| April 25, 2022 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
Cboe To Launch New Equity Index Products; FIA hits record volumes; SEC Kicks Off Scholars Program Applications
JohnLothianNews.com
"Alex Perry's Optionstopia" takes a look at this week's options news highlights: Cboe Europe's New Equity Index Products; FIA hits record volumes; SEC Kicks Off Scholars Program Applications
John's Take - Cboe Empowers Scholarships Surprise Ceremony Gets a Closer Look
TERM OF THE WEEK: This week's Term of the Week presented by Euronext Knowledge Centre is Intrinsic Value of Cash Settled Options.
Watch the video »
| | | | | | Lead Stories | | | Funds forge all-time bullish bets in CBOT grains and oilseeds
Karen Braun - Reuters
Global grain and oilseed supplies began noticeably contracting nearly two years ago and funds have been long Chicago futures for most of that time. But recent events, particularly the conflict in Ukraine, have finally sent speculators' bullish views to unprecedented levels.
Money managers' combined net long position in CBOT grains and oilseeds, including Kansas City and Minneapolis wheat, reached an all-time high of 838,641 futures and options contracts on April 19. That edged the old record set in August 2012.
/jlne.ws/3EJAQP4
French Election Respite From Anxiety Over Rate Hikes, Volatility Will Be Brief
John Authers - Bloomberg
What exactly happened last week? Attention was monopolized by a nasty slide for U.S. stocks into Friday's close. A number of history's most notorious crashes occurred on a Monday reopening after a bad Friday, so it's understandable this provoked concern:
Very poor openings for stock markets in Japan and Hong Kong and a new slide bringing mainland Chinese shares to the lowest levels in almost two years won't do anything to cheer the mood. But why did we see such a reverse in stocks at the end of the week?
/jlne.ws/3vbVG6K
Stoxx 600: Europe Company Earnings Results This Week Kick Off as Stocks Stutter
Jan-Patrick Barnert - Bloomberg
Europe rings in its busiest reporting week so far this year, with almost a third of Stoxx Europe 600 Index companies updating on earnings and sales as investors look for a sense of direction for stocks.
The companies reporting, from Roche Holding AG to HSBC Holding Plc and Remy Cointreau SA, have combined market value of 4.5 trillion euros ($4.9 trillion), equivalent to about half of the benchmark index, according to data compiled by Bloomberg. Thursday is set to be particularly lively, with almost 70 companies coming out with their numbers.
/jlne.ws/3MvrYQ0
Hedge Fund Cuts China Stocks to Zero in Year Worse Than 2008
Bloomberg
As China's markets gyrate following Covid outbreaks and Russia's invasion of Ukraine, one of the nation's best-performing macro hedge funds is bracing for more pain.
Shanghai Banxia Investment Management Center, which topped local rankings in 2020, has cut its stock exposure to zero in anticipation of a worsening economy and further declines in equities, founder Li Bei said. The fund, which manages more than 5 billion yuan ($785 million), has also closed almost all short positions in commodities after rising prices led to losses.
/jlne.ws/3rPH5f5
The 10-Year Treasury Yield Is Nearing 3%. That's a Bad Omen for the Stock Market.
Randall W. Forsyth - Barron's
Interest rates may finally be getting real.
To investors with a sense of history, the near-zero and even negative interest rates of recent years might have seemed unreal, and indeed were unprecedented in the 5,000 years of recorded history of such matters. While the recent rise in bond yields has put rates back within the range of their historic norms, they are still under the level of inflation, anticipated or current, meaning that they're negative in real terms.
/jlne.ws/3rTzXhJ
Oil prices paralysed between Russia sanctions and China lockdowns
John Kemp - Reuters
Portfolio investors purchased petroleum last week for the first time in four weeks, but overall positioning remained subdued by the high cost of margin and large uncertainties surrounding both crude supply and demand.
Hedge funds and other money managers bought the equivalent of 14 million barrels in the six most important petroleum-related futures and options contracts in the week to April 19.
/jlne.ws/3MwNx2i
| | | | | | Exchanges | | | A New Option For SPX Traders? â Cboe Releases Additional S&P 500 Weekly Options
Cboe - Benzinga
In 2021, the market recorded over 9.78 billion options contracts traded, 32% above the 2020 record of 7.47 billion contracts and more than double the 9.8 billion in 2019.
This influx of options contracts might have been a spillover from the meme stock mania that catapulted GameStop Corp. and AMC Entertainment Holdings Inc. to unprecedented heights, a frenzy that ultimately spewed both outrage and elation across Wall Street.
/jlne.ws/3EMJwnT
Special Intra-day Margin Call in respect of the day following Labour Day and the day following the Birthday of the Buddha
HKEX
The Traded Options Market will be closed for business on 2 May 2022 and 9 May 2022. In order to assure that safeguards are in place against potential market risk that may arise during the aforesaid period when some of the major markets are open, the Clearing House has decided to make a special intra-day margin call in respect of all open positions on Friday, 29 April 2022 and Friday, 6 May 2022.
/bit.ly/3xQDlhb
| | | | | | Regulation & Enforcement | | | SEC fears may cement Vanguard monopoly
Steve Johnson - Financial Times
Fears that some investors are cross subsidising others may prevent rival fund managers from being allowed to replicate a unique tax-efficient fund structure created by Vanguard.
Vanguard's "exchange traded fund-as-a-share-class" structure allows the Pennsylvanian powerhouse to operate a mutual fund and a sister ETF as essentially the same vehicle, generating superior tax efficiency and economies of scale.
/jlne.ws/3Kdb1Iq
| | | | | | Strategy | | | The stock market selloff still has another 20% to go, says the godfather of liquidity
Steve Goldstein - MarketWatch
As the meat of earnings season begins, it's worth noting what investors have learned so far. The short version is, apart from a few isolated companies (cough, Netflix, cough), not a whole lot: the projected rise in S&P 500 earnings per share this year stands at 8.9%, compared with 8.1% at end of March, according to S&P Global Market Intelligence.
But even as expectations toward earnings have improved, the market has struggled, with the S&P 500 down 6% this month so far. So what's going on?
/jlne.ws/3LeeuI3
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