| August 17, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Registration is open for FIA Expo taking place this 14-15 November at a new location - the Sheraton Grand Riverwalk Chicago. Experience compelling panels that build your knowledge, product demos that deliver innovative solutions, and networking opportunities that celebrate human connections. Whether you're a trader chasing the latest trends affecting the markets, a back office manager seeking ways to increase operational efficiency or a business strategist looking for what's next, you'll find it at Expo. This year, FIA is offering full conference, single day and exhibits plus registration options. Learn more and register by 2 September for the best rates!
Register HERE
| | | | | | Lead Stories | | | Chasing Stocks Back in Vogue From Big Managers to Options Geeks; Surveys show fund positioning is rising from depressed levels; Cboe put-call ratio's 10-day average falls to four-month low
Lu Wang - Bloomberg
What began as a tentative testing of the equity-market waters is giving evidence of morphing into something bigger. While a long way from the fervid pitch of the post-pandemic years, there are signs speculative zest is spreading beyond just meme traders, who have pushed AMC Entertainment up 78% in two weeks and caused Bed Bath & Beyond to quintuple. Comparatively stodgy active fund managers just jacked up stock buying at one of the fastest rates in years, and measures of bullish options exposure are surging.
/jlne.ws/3Asmxhl
Hong Kong's AMTD Called 'Mother of All Shorts' Is Risky Stock Trade
Ishika Mookerjee and John Cheng - Bloomberg
By any conventional measure, AMTD Digital Inc. is one of the world's most overvalued stocks.
The barely profitable Hong Kong financial services firm trades at more than 400 times its latest fiscal-year earnings, compared with about 6 times for Goldman Sachs Group Inc., according to Bloomberg-compiled data. Even after tumbling more than 90% from its peak in early August, AMTD Digital's 2,221% gain since listing in New York five weeks ago rivals GameStop Corp.'s surge at the peak of meme-stock mania.
/jlne.ws/3w8KXd6
FX Activity Surges 8% as War and Inflation Risks Fuel Volatility; Average daily trading volumes climbed 8% year-on-year in July; Pickup in activity has come amid increase in market volatility
Mary Biekert - Bloomberg
The amount of foreign-exchange transactions has leaped over the past year amid a surge in market volatility that's been fueled by increased geopolitical turbulence and big shifts in monetary policy as central banks around the world battle to contain inflation. Average daily trading volumes in July jumped around 8% from a year earlier, according to figures from CLSMarketData, an FX data and analytics service. The average daily volume of transactions submitted to CLS was around $1.879 trillion. That's up from $1.745 trillion in July 2021, although below the June 2022 number of $1.98 trillion. Volumes in forwards helped drive the annual advance, rising 66% year-on-year, while the amount conducted in spot rose 12% and swaps were up 2%.
/jlne.ws/3ppQ70E
How Much Do Direct-Indexed Portfolios Really Veer From Their Benchmarks?
Lewis Braham - Barron's
Managing clients' performance expectations is one of a financial advisor's most important jobs. Accuracy and honesty about the potential risks and rewards are essential to help clients achieve their goals on time. To help, advisors can show clients the past returns and volatility of any mutual fund or ETF in their portfolios to illustrate how much clients could gain or lose in different market environments. But managing expectations gets trickier when a client has a unique portfolio in a direct-indexed strategy. Direct-indexed portfolios are privately managed accounts that seek to mimic a benchmark. But unlike funds, they can also be customized to suit an individual investor's particular goals, which can include maximizing after-tax returns, diversifying a high-net-worth investor's portfolio, and executing a specialized environmental, social, and governance strategy.
/jlne.ws/3K1a4o6
Oil prices turn more volatile as investors exit the market
Stephanie Kelly and Noah Browning - Reuters
Traders and fund managers have left crude oil markets in recent months, dropping activity to a seven-year low amid the worst global energy crisis in decades as investors become unwilling to deal with persistently high volatility.
The exodus of participants, especially hedge funds and speculators, has made daily price swings far greater than in previous years, making it harder for companies to hedge against physical purchases of oil. The volatility has harmed companies that need energy market stability for their operations, which includes oil-and-gas companies, but also manufacturing and food-and-beverage industries.
/jlne.ws/3AtaC2Z
Bed Bath & Beyond surges again on Wednesday, continuing August meme rally
Jesse Pound - CNBC
The wild trading in Bed Bath & Beyond showed no signs of slowing down on Wednesday, as the retail stock spiked on heavy volume while social media users cheered on the meme stock.
Shares of the challenged retailer surged 22%, building on its enormous gains for August. Bed Bath & Beyond has already seen five days in August with moves greater than 20%, and ended Tuesday up nearly 300% for the month.
/jlne.ws/3PxTE7E
| | | | | | Exchanges | | | FX Derivatives: Introduction of new cash-settled FX Futures on Emerging Markets currency pairs
Eurex
Introduction: The Management Board of Eurex Deutschland took the following decisions with effect from 10 October 2022: Introduction of five new cash-settled FX Futures on Emerging Markets currency pairs; Amendment of the Contract Specifications for Futures Contracts and Options Contracts at Eurex Deutschland pursuant to Attachment 2.
/bit.ly/3wc7buO
Expansion of Listing Schedule of all Monday, Wednesday and Certain Friday Weekly Options on E-mini Standard & Poor's 500 Stock Price Index Futures Contracts
CME Group
Effective Sunday, September 11, 2022, for trade date Monday, September 12, 2022, and pending all relevant CFTC regulatory review periods, Chicago Mercantile Exchange Inc. ("CME" or "Exchange") will expand the listing schedule for the Monday, Wednesday, and certain Friday Weekly Options on Emini Standard & Poor's 500 Stock Price Index Futures contracts (the "Contracts") for trading on the CME Globex electronic trading platform ("CME Globex") and for submission of clearing via CME ClearPort, as more specifically described in the table below.
/bit.ly/3Qxwobc
MIAX Options Exchange - Options Exchanges - Inadvertent message sent - All systems operating normally
MIAX
Technical Alert, Trading Alert, Regulatory Alert. Please be advised that the MIAX Options Exchange inadvertently sent a StartofTest message this morning at 5:28 AM after the normal StartofSystem message. Please ignore this message, all systems are operating normally. https://bit.ly/3OTE5YF
| | | | | | Regulation & Enforcement | | | U.S. SEC charges 3 people with insider trading tied to Equifax hack
Noor Zainab Hussain - Reuters
The U.S. Securities and Exchange Commission said on Tuesday it had charged three individuals for illegally tipping and trading in the securities of Equifax Inc (EFX.N) before the company announced it had experienced a massive data breach.
Equifax, a provider of consumer credit scores, revealedin September 2017 that personal details of as many as 143 million U.S. consumers were accessed by hackers between mid-May and July of that year, making it one of the largest data breaches in the United States.
/jlne.ws/3C9JqHP
| | | | | | Strategy | | | Incorrect Economist Views Help Traders Bet on Data-Release Days
Simon White - Bloomberg
Economic surprises imply that economists in the aggregate are incorrectly gauging where we are in the cycle. This could give valuable insight on potential market positioning before data releases.
US economic surprises have been falling, but we can glean additional information about what the consensus is inferring by looking at a breakdown in the surprise indexes.
/jlne.ws/3QT2jma
Stock Market Rally, Investing Strategy: UBS Says to Buy the Dip
James Faris - Business Insider
A dozen strategists at one of Wall Street's more bearish firms think that this stock market rally is set to continue â at least in the near term.
The S&P 500 is up 17% from its mid-June lows, and 12 UBS global macro strategists led by strategy chief Bhanu Baweja wrote in an August 15 note that the index could rise another 7% to 4,600 by the end of the third quarter.
"The majority of this rebound may now be done," Baweja wrote in the note. "But not all of it."
/jlne.ws/3c5xhJm
| | | | | | Education | | | The VIX Index and Muted Volatility in 2022
Scott Phillips - Cboe
Despite increased realized volatility in the equity market during the first five months of 2022, the response of the VIX Index was truly anomalous. Lavaca Capital's Scott Phillips breaks it down in this guest blog.
The Cboe Volatility Index (VIX Index) is a calculation designed to estimate the 30-day expected volatility of the U.S. stock market by aggregating the weighted prices of S&P 500 Index call and put options over a wide range of strike prices. Options traded on the S&P 500 Index that have maturities between 23 and 37 days are used to calculate the price of the VIX Index. While this measurement gives us a look into the market's expectations of future volatility, it does not paint a complete picture.
/jlne.ws/3QDrTw8
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