Bloomberg (October 2)
For an entire trading day, a “piece of hardware took down Japan’s $6-trillion stock market,” marking the longest shutdown “since the exchange switched to a fully electronic trading system in 1999.” Besides drawing criticism, the malfunction “shone a spotlight on a lesser-discussed vulnerability in the world’s financial plumbing — not software or security risks but the danger when one of hundreds of pieces of hardware that make up a trading system decides to give up the ghost.”
Tags: Danger, Financial plumbing, Hardware, Japan, Malfunction, Security risks, Shutdown, Software, Stock market, Trading, TSE, Vulnerability
Bloomberg (June 10)
“Pity Europe’s banks. For years, they have been in retreat, losing business in their own back yards to Wall Street rivals. Now the battlefront is shifting – but what looks like an opportunity to gain ground may be just the opposite…. Shackled by sluggish economic growth at home and record-low interest rates that are crushing margins, European firms have been unable to compete with U.S. rivals in trading and capital markets. Those same dynamics look set to play out again in transaction banking,” which is set to displace fixed income as the largest revenue driver by 2020.
Tags: Banks, Battlefront, Capital markets, Economic growth, Europe, Fixed income, Interest rates, Margins, Retreat, Rivals, Trading, Transaction banking, U.S., Wall Street
Pound Sterling Live (February 15)
“The British Pound is under pressure ahead of the weekend, holding the title of the worst-performing major G10 currency over the course of the past five trading days. Losses come as the government suffered a symbolic defeat…with pro-Brexit MPs voting against a motion tabled by the government.”
Tags: Brexit, Currency, Defeat, G10, Government, Losses, Pound, Trading, UK, Worst-performing
Barron’s (January 29)
“Interest rates and volatility have been so low for so long that what was once abnormal is starting to look normal,” leading investment banks to adopt different approaches. Goldman has maintained its trading unit, “which lives or dies on volatility and which sealed Goldman’s reputation as the elite firm on Wall Street,” even though its revenue “has been reduced to crumbs.” In contrast, Morgan Stanley slashed the head count at its trading unit and has seen its market value surpass Goldman’s. But this could prove short-lived. “When trading conditions improve,” revenue from fixed income currency and commodities (FICC) “could bounce back quickly. No one else is as poised as Goldman to profit.”
Tags: Abnormal, FICC, Goldman, Head count, Interest rates, Investment banks, Morgan Stanley, Normal, Trading, Volatility, Wall Street
The Guardian (July 2)
“As the true extent of the Brexit farce becomes more apparent, it is now open warfare between the Brexiters, while the rest of the world…look on in sympathetic bewilderment.” Amid growing “evidence for concern about Brexit-induced potential loss of trading and investment opportunities,” there are growing hopes that the “transition” may be extended indefinitely.
Tags: Bewilderment, Brexit, Farce, Investment, Loss, Opportunities, Sympathetic, Trading, Transition
Institutional Investor (June 23)
“The referendum on U.K. membership in the European Union continues to dominate market risk narratives, with both equity futures and the pound sterling strengthening in early trading, suggestion a degree of confidence among investors that the nation will remain in the EU.”
Tags: Confidence, Equity futures, EU, Investors, Market risk, Membership, Referendum, Sterling, Trading, U.K.
Institutional Investor (May 30)
Firms “are doubling down on machine learning and other quantitative investing efforts.” More advanced than rule-based algorithms, “with machine learning, a computer sifts through billions of data points, picking up patterns. Armed with this knowledge, it learns trading behaviors such as buying dips or selling high over time, based on what it has gleaned about the market from past and present data.” Despite the inroads, however, human ingenuity remains essential.
Tags: Algorithms, Computer, Data points, Dip, Firms, Ingenuity, Investing, Machine learning, Market, Patterns, Quantitative, Trading
Wall Street Journal (July 28)
When China’s roller-coaster stock market plunged downward in early July, “the Communist Party responded with every measure conceivable to fix the market.” This included the suspension of trading. “At one point in the middle of July 97% of all listed companies’ shares were not trading, 51% because management had sought a suspension and 46% because the share prices were down by the 10% daily limit.” On July 27, the Shanghai Composite took its biggest tumble ever, but this downswing “may be good news. Monday’s drop was due in large part to investor fears that the government is pulling back on market support. If Beijing has learned from its failure to prop up stock prices, that could mean the market finds a bottom.”
Tags: Bottom, China, Government, Listed, Market, Shanghai Composite, Shares, Stock market, Support, Suspension, Trading
Bloomberg (July 7)
As bad as China’s stock market rout is, things could be even worse. “Chinese companies have found a guaranteed way to prevent investors from selling their shares: suspend trading. Almost 200 stocks halted trading after the close on Monday, bringing the total number of suspensions to 745, or 26 percent of listed firms on mainland exchanges.” Valued at $1.4 trillion, the suspended shares account for 21 percent of China’s market capitalization. “If not for the halts, a 28 percent plunge in the Shanghai Composite Index from its June 12 peak would probably be even deeper.”
Tags: China, Exchanges, Market-cap, Rout, Shanghai Composite, Stock market, Suspension, Trading
Euromoney (May Issue)
Trading in fixed income, currencies and commodities (FICC) is being transformed in a manner that’s benefiting investors and putting the squeeze on many big banks. “The move to electronic trading is accelerating; margins are getting tighter (no sign of oligopolistic pricing here), as competition and transparency grows, and the costs of maintaining a leading tech platform, once built, never go away.”
Tags: Banks, Commodities, Competition, Currencies, Fixed income, Investors, Margins, Oligopolistic pricing, Tech platform, Trading, Transparency