| April 28, 2017 | "Irreverent, but never irrelevant" | | | | John Lothian
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John Lothian News | |
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D is Data: And That Might Be The Future
Jim Kharouf, John Lothian and Spencer Doar - JLN
The sold-out FinTech Exchange conference, hosted by Barchart, was largely about data - what to do with data, how exchanges are capturing new data and how to trade it. That, on its surface, isn't particularly new.
But the infrastructure to capture all kinds of data is now developed. The CME Group's Julie Armstrong Menacho colorfully outlined how the exchange has migrated all of its historical data onto the cloud, giving customers greater access to it, along with a growing list of partners who provide alternative data sets like satellite images of oil storage facilities or social media sentiment. CBOE's Catherine Clay also pushed the idea of not just more data for customers but a suite of services that help customers use it and trade it. Barchart, for its part, is adding more such data as well, particularly in the grains space, where customers can view grain production indexes from one county to the next. And there were a slew of companies telling the audience what they could do with it.
The fintech bug has caught on with regulators too. FINRA is firmly in the cloud and new CFTC Acting Chairman Christopher Giancarlo has signaled his desire to make the agency a more technologically adept and cloud-centric institution. Also, the SEC's Consolidated Audit Trail is a cloud endeavor.
This conference, now in its third year, could be called the "Dudes in t-shirts, jeans and sport coats." It attracted 500-plus attendees. Slick events such as this in the fintech space are helpful because, as CBOE's John Deters pointed out, innovation is no longer concentrated at large centralized corporations, making it harder to know what is being developed and where. It's also difficult due to the all encompassing nature of the word "fintech." The term encapsulates everything from platforms analyzing credit risk to options analytics software.
As more exchanges move further into the data space, there is a good news and bad news story. As speed continues to remain important, traders are looking for more sophisticated ways to trade using data. The Intercontinental Exchange has made a multi-billion dollar bet on it. But there are limits, as highlighted in today's FT piece on CME which pointed out that large customers were consolidating data screens to save money, thus lowering data revenues by 5.5 percent in Q1.
In short, big data and alternative data and new tools are great but there is only so much the market is willing to pay for them.
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One Hundred Million Here We Come
By John J. Lothian
MarketsWiki is getting ready to pass the 100 million page view mark. We crossed the 99 million mark last night. Launched on January 11, 2008, MarketsWiki has been averaging about 1.5 to 2 million pages per month the last couple of years.
In its first year MarketsWiki saw 1 million page views. The second it took less than a year for the 3 millionth page view to occur.
Here is a list of the most popular pages to date:
Main Page MarketsWiki Page of the Day CME Group, Inc. Chicago Board Options Exchange Bats Global Markets, Inc Job Postings Intercontinental Exchange Group Inc. Eurex Advantage Futures BOX Options Exchange
There have been 205,508 page edits since the project was launched and we now have over 22,000 pages of content.
I would like to thank our sponsors for helping make this site a reality, the JLN team for their dedicated support of the site and all those who have contributed to its success.
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Purdue Snags $50 Million in Deal to Peddle Online Kaplan Degrees
Laura Colby - Bloomberg
For-profit college chain will convert into a not-for-profit; Former Governor Mitch Daniels makes foray into cyber education
How do you turn a for-profit college into a nonprofit? Partner with a public university -- and pay $50 million for the privilege.
/goo.gl/u2EVy5
***** My alma mater has done well under the presidency of former Indiana Governor Mitch Daniels.
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I would rather shine shoes than be a banker
Lucy Kellaway - FT
Last Thursday, for the first time in my life, I had my shoes shined. I sat on a stool outside St Mary-le-Bow on Cheapside and a man crouched at my feet and got busy with the Kiwi polish, rags and brushes.
/goo.gl/Iu4O0y
***** There is contentment in simplicity.
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Facebook Combats Coordinated Campaigns to Misinform the Public
Sarah Frier - Bloomberg
Fraudsters spreading falsehood on social media are getting more sophisticated. Facebook Inc. says it's rising to the challenge.
/goo.gl/UGZJH1
****** Where is the SEC on this?
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The Fearless Girl Is Worth $7.4 Million in Free Publicity for State Street
Jeff Green - Bloomberg
Statue commissioned to emphasize bank's board diversity push[; Marketing exposure equal to 28% of firm's 2016 ad spending
In the 51 days since Fearless Girl took her defiant place in front of Wall Street's charging bull, she's never lacked for company.
/goo.gl/yvnggr
****** Bronze is worth more and more.
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The Scientists Fighting to Save Us From a World Without Coffee; Climate change is threatening your morning caffeine fix.
Marvin G Perez and Fabiana Batista - NY Times
While Washington debates whether climate change is a hoax or an imminent threat, the world coffee industry is not waiting for the American government to take action to protect its business.
/goo.gl/85Y1sz
****** Somewhere Allan Schoenberg is quivering.
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Thursday's Top Three
As the British divorce from the EU slogs on, more and more companies are looking for their own exit plan. Yesterday's top story pertained to another potential move, ICE says being asked to shift operations from London to continent. Our second most popular story dealt with some of the potential fallout from the recent HFT uber-merger, Nasdaq warns of potential revenue impact following Virtu-KCG tie up.
Our third place finisher was a rarity as it defended big paychecks from speaking engagements, Stop Bashing Obama Over Paid Wall Street Speeches.
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MarketsWiki Stats
99,040,390 pages viewed; 22,466 pages; 205,508 edits
MarketsWiki Statistics
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| Lead Stories | CME spooks investors with warning on market data; Largest exchange company signals that the boom in selling market data may be easing
Gregory Meyer - FT
Futures exchange operator CME Group has encountered headwinds in efforts to sell more market data to customers seeking to cut their costs.
/goo.gl/vRejjt
**JK: Love the picture from 1982 here.
How Trump and Brexit Could Change Global Bank Rules; As two big economies chart a new course, some fear "regulatory arbitrage."
Silla Brush and Alexander Weber - Bloomberg
This is how a race to the bottom can start. In Washington, President Donald Trump has vowed to roll back the financial regulations passed after the 2008 crisis. In London, Prime Minister Theresa May, facing a possible exodus of bankers as Britain quits the European Union, has said she might fight any "punitive" trade measures from the EU with tax cuts or policy changes to attract investors and companies. At the same time, some EU member states could consider relaxed rules to entice London-based firms. In Brussels, Europe's top regulators are angling to soften the latest round of international banking standards.
/goo.gl/gGgtxv
Calypso and R3 partner for blockchain trade matching; Real-time trade matching tests were completed across four time zones.
Hayley McDowell - The Trade
Calypso Technology has teamed up with blockchain consortium R3 to provide five financial institutions with trade matching services.
/goo.gl/QTh32S
JP Morgan exits R3 blockchain group; JP Morgan has followed fellow founding member Goldman Sachs in departing the R3 blockchain initiative.
Paul Walsh - The Trade
JP Morgan has become the latest participant to withdraw from blockchain consortium R3.
/goo.gl/Bh79Uy
Vix 'fear gauge' closes at 3-year low; Volatility index collapses as Trump unveils tax cuts and French election concerns ease
Robin Wigglesworth in New York - FT
Wall Street's "fear gauge" closed at a three-year low on Thursday as the stock market has regained its footing this week, rewarding investors who bet on volatility staying subdued with another week of eye-catching returns.
/goo.gl/LHb1lT
The market's risky bet on stability; Selling insurance against future turbulence has moved beyond being a niche trade
Christian Pfrang and Robin Wigglesworth - FT
The relief with which markets greeted the victory of centrist Emmanuel Macron in the first round of France's election this week has only sharpened the appeal of a trade whose popularity is also raising fears of turbulence should it unravel.
/goo.gl/ZvII9k
Steve Cohen dragged back into Fairfax lawsuit; New Jersey court reinstates billionaire and former fund as defendants in $8bn case
Lindsay Fortado - FT
Billionaire Steve Cohen and his former hedge fund, SAC Capital, have been dragged back into one of the most vicious and longest-running legal sagas in the industry after an appeals court reinstated them as defendants in an $8bn lawsuit.
/goo.gl/vMz36n
Wind Power Gets a Leg-Up in Biggest U.S. Electricity Market
Naureen Malik - Bloomberg
First test will come at next month's PJM capacity auction; Wind previously overlooked because of wild swings in output
Wind may have just gotten a boost in the biggest U.S. electricity market.
/goo.gl/DRHKDB
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| Exchanges, OTC & Clearing | | Top news from exchanges, clearing, settlement and trade execution facilities | CME Group Inc. Reports Strong First-Quarter 2017 Financial Results
CME Group
CME Group Inc. (NASDAQ: CME) today reported revenue of $929 million and operating income of $601 million for the first quarter of 2017. Net income was $400 million and diluted earnings per share were $1.18. On an adjusted basis, net income was a record $416 million and diluted earnings per share were a record $1.22. Financial results presented on an adjusted basis for the first quarters of 2017 and 2016 exclude certain items, which are detailed in the reconciliation of non-GAAP results.1
/goo.gl/rHM8rh
Japan Exchange Group, Inc. And Consolidated Subsidiaries Consolidated Financial Results For The Fiscal Year Ended March 31, 2017 (Based On IFRS), Unaudited
JPX
Click here to download consolidated financial results for the fiscal year ended March 31, 2017.
/goo.gl/VQsfEX
LCH Ltd opens Norwegian Krone account with Norges Bank
LCH
Provides LCH's UK entity with access to liquidity at the Norwegian central bank; LCH Ltd now maintains central bank accounts in six currencies
LCH Ltd, a leading global clearing house, announced today that it has established deposit and intraday liquidity facilities with Norges Bank, the central bank of Norway. LCH is now settling its Norwegian Krone payments via the central bank.
/goo.gl/KlBrBP
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| Fintech | | A roundup of today's market tech news and a look at tomorrow's disruptors | Old financial services, new tricks: How 15 classic brands are tackling fintech
SiliconRepublic
With a bit of flexibility, forward-thinking and cooperation with fintechs, long-established financial services show there's life in the old dogs yet.
/goo.gl/tPFC3R
Growth still trumps profits for US tech groups; Waves of spending are bearing fruit but expansion remains main priority over profits
FT Reporters
Few tech investors have done as well recently as Steve Ballmer. When the former Microsoft chief executive stepped aside in 2014, he was the software company's biggest individual shareholder with a stake worth $12.6bn.
/goo.gl/hhq0vR
Tech Workers Who Quit Say They're Treated Unfairly, Study Shows; White and Asian men, who account for the majority of jobs at tech firms, say they're more unfairly managed than men of other races.
Ellen Huet - Bloomberg
People quit their jobs for a variety of reasons: a better opportunity elsewhere, a life change, a move out of state. Among those at high-paying U.S. technology companies, the most common reason is a sense of being unfairly treated, according to a study published Thursday.
/goo.gl/KSsfPY
JPMorgan Chase & Co leaves blockchain consortium R3
Anna Irrera - Reuters
JPMorgan Chase & Co has left the mammoth bank blockchain consortium led by New York-based startup R3 CEV, the latest member to depart over the course of the company's fundraising process, R3 confirmed on Thursday.
/goo.gl/gXOpZE
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| Politics | | An overview of politics as it relates to the financial markets | Markets Think Trump Speaks Loudly But Carries No Stick; The hyped-up tax plan disappointed investors because of the prospects of it being implemented
James Mackintosh - WSJ
In the immediate aftermath of the November election investors dared to hope that the U.S. had entered a new political era. The market reactionÂor lack of itÂto Donald Trump's sketchy plan for tax cuts on Wednesday is part of a recognition that Washington remains stuck with politics as usual.
/goo.gl/T7Q003
Donald Trump is undermining his Treasury secretary
Lawrence Summers - FT
President Donald Trump's tax proposals were rolled out on Wednesday by the Treasury secretary Steven Mnuchin and National Economic Council director Gary Cohn. For reasons of long-run budget health, fairness, and economic impact I think they are extraordinarly ill-advised. I am certain that the substantive concerns I have will be extensively addressed in the debates to come.
/goo.gl/DyDtRU
President Trump's Laughable Plan to Cut His Own Taxes
The Editorial Board - NY Times
As a rule, Republican presidents like offering tax cuts, and President Trump is no different. But the skimpy one-page tax proposal his administration released on Wednesday is, by any historical standard, a laughable stunt by a gang of plutocrats looking to enrich themselves at the expense of the country's future.
/goo.gl/7Upk5q
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| Regulation & Enforcement | | For more regulatory, visit MarketsReformWiki, our website focused on current market reform efforts. | Almost two thirds of firms not confident about meeting MiFID II deadline; New survey also revealed the majority of the industry expects compliance costs to double by 2020.
Hayley McDowell - The Trade
A significant 64% of financial institutions have said they are unsure or not confident about meeting the January 2018 compliance deadline, according to a new survey.
/goo.gl/1B7p22
1MDB Prosecutors Said to Eye Ex-Goldman Banker's Money Moves
Greg Farrell, Andrea Tan and Keri Geiger - Bloomberg
U.S. asking about transfers in accounts tied to Tim Leissner; Leissner was at Goldman Sachs nearly 20 years before resigning
U.S. prosecutors investigating Goldman Sachs Group Inc.'s role in raising almost $6 billion for Malaysia's 1MDB investment fund are asking questions about money flowing through accounts linked to Tim Leissner, the lead banker behind the transactions, according to people familiar with the matter.
/goo.gl/60ICni
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| Investing & Trading | | Today's top stories from equities, indices and FICC (fixed income, currencies and commodities) | Thomson Reuters Reports First-Quarter 2017 Results
Reuters
Thomson Reuters (TSX /NYSE: TRI) today reported results for the first quarter ended March 31, 2017.
/goo.gl/l9yrIv
Rob Arnott, 'Godfather of Smart Beta,' Tells Investors: You're Doing It Wrong; In series of papers, investing pioneer casts doubt over merits of momentum strategies, valuations of low-volatility funds
Aaron Kuriloff - WSJ
The "godfather of smart beta" is having fresh doubts about how some on Wall Street are using the increasingly popular passive-investing strategies he pioneered.
/goo.gl/UMyUcw
Institute of Trading and Portfolio Management hires former Goldman Sachs Managing Director David Perlin as Senior Trading Mentor
Institute of Trading and Portfolio Management
David has enjoyed a successful 35-year career on Wall Street on the buy side and the sell side - including as Goldman Sachs' MD and as a Hedge Fund Head Trader - where he had a front-row seat to the historic secular bull market while participating in all of the financial shocks and corrections of the modern financial markets age.
(NOLINK)
Aviva's investment arm can't dodge hard questions; Net returns of 1.07% prove that successful fund managers do not work for life offices
Neil Collins - FT
Few people have read the 362 pages of the Aviva annual report, and fewer still understand the labyrinthine accounts of this sprawling life assurance company. Even Philip Meadowcroft, a shareholder who has made it his specialist subject, has not read the complete works. However, he has read enough for his traditional role as thorn in the side of the management at next month's annual meeting.
/goo.gl/tUpttY
Judging the Staying Power of Record Markets
Barry Ritholtz - Bloomberg
The Nasdaq Composite Index, which contains some of the biggest names in tech, hit a milestone this week, crossing 6,000 for the first time. Year-to-date, the Nasdaq has gained almost 12 percent, while the Standard & Poor's 500 is up 6.6 percent. What this means to future market performance is the subject of ongoing debate: The bulls say new highs presage more gains; the bears see an expensive market beset by risks as the Federal Reserve prepares additional interest-rate increases.
/goo.gl/fGo0JW
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| Banks, Brokers & Managed Funds | | The latest from banks, brokers, hedge funds and managed futures | Barclays Net Profit Tumbles on Africa Write-Down; U.K. lender's investment-banking income rises but misses expectations
Max Colchester - WSJ
Barclays BCS 0.44% PLC said its net profit fell by more than half in the first quarter of the year, as the British bank's bottom line was stung by the cost of shedding its African business and weaker-than-expected returns at its investment bank.
/goo.gl/QNMdBx
Pressure Mounts on Barclays in More Ways Than One; UBS appears to grab more of U.S. investment banking recovery than its U.K. rival
Paul J. Davies - WSJ
The U.S. has been the bright spot for banking and markets in recent months, but recovery there isn't helping all global banks.
/goo.gl/6ZR87W
Barclays doubles underlying profits but investment bank disappoints; Chief executive seeks to shift attention from his treatment of a whistleblower
by: Martin Arnold, Banking Editor - FT
Jes Staley, Barclays chief executive, has been forced to defend the disappointing performance of parts of its investment bank, while deflecting awkward questions about his recent treatment of a whistleblower.
/goo.gl/Y2r2aH
UBS profits leap as client inflows into wealth management rebound; First-quarter earnings for Swiss bank beat expectations
by: Laura Noonan in Dublin - FT
UBS raised its first-quarter profits by 42 per cent and saw a significant turnround from the heavy client outflows at the end of last year that had raised questions about the bank's wealth management business.
/goo.gl/GIMz4v
A Star Goldman Trader Goes Cold
by Dakin Campbell , Sridhar Natarajan , and Nabila Ahmed - Bloomberg
Savarese trades demonstrate how bank still stomachs volatility; Peabody Energy bonds had contributed to a trading-desk rebound
Adam Savarese was looking to make a splash in his new job as Goldman Sachs Group Inc.'s top distressed-debt trader last year, and found it in Peabody Energy Corp.
/goo.gl/Wqtd49
ITG Can't Duck Fraud Suit Over 'Project Omega' Trading
By Jon Hill - Law360
A New York federal judge declined Wednesday to free Investment Technology Group Inc. from a proposed shareholder class action accusing it of hiding a proprietary trading platform that led to a record $20.3 million fine, ruling that some of the financial services firm's past statements about its business model and practices were more than puffery.
/goo.gl/0ZKCSU
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| Regions | | Stories of local interest from the Americas, EMEA and Asia-Pacific regions | China's short-term money market rate hits 2-year high; Clampdown on shadow banking practices pushes up borrowing costs
by: Jennifer Hughes and Hudson Lockett in Hong Kong and James Kynge in London - FT
Short-term borrowing costs in China have climbed to their highest level in two years as comments from President Xi Jinping fan investor expectations that a "regulatory windstorm" is part of a broader crackdown on the financial sector.
/goo.gl/pdLkh8
Exclusive: Trump says 'major, major' conflict with North Korea possible, but seeks diplomacy
By Stephen J. Adler, Steve Holland and Jeff Mason - Reuters
U.S. President Donald Trump said on Thursday a major conflict with North Korea is possible in the standoff over its nuclear and missile programs, but he would prefer a diplomatic outcome to the dispute.
/goo.gl/LmJlnX
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| Brexit | | Financials stories regarding the decision of the United Kingdom to leave the European Union | UBS chief warns on Brexit, calls on UK government for help
by: Katie Martin - FT
International banks may be forced to make "bigger plans" to move operations from the UK after Brexit if the UK does not do more to help them, UBS chief executive Sergio Ermotti warned.
/goo.gl/L7THTr
Britain's misplaced sense of economic superiority; The UK neither has US-style low taxes nor Germany's level of public services
by: Chris Giles - FT
Britain is traditionally confident about its economic place on the planet. With the fifth-largest economy in the world, the UK cleverly combines American levels of taxation with a European welfare state. Theresa May repeated 11 times in parliament on Wednesday that the country boasted a "strong economy" that depended on her "strong and stable leadership".
/goo.gl/rn9JKt
EU prepares for post-Brexit membership for united Ireland; Summit endorsement would raise fears over fragmentation of UK
by: Alex Barker and Arthur Beesley in Brussels and Vincent Boland in Dublin - FT
European leaders are preparing to recognise the potential for a "united Ireland" within the EU, confirming that Northern Ireland would seamlessly rejoin the bloc after Brexit in the event of a vote for Irish reunification.
/goo.gl/46XYsc
European politicians still trying to use Brexit to steal British business, warns UK banker; A LEADING British financier has warned his European counterparts are still trying to use Brexit to steal business away from the City of London.
By JOE BARNES - Express
Michael Spencer, founder of NEX Group, said the City will have to be at the heart of Theresa May's negotiations with the European Union.
/goo.gl/qyQ0za
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