Episode Transcript
[00:00:06] Welcome to the John Lothian News Daily Update podcast for November 8, 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 we have a special sponsorship announcement IEX joins as Sponsor of John Lothian News to mark entry into equity options trading John Lothian News is proud to announce IEX as its newest sponsor, underscoring a shared commitment to industry transparency and innovation. IEX's sponsorship includes the flagship John Lothian Newsletter, the JLN Options Newsletter and the website john lothiannews.com where they will support vital industry insights and connect with JLN's engaged readership as IEX enters the Equity Options Exchange space. The collaboration marks the continuation of a long standing relationship between IEX and John Lothian News, built on a mutual dedication to advancing market integrity and informed trading. Since 2000, the John Lothian Newsletter has been a respected source in the industry to delivering daily updates, expert commentary and deep dives into the latest trends and issues that matter most to traders, market participants and decision makers alike. John Palmer, Head of Options at IEX Group, commented on the collaboration we are excited to work with one of the industry's most respected voices to share the value of our customer first solutions for Options. The asset class continues to evolve and John is a trusted source for the trends that matter most to investors, market participants and decision makers.
[00:02:04] Here's a quote from me, publisher of John Lothian. We are thrilled to welcome IEX as a sponsor of John Lothian News and into the equity options exchange space. IEX has long been a respected leader in promoting transparency and fairness in the equities market and their expansion into equity options is a powerful testament to that mission. We're excited to support IEX's journey and amplify their vision through our platform, helping our readers stay at the forefront of industry developments.
[00:02:41] Through this partnership, IEX aims to further engage with the trading community, providing new insights and resources to inform its foray into equity options trading while promoting integrity and growth in the marketplace. Stefan Bujna, Chairman and CEO of Euronext, announced Euronext's new strategic plan Innovate for Growth 2027, which builds on the company's transformation from 2020 and early achievement of its Growth for Impact 2024 targets. The plan focuses on three priorities accelerating growth in non volume businesses expanding FICC that's fixed income, currency and commodities trading and clearing and strengthening Euronext's trading leadership by 2027. Euronext aims to become a more diversified and efficient gateway to European capital markets, reinforcing its commitment to ESG and AI while positioning itself as the backbone of the European Savings and Investment Union.
[00:03:55] Congratulations to CME Group Chairman and CEO Terry Duffy, who was given another year on his contract, and to Lynne Fitzpatrick, who added the title of president along with her CFO role. Additionally, CMIE announced that Julie Holzreicher would be stepping down as Chief operating officer and assuming a senior advisor role and would be replaced as COO by Suzanne Sprague, who has been senior managing Director and global head of Clearing and post Trade services since 2022 and assumes the title of chief operating officer and global head of clearing. Sprague is taking on additional responsibilities beyond her current role, a CME spokesman said. CFTC Commissioner Carolyn Pham appeared on CNBC on Thursday from Singapore and emphasized the need for quote, smart regulation for crypto assets in the US Advocating for clear upfront rules rather than regulation by enforcement. She argued that Americans want regulators with real world business experience to create policies that balance innovation with consumer and market safety. Pham noted that US Companies often pursue crypto crypto innovations abroad due to regulatory clarity in places like the EU and Singapore, but that better clarity at home would allow for more domestic use cases. She proposed establishing regulatory sandboxes and pilot programs to support innovation, with her Global Markets Advisory Committee already providing frameworks such as a U.S. digital asset taxonomy and guidelines for tokenized collateral. Flack Global Metals, or fgm, a steel industry platform, has executed the first ever European hot rolled steel options trade. The trade was handled by Flack Metals Trading SA, FGM's global trading arm in Switzerland and cleared on the Chicago Mercantile Exchange. This new options trade aims to enhance market liquidity and provide better price discovery, supporting FGM's international operations in ferrous and non ferrous material trading. The Financial Times yesterday published a special report on business education research insights that explores alternative ways to measure the impact of business school research focusing on relevance and resonance beyond academia. It highlights how top institutions like Chicago Booth lead in producing research that informs management and aligns with societal goals. The report also examines new tools that analyze academic impact more comprehensively than traditional citation metrics and discusses how real world case studies are valuable in developing future leaders. Despite high readership, business authors often struggle for recognition within academia, though download metrics indicate significant real world influence. Peter Best has joined Clear Token as chief operating officer. He shared on LinkedIn. He has had a couple of tours at ICAP and was at the NYSE during his career. Here are the headlines from in front of fow's Paywall from some recent stories Analysis Marex expects no competitive threat from CME broking approval SGX total volumes up 52% in October to daily trading record Euronext plans move into European fixed income futures and CME extends Duffy contract by one year Changes operating chief Our most read stories from our previous edition of JLN Options were Options trading is more popular than ever despite the risks from the Wall Street Journal.
[00:08:15] VIX declines ahead of Fed decision extending post election slide from MarketWatch and you want volatility? Here's some volatility from Bloomberg. It's a podcast 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 sponsored content entry from our friends at JPX FIA Forum Tokyo 2024 held at JPX Together with FIA and FIA Japan, OSE successfully hosted the FIA Tokyo Forum on October 10, 2024 at the Tokyo Stock Exchange. The event welcomed over 220 attendees representing more than 100 companies. The program opened with remarks from Mr. Nakaso, Chairman of Fin City Tokyo, and Mr. Yoko Yama, President and CEO of OSE. These introductions were followed by two engaging panel discussions and an insightful address by Mr. Ito, Commissioner of the Financial Services Agency. During the panel discussions, industry leaders, traders from global exchanges and brokerages shared their perspectives on the Japanese market and their development plans. They also explored practical applications of OSE's recent innovations in the interest rates market, including the newly launched three month totem futures. Mr. Kazuhisa Kakazaki, executive Director of OSE Tocom, joined a panel to discuss JPX's product advancements. He highlighted developments such as the three month ton of futures, Tocom electricity futures and the revival of the single stock options market. For further details, refer to a link in today's newsletter. Here's a story from Bloomberg and Matt Prediction markets are a thing now. Also, CZ is relaxed, green hushing and a fake Paramount buyer. One thing that I thought was a little interesting on Tuesday is that the prediction markets for the US Presidential elections didn't really move all day. Kelshi, for instance had Donald Trump at 57.1% at 6am At 11am he was up to 58.6, at 2pm down to 57% and at 7pm he was back up to 57.1% where he started. The day after that, polls closed, results started coming in and the odds moved pretty rapidly. 61% at 8pm, 74.1% at 10pm, 92.5% by midnight. But essentially no new information was incorporated into prices during the day. My comment Matt Levine wrote that prediction markets are not a natural savings device.
[00:11:27] I emailed him a note about forecast acts and how they pay interest on open positions. He responded with interest. We shall see where this leads. Here's an entry on points and figures from Jeff Carter. The headline Should Exchanges own Their Own Commission Merchants Vertical Integration One business item for sure you didn't notice slipped into the business cycle In October, CME Group, which owns several commodity exchanges, filed for and received permission from the Commodity Futures Trading Commission to create its own Futures Commission merchant. It has thrown the brokerage industry into a tizzy. This might be a big deal to the American and worldwide economy, but you have to understand why in order to connect the dots to see why it also is a big deal. Because the structure of the nascent cryptocurrency industry is still being built and evolving, how it is regulated will have a big part in determining how the structure looks in the future.
[00:12:34] Jeff Carter was a CME board member when the exchange started the change to become publicly traded and decisions were being discussed about how they should structure the exchange. Worth the read? Here are the top three stories from Thursday's jln. Our top clicked item on Thursday was the JLN video Thomas Peterfy on Forecast X Building a Buy Only Market to Transform Event Trading and Crowd Based Insights, which we published on November 1. Second were the Kalshi Clear registration documents on the CFTC website. Third was Merix Raises Guidance as revenue Rises a third from fow. Here are the top three stories from the Lead section of today's jln. The first story is from the Financial Times. The headline Euronext plans a US Style Prospectus to boost Corporate Fundraising. The European exchanges operator aims to harmonize listing information across seven countries. Euronext will create a US Style single prospectus for companies raising money on its seven stock exchanges, aiming to make information more accessible to investors and kick start Europe's flagging fundraising market.
[00:13:50] Executives at Europe's largest stock exchange group will in the coming weeks develop a standardized form that can be used by companies looking to raise funds on its venues. The documents would contain key information for investors and be written in English with an appendix in their local language. Chief Executive Stephane Bujna hold the Financial Times here's another story. This is a press release from the CME Group. The headline CME Group Announces Employment Agreement Extension for Chairman and Chief Executive Officer Terry Duffy. CME Group, the world's leading derivatives marketplace, today announced that its board will extend Chairman and Chief executive officer Terry Duffy's contract through December 31, 2026. The company also announced Lynne Fitzpatrick will take on the expanded role of president and chief financial officer. Additionally, its chief operating officer, Julie Holzreicher, has decided to step down from her role to begin serving as an advisor to the company. Suzanne Sprague will succeed Holzrecker as chief operating officer and global head of clearing. Here's another story, this one from the Lex column of the Financial Times. The headline Elon Musk Might be Wall Street's Great White Whale. The US Election and the elevation of the Tesla bus could lead to big deal fees. The race is on to be his favorite consigliere.
[00:15:24] Wall street consigliere are readying for a rush of new business. Banks who advise on capital raisings or mergers and acquisitions expect a deluge of fees as Donald Trump returns to the presidency. But some clients are suddenly more valuable than others. The potential snapback in deals is enormous. Global mergers are traditionally equivalent to around 20% of US GDP in any given year, but in 2024 they're around half that. If M and A volumes bounce back to 25% as in 2021, that's $4 trillion worth of additional activities. Fees range anywhere from 1 to 5% for banks that win hearts, minds and mandates.
[00:16:14] We're 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 a review on Apple Podcasts or whatever platform on which you access this podcast. 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 johnlotheanews.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.
