| February 09, 2023 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Ultrashort-Term Options Trading Could Be Rattling Stock Markets
Eric Wallerstein - WSJ
The advent of ultrashort-dated options trading dominating daily volumesâknown as 0DTE, or "zero days to expiry"âhas shaken the options market. It may be rattling stocks, too.
During this year's stock-market rally, gains have all come during daily trading, according to research from Susquehanna International Group's Chris Murphy. That contrasts with the past several decades, when overnight moves comprised much of stocks' performance.
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Traders Are Starting to Put Big Money on the Fed Going to 6%; $18 million bet nets $135 million if Fed hits 6% by September; Wagers on higher peak rate dominate flow in options Wednesday
Edward Bolingbroke - Bloomberg
A shift in sentiment on Federal Reserve policy is emerging in interest-rate options, where several big wagers on the central bank's benchmark rate reaching 6% - nearly a percentage point higher than the current consensus - have popped up this week. The thinking behind them flies in the face of what has been an article of faith over the past two months: that the Fed, after raising rates eight times in the past year, is near the end of its tightening cycle.
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Adani Has an Index Problem
Matt Levine - Bloomberg
One important way for activist short selling to work is that a short seller makes a big bet against a company's stock, the short seller publishes a report saying that the company is a fraud, the company publishes a rebuttal saying that actually it is good and the short seller is the fraud, and then some outside referee with some official power evaluates both reports and decides who wins.
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Finance Chiefs Are Optimistic Any Recession Will Be Short, but Challenges Remain
Jennifer Williams-Alvarez, Mark Maurer and Richard Vanderford - WSJ
Finance chiefs are coming into the year grappling with a variety of challenges, from rising interest rates and inflation to managing labor disruptions, pricing and inventory. Yet many have cautiously optimistic outlooks.
While pockets of the economy are weak and highly indebted companies may face financing difficulties and default risks in the current environment, panelists at The Wall Street Journal's CFO Network Summit on Wednesday said companies in healthy sectors should be able to slog through any headwinds.
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Adani Group's $100 Billion Loss and Hindenburg Claims Explained
Reyhan Harmanci - Bloomberg
How much damage to a nation's economy can one short seller do? It's hard to gauge the price to India exactly, but the total loss for an Indian magnate is $109 billion as of yesterday, in the case of Gautam Adani and the short-selling firm Hindenburg Research.
In this week's Businessweek cover story, Bloomberg reporters Anders Melin and P R Sanjai dive into the drama that's transfixed the global finance community for weeks now. The trouble started on Jan. 24, when the American firm (with a very on-the-nose name) released a report alleging that the Indian supercompany had been puffing up its numbers for years through a variety of unscrupulous ways.
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Bed Bath & Beyond Stock Slammed by Hedge Fund Deal as Redditors Stay Away (BBBY)
Bailey Lipschultz - Bloomberg
It has all the makings of Wall Street's last big score from the meme-stock frenzy.
Take one of the financially collapsing companies loved by the army of day traders who once pushed its share price through the roof. Extend it a lifeline in return for a chunk of stock. Then get ready to sell for a large profit.
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| | | | | | Exchanges | | | SGX Group reports market statistics for January 2023
Singapore Exchange
Derivatives activity climbs amid hopes that China's reopening will catalyse growth; Securities turnover outpaces gains in most Southeast Asian markets. Singapore Exchange (SGX Group) today released its market statistics for January 2023. Trading activity increased amid optimism that China's reopening will catalyse growth. SGX Group's open and accessible platform enabled institutional investors to manage their portfolio risks efficiently across multiple asset classes, even with underlying cash markets closed for the Lunar New Year.
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| | | | | | Strategy | | | The Stock Market Could Be Set for a Big Drop. How to Prepare for It.
Steven M. Sears - Barron's
After a certain age, everyone accepts that they will have only a small number of close friends. An active life competes with the time needed to develop deep friendships.
Nevertheless, many people act as if they have a deep knowledge of the stock market, which is larger, and far more complicated, than any social circle.
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Adani Share: Hedge Funds Hunting for Adani Bargains after Stock Rout
Bei Hu, David Ramli and Richard Henderson - Bloomberg
Hedge funds that previously stayed clear of stocks and bonds linked to Gautam Adani's empire are jumping in after a more than $100 billion wipeout in the group's market value.
Battered down bond prices and heightened price swings on many Adani securities have drawn in new investors, according to hedge fund managers, traders and investors, who asked not to be identified discussing private details. Some said the strong assets and cash flows of Adani ports, power and green energy companies would ensure debt is serviced and that investors would be shielded from any losses resulting from any future defaults.
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VIX As An Indicator
Cboe (Video)
In today's #Vol411, @RussellRhoads discusses how traders can use the $VIX futures curve for sentiment analysis.
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| | | | | | Miscellaneous | | | 2 New ETFs Play Stocks Owned By Republicans and Democrats. Is That a Good Idea?
Karishma Vanjani - Barron's
The exchange-traded fund arena is teeming with thematic products constantly fighting for investor attention, and two new entrants on Tuesday promised to add "meaningful value" to portfolios. That latter remains to be seen.
The Unusual Whales Subversive Democratic ETF (ticker: NANC) and Unusual Whales Subversive Republican ETF (KRUZ) are equity-based ETFs launched Tuesday that invest in companies based on stocks purchased and sold by sitting, registered Democratic and Republican members of U.S. Congress, respectively, and/or their spouses.
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Meme stocks and cannabis were investing fads, but Morgan Stanley says AI is the real deal
Barbara Kollmeyer - MarketWatch
What investor out there wouldn't like to hop in a time machine and travel back to 1997 (or even earlier) and pick up some Amazon.com shares for a mere 10 cents, spotting a theme early on and riding it to the top.
Our call of the day from Morgan Stanley says they should not sleep through what some see as the next big thing - generative language models, such as exhibited by ChatGPT.
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| | | Jeff Bergstrom
Editor
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