| July 17, 2023 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Observations & Insight | | | 
Adam Solomons talks about how having a base in London helped RJO grow globally
JohnLothianNews.com
Adam Solomons, the deputy managing director at R.J. O'Brien Limited, spoke with JLN Correspondent Julie Ros at the IDX 2023 Conference in London in a video interview. He talked about RJO's growth in London over the past 4-5 years and how having a fully functioning FCM there has allowed the company to expand globally.
Watch the video »
| | | | | | Lead Stories | | | One Big Bet: Options Traders Wager Rates Have Peaked
Eric Wallerstein - WSJ
Long-term bond yields have climbed sharply, punishing an ultralong bond ETF. Options traders are betting rates are due for a steep drop.
Roughly 2.8 million call option contracts are sitting in investors' hands, a record according to Cboe data. That's nearly double the total a year ago, and more than triple the 800,000 or so put contracts outstanding.
/jlne.ws/3PX3q7r
What Expiry Week Means For Equity Volatility: Macro Man Podcast
Bloomberg (Podcast)
Bloomberg's Cameron Crise runs the numbers on how the stock market behaves before and after monthly option expiry.
/jlne.ws/3K3h1WP
A Summer Calm Is Falling Over Wall Street
Hardika Singh - WSJ
Things haven't been this quiet on Wall Street in awhile.
Market volatility often eases in the summer as traders head out for vacation. This summer is shaping up to be even calmer than last year's. The S&P 500 has posted moves of 1% or more in either direction for just five trading days in June and July so far. In June and July of last year, there were 23 days with such moves.
/jlne.ws/46L2WXQ
There Is a Long-Term Danger Lurking in Financial Markets; The premium investors demand for holding longer-maturity assets remains very low. Markets could be in for a wallop if it returns to historical averages.
Jon Sindreu - The Wall Street Journal
Contrary to popular belief, financial markets have a long-term bias. This isn't always a good thing. There is much talk among investors of a "new regime." Those words headline BlackRock's recent midyear outlook, for example, which emphasized how the trends of the past decade-low interest rates and volatility, with bonds cushioning stock selloffs-have reversed in the past two years.
/jlne.ws/44udTeR
Markets Are Propelled by What Hasn't Happened
Mohamed A. El-Erian - Bloomberg
Whether you are examining the evolution of the US economy or the impact of monetary policy, one of the noteworthy developments this year is not what has happened but rather what has not. We were reminded of this over the last two weeks by macroeconomic data and by quarterly bank earnings. It is a phenomenon that, crucially for markets, has meant that interest-rate risk has not translated into any material credit risk â a relief that traders and investors are happy to run with despite residual uncertainty.
/jlne.ws/3NZsWX2
Funds boost CBOT corn shorts amid huge US acres and critical rain
Karen Braun - Reuters
Chicago-traded corn futures have held up relatively well considering the flip to wetter weather in the U.S. Corn Belt and the revelation that U.S. farmers have planted much more corn than expected. Those factors caused a historic 21% plunge in CBOT December corn in the final seven trading days of June, though price steadied immediately after. In the week ended July 11, corn climbed 1.6% in anticipation of a yield cut from the U.S. Department of Agriculture.
/jlne.ws/44NJgkp
Wall Street divided over just how bad Goldman Sachs' earnings will be
Joshua Franklin and Stephen Gandel - Financial Times
Bank analysts are sharply divided over just how bad Goldman Sachs' second-quarter earnings will be, offering a much wider range of estimates than is typical for the Wall Street company.
There is a consensus that it will not be one of Goldman's best quarters, but some are predicting it could be one of the bank's worst. Earnings estimates range from Goldman making 33 cents per share and barely eking out a profit, to almost $5 a share and netting more than $1.5bn.
/jlne.ws/44oTjwq
BlackRock offers a vote to retail investors in its biggest ETF
Brooke Masters - Financial Times
BlackRock will give retail investors in its biggest exchange traded fund the chance to participate in proxy voting in 2024, as the $9.4tn asset manager moves to rebut Republican claims that it pursues a "woke agenda".
The world's biggest money manager has joined fellow index fund providers State Street and Vanguard in experimenting with ways to involve ordinary investors in voting on shareholder proposals at a time when their collective influence on US companies has come under fire from both left and right.
/jlne.ws/3OgA9Dc
Funds cashing in on large short dollar position
Jamie McGeever - Reuters
Hedge funds have been positioned for a weaker dollar all year and those bets are paying off handsomely, especially against the Mexican peso, Brazilian real and sterling. The latest Commodity Futures Trading Commission data for the week to July 11 show speculators' held their largest net long sterling position since 2007, and their biggest bullish bet on the Mexican peso and Brazilian real in three years.
/jlne.ws/44uoZka
| | | | | | Exchanges | | | Cboe launches new sweep order types to bolster liquidity targeting for traders; Effective from today, the new sweep order types will allow participants to access the dark, periodic auction and lit order books without the need to submit multiple orders.
Wesley Bray - The Trade
Cboe has introduced new periodic auction book (PAB) to lit sweep order types, which will allow participants to sweep the local Cboe PAB or dark book, before sweeping the local Cboe lit book - in an effort to improve liquidity targeting for users. The new order types are available in the Cboe UK and Cboe NL PABs effective today, The TRADE can reveal.
/jlne.ws/3rDNYTi
ETFs shrug off pending multitrillion dollar Nasdaq 100 revamp
Steve Johnson - Financial Times
A multitrillion-dollar revamp of one of the world's largest stock market indices looks set to be a bit of a damp squib in the exchange traded fund world.
The combined weighting of six vast technology behemoths â Microsoft, Apple, Alphabet, Nvidia, Amazon and Tesla â in the Nasdaq 100 index is due to be slashed from the 50.9 per cent they reached at the close of trading on July 7, when the "special rebalance" was announced, to just 40 per cent.
/jlne.ws/3pR4fDY
| | | | | | Regulation & Enforcement | | | Director of CFTC's Whistleblower Program Steps Down; Christopher Ehrman, who has led the program since 2013, will next represent whistleblowers as a lawyer in private practice. Christina
Mengqi Sun - The Wall Street Journal
Christopher Ehrman, the director of the Commodity Futures Trading Commission's whistleblower program since 2013, is leaving the agency effective immediately and will begin representing whistleblowers as a lawyer in private practice. The derivatives-market regulator said Christina McGlosson, who recently returned to her role as associate director of the whistleblower office after two years in the private sector, will serve as acting director.
/jlne.ws/3Q2gHvy
Global rules leave crypto firms with no place to hide, says G20 watchdog
Huw Jones - Reuters
Globally agreed rules leave crypto firms with no option but to introduce basic safeguards to prevent the blow-ups seen at FTX exchange and other crypto casualties, the G20's Financial Stability Board said on Monday.
The FSB published on Monday final recommendations requested by the G20 on supervising firms that trade cryptoassets such as bitcoin. The watchdog also revised its existing recommendations for stablecoins in light of the demise of TerraUSD/Luna coins.
/jlne.ws/3NWyJwn
| | | | | | Strategy | | | The 'S&P 500 is hot, the Nasdaq is even hotter,' says this strategist.
Barbara Kollmeyer - MarketWatch
Can the S&P 500 bounce back after breaking a four-session win streak? That's what some are wondering as a new trading stretch begins.
Last week saw the index also reach 4,500, a level not seen since April 2022. That's against the backdrop of an earnings season that some say may not drive up stocks as it has in the past, as we've already had a big rally.
/jlne.ws/3Oj6qts
Why investors should not expect positive economic data to push S&P 500 materially higher as good news already priced into stocks
Isabel Wang - MarketWatch
The U.S. stock market has been rallying on hopes of a "Goldilocks" economic environment, where inflation falls and glides back down to the Federal Reserve's 2% target, while relatively stable economic growth helps stocks and bonds log strong rallies.
That would be a continuation of a trend that started in early June, whereby economic data refuted fears of a hard landing, stubbornly high inflation and more interest-rate hikes.
/jlne.ws/3K1yfEf
Option Expiration, Earnings Take Center Stage: Will U.S. Stocks Meet the High Bar?
Michael Kramer - Investing.com UK
Stocks finished the week higher following the CPI report, which showed softer than expected core CPI. Again, as I have noted a few times, the stock market inflation fantasy will get harder from here. The easy comparables are now behind us, and to see the headline inflation rate finish the year around 3%, prices will need to be flat for the year's balance.
/jlne.ws/44oZMYe
Covered Call Strategy
Cboe (Video)
In #Vol411, Joel Hawthorne @louiswinthrop lets us know about the structure, use and volatility of covered calls.
/jlne.ws/3K3nBfZ
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