for a role as the head of FICC technology at the more than $30 billion hedge fund, according to people familiar with the matter.
/jlne.ws/2GTRwWE
| | | | | | Regulation & Enforcement | | | Default and non-default risks squarely on the radar for CCPs
Tan Boon Gin, CEO - SGX
It is often said that regulators spend too much time looking in the rear-view mirror instead of the road in front of them to address new and emerging risks. I would agree only to the extent that we do glance behind once in a while, to remind ourselves that during the Global Financial Crisis of 2008, Lehman Brothers' cleared derivative portfolio was in the trillions, yet it took mere weeks for the Central Counter Parties (CCPs) to close out the position. A CCP eliminates counterparty risk for participants in the financial market by assuming the role of seller to the buying Clearing Member and the role of buyer to the selling Clearing Member. By doing so, the CCP assumes most of the credit risks of the seller and the buyer.
/jlne.ws/2PLxAJs
Accounting body proposes relief on Libor transition
Philip Stafford - Financial Times (SUBSCRIPTION)
The main global accounting body is planning to modify standards for how banks and companies treat Libor-related deals on their balance sheets, in a rare shot of leniency for an industry grappling with the reform of global benchmarks.
The International Accounting Standards Board will on Friday publish proposals offering relief on the treatment of old Libor-type benchmarks and newer ones, such as Sofr, the US benchmark.
/jlne.ws/2GSSIcW
| | | | | | Strategy | | | A frothy stock market? That's just fake news
Mark Hulbert - MarketWatch
Is the bull market reaching the frothy, speculative stage that is the typical hallmark of a major top?
Many nervous investors are worried, of course. The S&P 500 index has battled back from the Christmas Eve lows to set a new record in the past week while the Dow Jones Industrial Average has neared its own record close set in October and the IPO market has suddenly heated up. If Uber concludes its long-anticipated initial public offering, which could happen in the next week, it likely will be the largest U.S. IPO in years.
/jlne.ws/2GRKphs
Take Five: Vol squall coming? World markets themes for the week ahead
Reuters
Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.
/jlne.ws/2GXc4gR
Attractiveness Of Hedging S&P 500 In Current Conditions
Seeking Alpha
In a recent post, I demonstrated how to invert options prices to build the option-implied distribution of future returns. I built the implied distribution of returns on the S&P 500 (using options on SPY) from April 25th to December 20th of 2019. The outlook for returns on SPY are a rational basis upon which to consider the relative merits of options strategies because this distribution reconciles the options prices. Not least because my previous post elicited some discussion of options, I thought it would be interesting to explore various options strategies using the option-implied distribution.
/jlne.ws/2GTW5Ah
| | | | | | Miscellaneous | | | DTCC Chief Predicts Substantial Change to Market Infrastructures Within a Decade
Emilia David - WatersTechnology (SUBSCRIPTION)
The head of one of the largest financial market utilities in the world is predicting that current market infrastructures will not exist in their current form in just 10 years as technology starts to change how the business operates.
/jlne.ws/2GTziET
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