[00:00:06] Welcome to the John Lothian News daily Update podcast for August 13, 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 cabins from today's JLN Mix. Safire, owned by Miami International Holdings, Inc. Or MIH, launched its electronic options exchange on August 12, 2024, marking Mayx's fourth us listed options exchange. OCC, the world's largest equity derivatives clearing organization, announced that Mayx Sapphire LLC has joined as an OCC participant exchange. With this addition, OCC now provides clearing and settlement services to 21 exchanges and trading platforms for options, futures and securities lending transactions. The World Federation of Exchanges, or WFE, issued a report titled WFE Data Trading Value and volume Surge as investors flock to markets that showed a rise in investor interest for listed securities in the first half of 2024, with trading values up 11.7% and volumes increasing by 9.6%. Despite global economic and geopolitical uncertainties. Global equity market capitalization grew by 5%, driven primarily by the Americas, while APEC's rapid growth slowed and EMEA remained flat.
[00:01:56] Ipos declined by 24.2%, although the Americas saw a 36.4% increase in ipo numbers, contrasting with declines in APAC and EMEA. Despite fewer ipos, the average ipo size increase by 18.8%, bolstered by seven unicorn listings, including pug brands and Galarama Group. Exchange traded derivatives continued their growth, rising 11.6%, though currency options plummeted by 38.2% due to regulatory changes. In India, overall equity trading and derivatives volumes reached their highest levels in five years. For you r raters out there, and I'm not talking about movies, the Financial Times Robin Wigglesworth has a commentary in today's paper titled Sky Full of r stars, with the sub headline checking in on the graviton particle of economics. Writing for the Ft Alphaville column, Wigglesworth discusses the concept of R Star, the neutral interest rate that balances economic growth without triggering inflation or unemployment. Although it's a theoretical construct, r is crucial for central banks and investors when determining the appropriateness of monetary policy, he writes. Goldman Sachs Kevin Daley challenges a Bank of England study that suggested r remains near zero due to aging demographic and low productivity. Using market prices and inflation forecasts, daily finds that global r star is heavily influenced by us rates, with country specific variations driven by GDP per capita inflation and current account balances, Wigglesworth wrote. The study underscores the impact of economic convergence, lower inflation and improved external balances in reducing interest rates globally. Despite the importance of local economic conditions, us influence on global r remains dominant. Tariq Gurbanovich has transitioned from the role of CEO to strategic advisor of the Sarajevo Stock Exchange. He shared on LinkedIn.
[00:04:42] Here are some excerpts from Fow that are from in front of its paywall from stories from the last two days, CME Group's total return futures, or TRF's, have reached record levels due to rising interest in OTC alternatives with expectations of further growth. Cibo Global Markets has introduced VIX TLT index to provide real time tracking of volatility in the US treasury market. Euronext reported a 12% increase in derivatives trading volume in July, driven by equity and commodity derivatives trading technologies completed its acquisition of able nozer solutions, enhancing its trade optimization capabilities. The us rates market experienced a surge in August due to heightened treasury volatility, leading to record trading activity. The London Metal exchange, or LME, has scheduled a data center migration and lifted copper suspensions. Eurex expanded its cryptocurrency derivatives with ethereum futures and options. Lastly, Euronext clearing and Abax exchange are seen as valuable new players in the european clearing and commodities markets, respectively.
[00:06:13] Our most read stories from our previous edition of JLN options were CME group volatility or CVAL from CME Group and from trading floors to family stories, Dan Sullivan and Michael Rothstein discussed the their journey to the opening bell from John Lothian news also, traders wary of going back to all in on stocks way up options from Bloomberg subscribe to the free JLN Options newsletter with a link in today's JLN. Here are more stories from the first read section of today's JLN. Here's a video from our OIC coverage trade station's James Putra talks with JLN about options, cryptos, derivatives, AI and other trading tools at OIC conference JLN spoke with James Putra, vice president and head of product at tradestation at the Options industry conference in Asheville, North Carolina. The interview is part of the JLN Industry Leaders series sponsored by the OCC. In the interview, Putra talked about the pressure on the spot crypto market and said that trying to squeeze it into traditional finance is not necessarily better for the individual customer and brings high risk for that customer. You can watch this video on johnlothiannews.com.
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[00:08:30] View the full agenda and register with a link in today's newsletter. Here's a story from Bloomberg the headline Wall Street's fear gauge spike isn't that surprising in panic markets, CBO says options pros say Vicks record jump on August 5 was a head fake. The index's sudden swoon sparks debate over its efficacy. The great volatility spike of 2024 was triggered by a sudden wave of deleveraging on Wall street, rather than a collapse of economic confidence with echoes of the pandemic era. Dark days now all market signs suggest that calm is set to return to us stocks after the recent mayhem. That, in a nutshell, is the benign message from the owner of the CBO volatility index, which registered its largest intraday jump last Monday in a move dubbed suspect by the former treasury secretary Lawrence Summers. My comment just standard operating procedure for the VIX. Here's another story, this one from the Financial Times. The headline russian navy trained to target sites inside Europe with nuclear capable missiles secret presentation for officers reveals plans for overwhelming strikes in early stages of potential war against NATO. Russia has trained its navy to target sites deep inside Europe using nuclear capable missiles in a potential conflict with NATO, according to secret files seen by the Financial Times. Maps of targets as far flung as the west coast of France and Barrow and furnace in the UK are detailed in a presentation for officers that predates the full scale invasion of Ukraine. The FT has previously reported from the same cache of 29 secret russian military files that Moscow had rehearsed using tactical nuclear weapons in the early stages of a conflict with a major world power. My comment and you wonder why Europe gets a little nervous. Here's another story, this one from the Wall Street Journal the Tim Waltz isn't very rich. Americans disagree on whether that's a good thing. The candidates finances spur debate on what we value in leaders and how we measure success.
[00:11:11] People are judging Tim Waltz on his net worth, but they don't all come to the same conclusion. The governor of Minnesota and Kamala Harris's democratic running mate doesn't report having any major investments aside from his pensions. He keeps his finances relatively simple compared with the varied holdings of multi millionaire opponent JD Vance. Based on each candidate's disclosures to date, some view Waltz's more modest finance as an asset, though he has more money than the typical american. They say he comes across on his balance sheets as someone you might split the bill for beers with. They also say he can better relate to their own personal financial situation when it comes to policy. My comment for a political party that is often accused of being filled with the elite, Waltz is uncommonly common and un elite. Weird, isn't it?
[00:12:13] Here are the top three stories from Monday's JLN our top click item Monday was Howard Lutnick's LinkedIn post saying that he hosted Donald Trump at his home last week along with 130 Trump supporters, raising $15 million. Second was the Bloomberg video Trump fundraiser aims to raise $10 million, Lutnick says. Third was the LinkedIn post from Jerry Corcoran, chairman and CEO at RJ O'Brien, talking about continuous improvement, a core principle at RJO, unquote, and highlighting the value of listening to clients, understanding their needs and acting on feedback to drive growth.
[00:13:00] Here are the top four stories from the lead section of today's JLN. Here's a story from Bloomberg.
[00:13:08] China goes to new extreme in crackdown on bond market frenzy chinese authorities are going to extraordinary lengths to tighten their grip on the world's third largest government bond market. In a highly unusual move on Friday, regulators told rural banks in Chinas Jingzi province not to settle recent purchases of government bonds in order to effectively re nig on their market obligations. It was the latest in a string of interventions designed to cool a market rally that sent yields to record lows and stoked a official concerns that banks have become too exposed to interest rate risk.
[00:13:56] Here's a press release from Miami International Holdings Miami International holdings announces successful launch of Mayx Saffir options Exchange Miami International Holdings Inc. Or MIH, a technology driven leader in building and operating regulated financial markets across multiple asset classes, classes and geographies, today announced the successful launch of Myx Sapphire, its fourth national securities Exchange for us multi listed options. With the rollout of options on its first symbol, IBM Mayx Safire will begin offering trading in additional symbols in multiple phases on a weekly schedule, commencing next week and continuing through October 21, 2024. The launch of Mayx Sapphire Electronic Exchange will be followed by the opening of a physical trading floor in Miami, Florida in 2025. Mayak Sapphire will be the first national securities exchange to establish operations in Miami. This space will include a next generation trading floor ancillary office space for Myx employees and market participants, conference facilities and broadcast media space.
[00:15:22] Here's a story from Bloomberg News.
[00:15:25] The headline chinese stock trading plummets in new sign of waning confidence share transactions in China shrank to their lowest level in over four years as a local bond market rally hit a fever pitch in a weakening economy. Turnover on the Shanghai and Shenzhen borsas fell to a combined ₩496 billion, that's $69.1 billion on Monday, the thinnest since May of 2020. That was also the lowest versus China's entire market capitalization since late 2019, as the world's second largest stock market is on track for its fourth consecutive year of losses. An unprecedented housing crisis has further limited investors options, prompting surging demand for government bonds that has alarmed regulators. While a sharp drop in trading volume often signals pessimism is near a bottom, several such episodes in China in the past few years have preceded panic driven selling that pushed the market to new lows.
[00:16:40] Here's another story, this one from Reuters China's outbound investing quota crunch spurs foreign asset managers to get creative soaring demand from chinese investors for offshore investments has left foreign banks and fund managers scrambling to ration outbound investing quotas, despite the recent sell off in the us and japanese markets. To cope with the surging appetite, firms using Chinas qualified domestic institutional investor, or QDII program are taking steps to get around the quota crunch. Executives from a foreign bank, fundhouse and wealth management unit said were grateful for your attentive listening to the John Lothian News Daily Update.
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