| August 27, 2018 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | |
The Spread - Thin Crust Pizza - 8/24
JohnLothianNews.com
Most of the time, we go for a smattering of everything on "The Spread." But this week there was a story that got a lot of clicks and stirred up the pot, so we thought we'd just address the issues that arose from that.
Watch the video and see the stories referenced here »
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Monday Mutterings
Spencer Doar - JLN
There was a breakthrough in trade negotiations with Mexico today (link to Fox Business). The two sides agreed to a new pact called the United States Mexico Trade Agreement - Trump said the NAFTA name is done. Next up, negotiations with Canada.
Breaking with convention, markets are up AND spot VIX is up today (there hasn't been much effect on the curve though). Also, gold is up.
A recent study of financial literacy of the average American was not encouraging. When asked "What happens to bond prices when interest rates rise?" with potential answers of bond prices don't change, bond prices rise or bond prices fall, only 25 percent answered "C."
Here's a crypto trading survey question and results (via The Options Insider) - "Which #Crypto product you'd like to see listed on a major venue next?" The responses:
68% - Bitcoin options
8% - Ripple options/futures
18% - Ether options/futures
6% - Litecoin options/futures
Here's a photo of John McCain and Joe Lieberman near the corn options pit at the CBOT in 2008 (via Flying Debris).
| | | | | | Lead Stories | | | The Big Hedge-Fund Strategy That Isn't Working
Laurence Fletcher - WSJ (SUBSCRIPTION)
Following trends in financial markets was once one of the most profitable investment strategies around. Now the approach is being battered as cheap replica funds crowd into the space.
Performance among the roughly $300 billion in hedge funds that largely use so-called trend-following strategies has been abysmal. An investor buying into these funds at the start of 2011, for instance, and holding through July this year would have lost 3.4% on average, according to HFR. Over the same period the S&P 500 is up 124%.
/on.wsj.com/2PICq9Z
Hedge funds seek review of market data fees, 'pickles' and all
John McCrank - Reuters
The two main hedge fund trade groups have joined a growing chorus of stock market participants asking U.S. regulators to reign in "unreasonable" data fees charged by some exchanges, which they said restrict trading and harm competition.
/reut.rs/2MyWNIU
****SD: Take note - if you want to draw attention to your comment letters or regulatory requests, use analogies like this.
Nasdaq tops 8,000 milestone with help from Apple, Amazon and Netflix
Adam Shell - USA Today
Powered by big gains in popular technology companies like Apple, Amazon and Netflix, the Nasdaq composite barreled through the 8,000 milestone for the first time Monday and hit a new all-time high.
/usat.ly/2BR8HJ3
****SD: Highs beget highs. WSJ on the record here.
Tesla shares dip 3 percent after Musk abandons buyout
Joshua Franklin and Sonam Rai - Reuters
Shares in Tesla Inc (TSLA.O) fell just under 3 percent on Monday after Chief Executive Elon Musk abandoned his plan to take the electric carmaker private, with analysts saying the company needed new blood among senior management to prop up its standing with investors.
/reut.rs/2BSj0N2
****SD: No surprise, TSLA options have been busy of late. As it's still a ~$315-320 stock, that's some high notional activity. (Today, AMD has already seen 600k+ contracts trade, but that's a $25 stock.)
| | | | | | Exchanges and Clearing | | | India's Axis Bank arm offers trading in commodity derivatives
Reuters
The stock-broking arm of India's Axis Bank on Monday began offering commodity derivatives trading on the Multi Commodity Exchange platform, making it the first subsidiary of a bank to offer the service.
/goo.gl/jwJEcn
****SD: Economic Times on the launch here.
| | | | | | Regulation & Enforcement | | | SEC Bars Advisor Over Allegedly Misleading Investors
Alex Padalka - Financial Advisor IQ
The SEC has barred a California investment advisor for allegedly misleading investors about putting their funds into growth stocks but instead primarily engaging in options trading and losing more than $2.2 million, according to a cease-and-desist order published by the regulator.
/goo.gl/RSKzqh
****SD: More coverage of last week's enforcement action
| | | | | | Strategy | | | Holiday Hangover Seen Gripping EM Assets as Turks Return to Work
Netty Idayu Ismail, Justin Villamil and Lilian Karunungan - Bloomberg (SUBSCRIPTION)
Options traders most bearish on lira, rand, ruble, real in EM; Lira sinks, while Mexico's peso advances on Nafta optimism
/bloom.bg/2PCMTno
Why Small-Caps Could Rally Through Late September
Todd Salamone - Schaeffer's Investment Research
In last week's concluding remarks, I focused on the sentiment backdrop (an unwinding of short-term pessimism) being supportive of equities on the heels of the Fed holding rates steady earlier in the month and a blockbuster earnings season. My one concern was from a technical perspective when looking at multiple indexes and exchange-traded funds (ETFs).
bit.ly/2LwbOpl
| | | | | | Miscellaneous | | | Field for ECB top job widens after Weidmann setback
Jim Brunsden, Mehreen Khan and Claire Jones - Financial Times (SUBSCRIPTION)
Much of the speculation over who will succeed Mario Draghi as president of the European Central Bank next year has centred on one man: Jens Weidmann of Germany.
/on.ft.com/2oljn9z
****SD: Who will inherit Draghi's bazooka?
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Editor
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Editor
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