| October 30, 2024 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | U.S. Treasury Secretary Janet Yellen highlighted the rise in fraud across the banking sector, noting it has become a significant, widespread issue, Bloomberg reported. Speaking at an American Bankers Association event, Yellen mentioned an increase in fraud involving government checks and emphasized that the Treasury Department is leveraging artificial intelligence to improve fraud detection and response, which has significantly enhanced their efforts.
| | | | | | Lead Stories | | | Ermotti Says Brace For Volatility as Markets Expect Trump Win
Alessandro Speciale - Bloomberg
Investors around the world are betting on a Donald Trump victory in US elections next week, but whatever the outcome more volatility is in store, UBS Group AG Chief Executive Officer Sergio Ermotti said.
As markets are pricing in a Trump win, that would be "a classic sell-on-the-news event," Ermotti said in an interview with Bloomberg Television's Francine Lacqua. On the other hand, "if Kamala Harris wins, some of the trades that are ongoing for Trump will probably have to be reconsidered and therefore they are going to create rotations in the market."
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Dollar Hedging Costs Surge to Most Since 2022 on Election Risks; One-week measure of implied volatility near a two-year high; As dollar rallies, traders eye fallout from presidential vote
Carter Johnson, George Lei, and Anya Andrianova - Bloomberg
The price to hedge against swings in the US dollar surged to the highest in nearly two years as traders prepare for the risk of big market moves after next week's presidential election.
A measure of one-week implied volatility on the Bloomberg Dollar Spot Index rose on Wednesday to the highest since December 2022, when recession fears briefly raced through financial markets. That indicates traders are preparing for large swings in the currency against major peers like the euro, yen, Chinese yuan and Mexican peso, pushing up the cost of options that protect against such moves.
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CME Wins Futures Commission Merchant Approval, Sparking Backlash
Katherine Doherty - Bloomberg
CME Group Inc. won approval to operate its own futures commission merchant, a move that received swift criticism from some market participants. The Chicago-based exchange operator said it received approval from the National Futures Association to establish an FCM, according to a statement Tuesday. While CME says it remains "committed" to the FCM model, which is responsible for accepting orders to buy or sell futures contracts, options on futures and money to complete customer orders, there is potential for change. "As our industry continues to evolve, our FCM will ensure CME Group is in a strong position to quickly adapt to our clients' changing business needs," Chief Executive Officer Terry Duffy said in the statement.
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Investors' 'fear of missing out' drives gold demand to record high; Buyers clamour for gold-backed ETFs as central banks scale back purchases of the precious metal
Leslie Hook - Financial Times
Investors' "fear of missing out" on gold's rally has sparked record demand for the precious metal, even as high prices push central banks to scale back their purchases. The value of global demand passed $100bn for the first time in the third quarter of this year, according to industry body the World Gold Council, driven mainly by investor buying. The volume of global gold demand also rose to a record in the same period, up 5 per cent to 1,313 tonnes.
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US Bitcoin ETFs Get Third-Highest Inflow With Token Near Record
Sidhartha Shukla - Bloomberg
US exchange-traded funds investing in Bitcoin saw an $870 million net inflow, their third-highest daily haul, as the digital asset flirts with a record high amid speculation about the potential outcome of the US election. The subscriptions on Tuesday lifted year-to-date inflows for the group of 12 funds to more than $23 billion, according to data compiled by Bloomberg. The issuers of the ETFs include the likes of BlackRock Inc. and Fidelity Investments.
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Goldman Sachs managing director makes the case for a modified low-volatility ETF; Laurene Azoulay describes an indexing approach that enables U.S. investors to broaden their global exposure with a low-volatility stock-selection strategy that encompasses three other factors
Philip van Doorn - MarketWatch
A low-volatility approach to stock-portfolio management can give investors a "smoother ride" over the long term by avoiding emotional reactions during bull markets, according to Laurene Azoulay, a managing director at Goldman Sachs.
The Goldman Sachs ActiveBeta World Low Vol Plus Equity ETF follows a low-volatility indexing approach that also encompasses quality, value and momentum factors. The exchange-traded fund also helps U.S. investors broaden their horizons, because about one-third of its portfolio is invested in developed markets outside the U.S.
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| | | | | | Exchanges | | | Schwab to Expand 24-Hour Trading With Individual Stocks, More ETFs
Hannah Miao - The Wall Street Journal
Charles Schwab said it is expanding 24-hour weekday trading, in the latest industry move toward around-the-clock investing. The brokerage plans to add individual stocks in the S&P 500 and Nasdaq-100, and hundreds of additional exchange-traded funds, to its overnight session. Schwab said it will begin rolling out the expanded overnight access to a small group of customers, with full client access expected in 2025.
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| | | | | | Strategy | | | Hedge Funds Turning to Singapore Dollar to Make US Election Bets; Cost to speculate on city-state's currency has surged; Option traders bet on dollar to rise against Singapore peer
David Finnerty - Bloomberg
The Singapore dollar is emerging as a popular US election trade for option investors.
The premium to purchase a one-month call option, which increases in value if the dollar gains against the Singapore equivalent, compared to a downside put, is near its highest since May 2023. On the Depository Trust & Clearing Corporation so far this week, all notional trades near or over $100 million on the currency pair have been call options, with maturities up to Jan. 22.
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Why an Underperforming Market Could Be in Store; The VIX is predicting significantly higher volatility over the next 30 days
Rocky White - Schaeffer's Investment Research
The CBOE Volatility Index (VIX) is sitting right around the 20 area. While this level is not extremely high, it is elevated compared to the 20-day historical volatility (HV) of the S&P 500 ETF (SPY). Plus, the VIX recently closed above 20 while the SPY's 20-day HV was below 10 - an uncommon occurrence.
For those unfamiliar with the VIX, it's calculated using S&P 500 Index (SPX) options and measures the market's expected volatility for the SPX over the next 30 calendar days, or roughly 20 trading days.
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| | | | | | Miscellaneous | | | How Rahul Kambariya Gives Back to the Yogi Divine Society
Cboe
When Rahul Kambariya first moved to Toronto, Canada in 2013, he was lucky to find an inspiring community within the Yogi Divine Society. Not only did the Yogi Divine Society give him a sense of belonging in a new country, but it also helped him get his start in a career he loves.
The Yogi Divine Society is a humanitarian organization rooted in the Hindu Swaminarayan tradition. Founded in 1966 by Hariprasad Swamiji Maharaj, the Yogi Divine Society is currently guided by Prabodhjivan Swamiji Maharaj. Atmiyata - the motto of the organization that encompasses harmony, brotherhood, love and help - guides volunteers of this organization to unconditionally support those in need.
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Russian court fines Google $20,000,000,000,000,000,000,000,000,000,000,000; Don't hold your breath Putin
Iain Thomson - The Register
A Russian court has ruled that Google owes Russian media stations around $20 decillion in fines for blocking their content, and the fines could get bigger. To put that into perspective, the World Bank estimates global GDP as around $100 trillion, which is peanuts compared to the prospective fine. Google might be one of the most valuable businesses on the planet, but even if Sundar Pichai rummages around the back of the sofa he won't be able to raise the funds to pay the penalty.
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***** The comic strip XKCD kinda puts this in perspective. They use a bigger number but close enough, I think, to get the point across how ridiculous this is. ~JB
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