Episode Transcript
[00:00:06] Welcome to the John Lothian News Daily Update podcast for October 10, 2024. I am your host, John Lothian. This podcast is brought to you by John Lothian News the home of markets wiki and markets wiki Education. Thank you for joining us. Here are the hits and takes comments from today's JLN yesterday would have been my late mother's 94th birthday. Yesterday could have been the day her home in Florida, the one I bought from my brothers, was destroyed by Hurricane Milton. However, in a really good sign, Florida power and Light says that the power is back on at my home as reported by my meters several times a day. As of 05:02 this morning, I had power, which means that once the roads are passable, I can head back down to Sarasota and assess any damage and return to my work at home. There still could be substantial damage, but this is a good sign more than 20 years ago, in September 2004, when I was at my first Swiss Futures and Options association conference in Bergenstock, Switzerland, CBO then Cboe announced they would launch VIX options, which would not start trading until February 24, 2006. I was there at the conference with my wife Cheryl, and we were celebrating our 15th wedding anniversary as part of the trip. It was there I met future Cboe chairman and CEO Ed Tilley for the second time. Fast forward 20 years later VIX options are the most successful new product in exchange history and now Cibo is adding to the product suite planning to launch VIX Futures options on Monday, October 14. This is a derivatives contract VIX Futures options of a derivatives contract VIX futures on a derivatives VIX based on an index there is clearly demand for VIX options since 2022. Volume is up about 60% and average daily volume in VIX options is now 851,000 contracts in 2024. This new option on future structure for VIX will allow more market participants, including those restricted from accessing securities based options, to trade a VIX options product, CBO says.
[00:02:43] The Singapore Exchange SGX group yesterday reported significant growth in market statistics for September 2024, driven by easing monetary policies and China's stimulus package, which boosted optimism among investors. Securities trading activity surged with total market turnover rising 75% year on year to 30.4 billion Singapore dollars and the daily average value increasing 67% to 1.45 billion Singapore dollars. The Straits Time index, or STI, advanced 4.1% month on month, reaching a 17 year peak and year to date gains of 10.6%. Derivative trading also accelerated, with volume climbing 34% year on year to 28.9 million. Contracts open interest in SGX FTSE a 50 index futures hit a record 1.24 million contracts, reinforcing SGX's role in managing China exposures. Additionally, FX futures and OTC FX volumes grew significantly, with SGX USD CNH FX Futures reaching a notional high of $17.4 billion. Commodity derivatives volume rose 29% year on year to a record 6.94 million contracts buoyed by strong demand in rubberization, petrochemicals and iron ore contracts, the FBI's operation token mirrors has charged 18 individuals and companies with fraud and market manipulation in the cryptocurrency sector, the Financial Times reported. The operation involved the creation of a token Nexfund AI, which traded for one day and generated $4,600 in artificial volume. The scheme used algorithms to create billions in fake trading volume, with market maker diem quant allegedly inflating prices before selling tokens for profit arrests were made and over 25 million in crypto assets were seized. Charges also involve employees from companies like Saitiama, which had a market value of $7.5 billion. Defendants face serious charges, including market manipulation, which could lead to up to 20 years in prison, underscoring that cryptocurrency is subject to regulations against practices like wash trading, an upcoming webinar from the FIA titled Double Trouble or more effectively navigating parallel investigations, hosted by the law and compliance division, is scheduled for October 31, 2020 2024 from 10:00 a.m. to 11:00 a.m. eastern time. It will address the challenges faced by market participants undergoing enforcement investigations by the CFTC, which often coincide with inquiries from the Department of Justice, international regulators and financial exchanges. The Morgan Lewis team, including a former chief of the fraud section, will discuss recent enforcement actions and provide strategies for managing these complex, simultaneous investigations to minimize risks and improve outcomes. Im risks, wrote the FMx volume from Monday. The numbers were right. I just said it was from the previous day. It was from the previous previous day. Yesterday, FMX Futures exchange volume was down a couple of contracts from Tuesdays. Volume for Wednesday was 64. Contracts of sofa and open interest was also down two contracts at 1175.
[00:06:48] See the daily trade report page for details of Wednesday's activity.
[00:06:54] Arcadium Lithium Plc, or ALTM, was the most actively traded stock yesterday, beating out Nvidia for the first time in a long time. ALTM was also up 30.90% yesterday after Rio Tinto. Rio and the ALTM announced a definitive agreement under which Rio Tinto will acquire Arcadium in an all cash transaction for $5.85 per share. Lithium is an indispensable mineral for the batteries that power electric vehicles.
[00:07:38] Our most read stories from our previous edition of JLN options were who and what is driving oil price volatility from the Financial Times FIA announces ten startups selected for 2024 innovators Pavilion from FIA. And one of Wall Streets biggest bears is turning upbeat on the stock market for the first time in two years. From Market Insider, subscribe to the JlN Options newsletter with a link in todays JlN. Here are more stories from the first read section of todays JLN. Heres a story from Bloomberg. The headline Mets post season run pushes Steve Cohen towards baseball glory billionaire Steve Cohen stood outside Citi Field Tuesday, greeting fans, posing for photos with kids and saying, let's go Mets, the rallying cry of the Major League Baseball team he owns. Wearing a Mets cap, the hedge fund manager was treated like a rock star ahead of game three of the National League Division Series against the rival Philadelphia Phillies, a game won by the Mets, seven two as they continued their surprising post season run. They lead the best of five series two to one, with game four set for Wednesday at 05:08 at Citi Field. My comment I hate to root for the Mets, but no, I'm going to leave it there. I hate to root for the Mets. Here's a story from Bloomberg. The headline Trump vows to eliminate income taxes on Americans living abroad expats must file taxes with IR's and country where they live. Former president's plan is his latest involving tax reduction. Donald Trump said he would end us income taxes on Americans living in other countries, the latest in a string of tax proposals in the final stretch of the 2024 campaign. His pledge could simplify the us tax obligations for us citizens who live overseas. Americans, regardless of where they live in the world, have to file tax information with the Internal Revenue Service, and some expatriates are required to pay us taxes in addition to levies in the countries where they reside.
[00:09:55] Talk about a mass evacuation if Trump wins. This would create a crazy incentive to head for the us border and create a reverse border problem.
[00:10:05] Here's another story from Bloomberg. The headline Wall street pros avoid election bets with race too close to call, hedge funds show no clear position ahead of vote. Goldman traders advise looking at individual stocks over broad indexes. In less than a month, Americans will vote in one of the most consequential elections in us history. But on Wall street, things are eerily quiet, as the so called smart money is reluctant to wager on what's about to happen. Never bet on the flip of a coin, said George Ball, head of the Houston based investment firm Sanders Morris Harris. The election is too close to permit thoughtful investment positioning. My comment we need yes, no or maybe not contracts. Now here's another story, this one from Bloomberg. The headline Hurricane Milton threatens $30 billion of Muni debt in Florida debt sold to finance hospital senior living in storms path Muni bond impairments possible in worst case scenarios as Hurricane Milton barrels towards Florida, threatening massive storm surges in the Tampa Bay area. Roughly $30 billion of municipal debt is at risk, according to an analysis from Bloomberg Intelligence that includes bond sold to finance hospitals, utility systems and senior living homes. Florida borrowers have raced to the state and local government debt markets this year on the heels of a population surge that required updated infrastructure. The Bloomberg Intelligence Intelligence analysis identified tax backed and revenue supported debt sold by localities within the most at risk evacuation areas.
[00:11:54] During a meeting at ISIS headquarters in Atlanta on Tuesday, I had a discussion about how ISIS data tools can help in situations like this. Its amazing granularity for muni bond and mortgage backed security traders. Here are the top three stories from Mondays JlN our top clicked item Wednesday WaShinGTon, FIAs FIA announces ten startups selected for 2024 innovators Pavilion. Second was treasury direct to bond buyers moving your money could take a year from the Wall Street Journal. Third was HBO documentary suggests bitcoin creator Satoshi Nakamoto is developer Peter Todd from Bloomberg here are the top three stories from the lead section of todays JLN. The first story is from Reuters. The headline Florida based fund managers write out Hurricane Milton and remain committed to the state.
[00:12:51] Florida's sun and low taxes enticed many hedge funds and other financial professionals to move south. Now another massive hurricane is putting that love affair to the test, but many big name managers are committed to remaining in Wall street south for the foreseeable future. Hurricane Milton made landfall on Florida's west coast on Wednesday as a category three hurricane. By early Thursday, it had dropped to a category one with heavy rains and damaging storm surges as it reached the state's atlantic coast. Here's another story from Bloomberg. The headline catastrophe bonds dodge worst case scenario after Milton hits investors had previously feared losses as deep as 15%, bond losses now seen as more likely to be in single digits. After fearing the worst from Hurricane Milton, investors in catastrophe bonds appear to have sustained losses well below those predicted as recently as Wednesday. Estimates that had indicated the bonds would lose as much as 15% have now been replaced by calculations showing investors are more likely to see a hit in the single digits that after Milton made landfall as a category three hurricane, weaker than originally forecast and battering Florida south of the densely populated city of Tampa. And then one more story about the hurricane, this one from the Financial Times. Hurricane Milton has booming cat bond market. Investors warn of impact to value of natural disaster linked debt from massive Florida storm. The devastating hurricane hitting the Florida coast is expected to test the market for so called catastrophe bonds, threatening losses for a form of securitized reinsurance that is on course for record issuance this year. Us officials have warned of the lethal threat from Hurricane Milton, expected to be one of the worst storms to hit Florida in more than a century, as they raced to evacuate the area before the storm made landfall on Wednesday night. We are grateful for your attentive listening to the John Lothian news Daily update. Please spread the word about our podcast among your friends. We would greatly appreciate it if you could spare a moment to leave. Leave a review on Apple Podcasts or whatever platform on which you access your podcasts. Your reviews play a crucial role in introducing our content to new listeners. Also, if you haven't subscribed to the Daily John Lothian newsletter, email yet, you can enjoy a complimentary 90 day trial by visiting johnlothiannews.com trial. Thank you for your valued support. Have a great day and stay safe and treat people the same way you want to be treated, with respect, equality and justice. This has been. John Lothian Goodbye. This podcast has been produced by Andrew Lothian.
