| February 04, 2022 | | | |  | Jeff Bergstrom
Editor
John Lothian News | |
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| | | | Lead Stories | | | Wall Street Gets 'Seasick' on Hair-Trigger Swings: Traders React
Vildana Hajric and Lu Wang - Bloomberg
From Meta Platforms Inc. to Microsoft Corp. to the ARK Innovation ETF and the whole sprawling market, stock prices are darting around with a velocity that would try the formidable nerves of a crypto bull. It's making life miserable for traders trying to navigate everything from evolving monetary policy to inflation-riven earnings and a pandemic.
More than in crypto, however, the swings in equities represent changes in very large sums of money. Amazon.com Inc.'s 19% swing added $270 billion to its value in minutes. Meta famously lost $251 billion for the biggest single-day wipeout in stock-market history. Companies in the Nasdaq 100 Index would have erased roughly $270 billion in value as the Invesco QQQ Trust Series 1, which tracks the index, sank 1.6% instantly after the jobs report.
/jlne.ws/34znpTM
Earnings whiplash points to more volatility for U.S. markets
David Randall - Reuters
Diverging earnings from megacap growth stocks are fueling wild swings in equities, opening the door for more volatility on the heels of last month's sharp drop as investors grow more discerning in the names they pick.
Many market participants hoped that earnings from the big, tech-focused stocks that have led markets for years would lend equities a modicum of support after January's sharp declines, which saw the Nasdaq Composite (.IXIC) fall 9% and the S&P 500 (.SPX) give up 5.3% after a hawkish shift from the Federal Reserve.
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Traders struggle to transact shares in volatile US stock market
Eric Platt and Joe Rennison - Financial Times
Huge swings in US stocks such as Meta, PayPal and Snap this week reflected surprises in their financial results but also point to what investors say has been a dramatic recent decline in the capacity to transact large batches of shares.
Liquidity â the ability to buy or sell an asset without influencing the price â has been a hallmark of the $51tn US equities market. But over the past two weeks money managers have observed its deterioration, with costs increasing to complete large purchases or sales and prompting some to avoid putting on big trades entirely.
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A Reminder That It's Not Just Inflation That Killed the Fed Put
Joe Weisenthal - Bloomberg
Stocks are roughly flat in the wake of today's better-than-expected jobs report. But the overall trend lately has been down, with the Nasdaq Composite Index off more than 10% for the year. The S&P 500 is down 6%. Rips are getting sold more than dips are getting bought.
Of course on the flipside, there appears to be nothing standing in the way of not just a Federal Reserve hiking cycle, but possibly a pretty aggressive one at that. U.S. two-year yields, which are a pretty good proxy for how the market is thinking about short-term Fed actions, are nearly 1.3%, which is the highest since February 2020.
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It's Now Or Never When It Comes to Betting on Euro Volatility
Vassilis Karamanis - Bloomberg
Traders betting volatility in the euro will pick up once central banks turn hawkish are about to be put to the test.
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Analysis: Traders scour markets for protection amid Ukraine tensions
By Saikat Chatterjee
Saikat Chatterjee and Danilo Masoni - Reuters
Unnerved by the sabre-rattling between Russia and the West over Ukraine, traders are scouring global markets for investments that could provide them with protection against losses in case the conflict escalates.
Any conflict risks triggering a rout in riskier investments such as global stocks and a rush into so-called safe havens such as government bonds, gold and currencies like the U.S. dollar and yen, leaving those exposed to equities with large losses.
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| | | | | | Exchanges | | | Cboe Global Markets Reports Trading Volume for January 2022
Cboe Global Markets, Inc.
Cboe Global Markets, Inc. (Cboe: CBOE), a leading provider of global market infrastructure and tradable products, today reported January monthly trading volume statistics across its global business lines. The data sheet "Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report" contains an overview of certain January trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
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Cboe Global Markets Reports 2021 Fourth Quarter and Full Year Results
Cboe Global Markets, Inc. (Cboe: CBOE) today reported financial results for the 2021 fourth quarter and full year
"2021 was a remarkable year for Cboe as we made significant progress advancing our strategic initiatives while delivering record full year results. As we begin 2022, we are focused on the transformational opportunities ahead in Data and Access Solutions, Derivatives and Cboe Digital, opportunities that span our ecosystem," said Edward T. Tilly, Cboe Global Markets Chairman, President and Chief Executive Officer. "We have demonstrated our ability to diversify and strengthen our revenue profile as a global market operator, something we believe will accelerate in 2022 as we continue to broaden our geographic reach and extend access to our unique set of products and services around the globe. Continued efforts to build on our core capabilities through organic and inorganic investment will allow Cboe to remain a leader in capital markets innovation. I am incredibly proud of the entire Cboe team for the record results delivered in 2021, and I am even more excited about the opportunities in 2022 and beyond."
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***** Whoever let Ed Tilly become a shark, well, here are the results.~JJL
MGEX Reports Trading Results for January 2022; Sets January Monthly Volume Record
MGEX
Minneapolis Grain Exchange (MGEXTM), a Designated Contract
Market (DCM) and Derivatives Clearing Organization (DCO), today reported record January 2022 trading volume of 277,151 contracts, a 16.1% increase from January 2021 and the highest January volume total in the history of MGEX. MGEX reported Hard Red Spring Wheat (HRSW) Futures volume of 185,949 contracts, a decline of 20.2% from January 2021 and an increase of 41.5% from December 2021. HRSW Options volume totaled 8,489 contracts, a 98.7% increase from January 2021 and a 26.8% increase from December 2021. SPIKES Futures volume totaled 82,713 contracts in January 2022, up 7.5%.
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Crypto Options Trading Volume Surged in January as Prices Fell
Angelique Chen - Coindesk
January was a gloomy month for digital assets, but the crypto options market boomed.
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| | | | | | Regulation & Enforcement | | | Hedge Fund Risk Warning From U.S. Watchdogs Points to Archegos Blowup
Jesse Hamilton - Bloomberg
Hedge funds are getting fresh scrutiny from President Joe Biden's regulators as a potential weak spot in the financial system, and the watchdogs are using last year's collapse of the Archegos Capital Management family office as an example of what can go wrong.
The Financial Stability Oversight Council -- a panel of top U.S. financial regulators that includes Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Securities and Exchange Commission Chair Gary Gensler -- agreed Friday to support "an interagency risk monitoring system to identify potential emerging financial stability risks posed by hedge funds" and to consider options for dealing with the dangers as they arise.
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Short-Selling Firms and Allies Under Investigation by DOJ
Katia Porzecanski and Tom Schoenberg - Bloomberg
The Justice Department is collecting a trove of information on dozens of investment firms and researchers engaged in short selling as part of a sweeping U.S. hunt for potential trading abuses, according to people with knowledge of the matter.
The Federal Bureau of Investigation seized computers from the home of prominent short seller Andrew Left, the founder of Citron Research, in early 2021, some of the people said. In more recent months, the Justice Department subpoenaed certain market participants seeking communications, calendars and other records relating to almost 30 investment and research firms, as well as three dozen individuals associated with them, the people said, asking not to be identified discussing confidential inquiries.
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Regulators must act to rein in Wall Street risks as rates rise
Sheila Bair - Financial Times
Much has been written about the US Federal Reserve's challenge in combating persistent inflation, now running at 7 per cent. But in its role as regulator, the Fed has an even greater challenge: maintaining financial stability as it raises interest rates.
Recall that interest rate hikes helped catalyse the financial crisis of 2008 and 2009. Then, as now, easy money had led to high levels of borrowing and inflated asset valuations â conditions that could no longer be sustained as monetary policy tightened.
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| | | | | | Strategy | | | UBS's (UBS) Nadia Lovell: Use Stock Volatility to Move Up in Investment Quality
John McCorry and Lisa Abramowicz - Bloomberg
The intense stock-market swings are giving investors the chance to snag good investments at reduced prices, according to UBS Global Wealth Management's Nadia Lovell.
"As we go through a volatile period, there's opportunity to move up the portfolio in quality, and that's really our message right now to clients," the senior U.S. equity strategist at the firm, told Bloomberg Television's Surveillance Friday.
/jlne.ws/3gqI7bs
| | | | | | Education | | | OIC 2022 Educational Series: Fundamental Concepts of Options
The Options Industry Council (OIC)
As a new year arrives, so too does a new series of educational webinars from The Options Industry CouncilSM (OICSM). In the first quarter of 2022, OIC instructors will focus on three important options investing topic areas: Getting Started With Options (January), Understanding Options Pricing (February) and Demystifying the Greeks (March).
Sessions will be led by market professionals, all with years of real-world trading experience, who are now serving as OIC instructors. Each webinar in the first quarter will be streamed live and is designed to help investors build on their knowledge of options, while including explanations of the benefits and risks of these investment tools.
/jlne.ws/3goPjET
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| | | | John Lothian News (JLN) is the news division of John J. Lothian & Company, Inc. (JJLCO). The online media and financial services firm is staffed by derivatives industry, journalism and technology professionals. | | | | | | | John Lothian News Editorial Staff: | | | John Lothian
Publisher | | | Sarah Rudolph
Editor-in-Chief
| | | Jeff Bergstrom
Editor
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