| November 12, 2018 | | | | | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | Cyber Security: If You Are Not Compliant, You Are Not Secure
Jeff Bergstrom - John Lothian News
If there is one phrase dreaded by all types of businesses in the US, it has to be "government regulation." So it was surprising to hear nearly all the speakers at the 2018 Global Cyber Security Initiative meeting last Friday agree that what their industry really needs is more regulation. That almost unbelievable claim does come with a number of caveats, however.
The afternoon session began with Dr. Sujeet Shenoi, F.P. Walter Professor of Computer Science at the University of Tulsa, who scared the crowd with stories of just how vulnerable our cyber-infrastructure is. This point has been made to us before, but it has more weight coming from someone who has personally cracked numerous computer-based systems over the years and is telling you how easy it was to do. Not because he is a black hat (aka a cyber bad guy) - rather, he is a white hat who has learned that the best way to protect a system is to learn how to crack that system to understand its vulnerabilities.
/goo.gl/Y6iSQ3
| | | | | | Lead Stories | | | What's Behind the Spike in VIX ETFs?
Nathan Reiff - Investopedia
The world of exchange-traded funds (ETFs) and similar products has grown so large and particular that one can find multiple investment vehicles for just about any bet related to the markets. In some cases, ETFs have a broad mandate, such as an entire sector or even a large index of names. In other cases, the focus of the exchange-traded product can be narrow and esoteric. Exchange-traded products that rise along with the Cboe Volatility Index (VIX) likely fall within the latter category. In recent weeks, these products have proven to be highly lucrative as Wall Street fear levels have grown.
bit.ly/2DCO7MA
When This Liquidity Bubble Pops, We'll Face The Biggest Crisis Yet
John Mauldin - Forbes
Debt is a huge a drag on the economy. It's especially true after it rises over the 80 to 90% of GDP level.
US government debt is now 106% of GDP. And if you add state and local debt, total government debt is over 120% of GDP.
Shades of Italy and Greece.
bit.ly/2DzTEU9
Bullish Path for Stocks Paved on Midterms, Janus Henderson Says
Adam Haigh - Bloomberg (SUBSCRIPTION)
Stocks in the U.S. will set fresh highs after midterm elections contained the prospect for any sharp breakout in inflationary pressures that might have sapped taking-risk appetite, according to Janus Henderson, which oversees $378 billion.
The Federal Reserve will be able to maintain its gradual tightening path and real rates will continue ticking up following last week's midterms that created a dividend Congress, a more favorable environment for riskier assets than before the vote, said Ashwin Alankar, the global head of asset allocation at Janus Henderson.
/bloom.bg/2DB8vxA
Trump's New Scapegoat for Market Woes Is Democrat-Led Inquiries
Justin Sink - Bloomberg (SUBSCRIPTION)
President Donald Trump turned to a new explanation for stock market declines Monday, blaming scrutiny his administration could face from Democrats who recently won the majority in the House of Representatives.
"The prospect of Presidential Harassment by the Dems is causing the Stock Market big headaches!" he tweeted Monday.
/bloom.bg/2DALknm
****JB: Typical of all presidents. Markets go up it is because of their genius. Markets go down it is the other guy's fault.
GE Rout Deepens as CEO Flops in Attempt to Soothe Shareholders
Thomas Black - Bloomberg (SUBSCRIPTION)
General Electric Co.'s new chief executive officer tried to reassure investors but the effort failed as a deep rout worsened and Wall Street's confidence in the beleaguered company's future continued to collapse.
The shares tumbled as much as 10 percent Monday as Larry Culp expressed a "sense of urgency" in cutting debt and selling assets. Speaking publicly for the first time since the company spooked investors with its third-quarter earnings report Oct. 30, he also said GE's troubled power division had yet to hit bottom.
/bloom.bg/2DALJWL
| | | | | | Exchanges and Clearing | | | Fixed Income Highlights - November 2018 edition
Eurex Exchange
Volumes in core European rate futures and options increased substantially in light of the recent equity market downturn and continued geopolitical risks. Yields for 10-year German government bond debt moved between 35 and 55 basis points over the past month. While this has led to an increase in implied and realized volatility, we have failed to break out of the 4-6% corridor for any meaningful length of time. Volatility spikes have largely remained short-lived with program sellers fading the move higher in bund volatility.
bit.ly/2qPNPKd
Euronext beats profit expectations, earnings from growth projects disappoint
Noor Zainab Hussain and Huw Jones - Reuters
Euronext's (ENX.PA) acquisition of the Irish Stock Exchange and a higher number of companies listing helped the pan-European exchange beat quarterly profit estimates, although it warned some of its recent growth initiatives had failed.
/reut.rs/2DyP7l3
| | | | | | Strategy | | | What Volatility Spikes Mean for Traders Now
Jim Iuorio - CME Group
There are two methods of measuring equity volatility that I most often use. The CME equity volatility tools on QuikStrike which measures implied volatility in varying duration CME options contracts, and the more commonly used, but slightly less informative VIX index.
bit.ly/2DARtQn
'Trap door under the market' could slash S&P by two-thirds, warns fund manager
Shawn Langlois - MarketWatch
John Hussman is at it again.
Of course, the fund manager's detractors would be quick to tell you, he's been at it again, wrongly, since the Dutch East India Company went public.
OK, it hasn't been that long. And Hussman has earned some street cred along the way with some strong calls, including nailing the market collapses in 2000 and 2008. In fact, his fund surged to $6.7 billion in assets under management in 2010, before the weight of his misfires brought that figure down to $360.5 million over the ensuing seven years, according to the Wall Street Journal.
So, why do we care about his latest end-of-times outlook?
/on.mktw.net/2DAtmRO
Will Stock Market Keep Falling? S&P 500 May Test Oct Lows: BofA
Lu Wang - Bloomberg (SUBSCRIPTION)
A two-week bounce in U.S. stocks failed a key technical level, a sign that the S&P 500 may test its October lows, according to Bank of America Corp.
While the benchmark index ended last week with another rally of more than 2 percent, the ascent faltered around 2,815, a level that halted a similar recovery attempt in mid October and represented a 61.8 percent retracement of the entire decline from the September peak. A daily sell signal on Friday based on Tom Demark's market-timing indicators suggested that resistance is likely to hold, said Stephen Suttmeier, BofA's technical analyst.
/bloom.bg/2DAHpqK
Surging Dollar And Sinking Gold Weighing On Investors' Minds
Nasdaq
U.S. equity market opened lower on lighter than average trading volumes as we observe Veterans Day. The equity markets are open while bond traders get the day off. Last week we saw the markets rally nicely post-midterm elections on higher trading volumes, only to give back some of those gains to end the week. Away from political intrigue, a number of items continue to weigh on investor's minds include a surging dollar and sinking gold. Oil is trading slightly higher after closing lower everyday for the past two weeks. A number of large-cap Tech and Consumer names report this week which could help shape the market direction in this last full week of trading before Thanksgiving.
bit.ly/2DARnrQ
| | | | | | Miscellaneous | | | A 37 Million Share Print Took Wall Street by Storm: Taking Stock
Arie Shapira - Bloomberg (SUBSCRIPTION)
It seems like only yesterday when I published a Taking Stock column titled "A $100 Billion Giant Is Spiraling and No One Cares" that issued an unofficial code red on shares of General Electric -- except that it was actually a month and a half ago, when GE was trading well above $11.
The industrial conglomerate that's been a bastion of corporate America for well over a century has, since then, erased about a quarter of its market value (currently down over 1% pre-market to $8.48) on worries over cash-flow shortfalls, rising liabilities, deteriorating results at several business segments and even a federal accounting probe, among other concerns.
/bloom.bg/2DzViFr
European Politics Only Has Cliffhangers, No Finale for Equities
Justina Lee - Bloomberg (SUBSCRIPTION)
What's worse than a political showdown for investors? A battle with no end in sight.
That's what seems to be in store as two of the region's biggest political risks -- Brexit and Italy -- return to the headlines this week. In the case of Brexit, a deal looks out of reach, once again, as support for the U.K. Prime Minister's proposal crumbles. As for Italy, it has until Tuesday to submit a fresh budget or risk disciplinary action from the European Union, with the country's populist leaders showing no signs of backing down.
/bloom.bg/2DBUJep
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