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Federal Reserve Issues Federal Open Market Committee Statement
November 2, 2011--Information received since the Federal Open Market Committee met in September indicates that economic growth strengthened somewhat in the third quarter, reflecting in part a reversal of the temporary factors that had weighed on growth earlier in the year. Nonetheless, recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated. Household spending has increased at a somewhat faster pace in recent months. Business investment in equipment and software has continued to expand, but investment in nonresidential structures is still weak, and the housing sector remains depressed.
Inflation appears to have moderated since earlier in the year as prices of energy and some commodities have declined from their peaks. Longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually toward levels that the Committee judges to be consistent with its dual mandate. Moreover, there are significant downside risks to the economic outlook, including strains in global financial markets. The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate further. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.
To support a stronger economic recovery and to help ensure that inflation, over time, is at levels consistent with the dual mandate, the Committee decided today to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.
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Source: FRB
Fed slashes growth forecasts
November 2, 2011--The US Federal Reserve slashed its growth forecasts and forecast low inflation for years to come on Wednesday but made no short-term changes to monetary policy.
Markets rallied as investors anticipated that the dismal outlook for growth and the prospects for inflation will eventually prompt the Fed to ease monetary policy further. The were also encouraged by chairman Ben Bernanke’s statement that more asset purchases are a “viable option”.
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Source: FT.com
Bet on volatility goes awry after Vix jump
November 2, 2011--Investors who bet that US equity volatility was set to keep falling in the wake of a eurozone deal on its debt crisis have been wrongfooted as Wall Street’s Vix – its so-called “fear gauge” – has surged in recent days.
After closing last week below 25, the Vix, which is a measure of expected volatility in the S&P 500 and commonly know as a gauge of investor fear or complacency about risk, was up more than 30 per cent at 33.34 on Wednesday, and rose as high as 37.53 on Tuesday.
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Source: FT.com
Northern Lights files with the SEC
November 1, 2011--Northern Trust has filed a registration with the SEC for the ArrowShares Global Yield ETF.
view filing
Source: SEC.gov
Report to the Secretary of the Treasury from the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association
November 1, 2011--Dear Mr. Secretary:
Since the Committee last met in August, economic activity indicators have firmed and real GDP in the third quarter expanded at a 2.5% annual rate, a noticeable acceleration from the 0.8% growth rate experienced in the first half of the year.
Real final sales reached a 3.6% growth pace in the third quarter, an even greater acceleration from its modest 0.8% growth pace in the first half. Economic activity has received support recently from a rebound in motor vehicle production and an easing in energy prices. Early indications suggest the economy continues to expand at a reasonable pace in the fourth quarter. Despite some progress recently, the ongoing debt crisis in Europe remains a downside risk to domestic economic activity. As was the case at the last meeting, the outlook for fiscal policy remains considerably uncertain, and expectations regarding budget deliberations continue to shape the outlook for next year.
The third quarter rebound in growth was driven by a pick-up in domestic final sales which accelerated to 3.2% annual growth rate, up from 1.3% the prior quarter, as both households and businesses quickened their pace of purchases. Net exports contributed 0.2%-point to growth last quarter, a surprisingly large gain, as imports expanded at only a 1.9% annual rate despite a large rebound in auto imports following earlier supply disruptions. Real inventory accumulation slowed markedly to only $5.4 billion at an annual rate last quarter subtracting 1.1%-point from real GDP growth. Industrial activity has been robust lately and the unexpected strength in third-quarter final sales and weakness in third-quarter inventory investment improves prospects for continued solid growth in the fourth quarter.
BlackRock Praises Regulators’ Coordination on Hedge Fund Secrets
November 1. 2011--U.S. regulators were responsive to industry concerns over new disclosures for private-fund firms, changing the final rule to prevent unnecessary duplication, said Barbara Novick, co-founder and vice chairman of BlackRock Inc. (BLK), the world’s biggest fund manager.
Private-equity and hedge funds will start reporting operational information to regulators next year as part of a government effort to prevent future financial crises. The reports they are required to file with the Commodity Futures Trading Commission and Securities and Exchange Commission will be substantially similar, according the text of the final rule released yesterday.
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Source: Bloomberg
CME Group Inc. Reports Strong Third-Quarter Financial Results Driven By Record Revenues And Operating Margin
November 1, 2011--CME Group Inc. (NASDAQ: CME) today reported that third-quarter revenues increased 19 percent to a record $874 million and operating income increased 29 percent to $572 million compared with third-quarter 2010.
Third-quarter 2011 operating margin was 65 percent, the highest quarterly GAAP operating margin to date, and up from 60 percent in the third quarter of 2010. Operating margin is defined as operating income as a percentage of total revenues.
Third-quarter net income attributable to CME Group was $316 million, up 29 percent compared with the third quarter of 2010. Diluted earnings per share were $4.74, up 30 percent compared with the same period last year.
"CME Group's core business continued to perform very well, and during the quarter we delivered significant growth in revenue, operating income and earnings per share," said CME Group Executive Chairman Terry Duffy. "On the regulatory front, we were pleased to see the CFTC rulemaking on position limits establish equivalent limits for physically and cash-settled contracts, other than natural gas. We will continue to work closely with regulators and market participants during this important rulemaking process."
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Source: CME Group
ISE Reports Business Activity for October 2011
November 1, 2011 –ISE is the largest equity options exchange in October with market share of 20.1%, excluding
dividend trades.
Dividend trades made up 1.2% of industry volume in October 2011.
The International Securities Exchange (ISE) today reported average daily volume of 3.4 million contracts
in October 2011. This represents an increase of 16.9% compared to October 2010. Total options volume
for the month was 72.1 million contracts.
ISE was the largest U.S. equity options exchange in October
with market share of 20.1%*. ISE market share has gained steadily for the past four months, due in part
to the completion of the Optimise™ rollout and its related enhancements, including lower latency, new
functionality and improved reliability and stability. ISE’s new trading rights program for Competitive Market
Makers has also benefitted the exchange by adding new liquidity providers.
Business highlights for the month of October include:
On October 5, ISE announced that UBS had launched the ETRACS Monthly 2xLeveraged ISE Cloud Computing Total Return Index ETN (Ticker: LSKY). This exchange-traded note (ETN) is
based on the ISE Cloud Computing Index™, a benchmark tracking companies actively involved in the cloud computing industry.
On October 25, ISE introduced the ISE Implied Volatility and Greeks FeedTM, a joint offering from ISE and Hanweck Associates. Powered by Hanweck Associates’ high-performance VoleraTM
engine, this feed provides real-time, low-latency, tick-level options analytics for all equity, index
and ETF options traded on the nine U.S. options exchanges.
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Source: International Securities Exchange (ISE)
Start of trading for two new ETFs on BM&FBOVESPA: IT Now ISE and IT Now IGCT
November 1, 2011--Trading starts on BM&FBOVESPA on Monday (October 31) for two new Exchange Traded Funds, (ETFs): the IT Now ISE Index Fund and the IT Now IGCT Index Fund, which respectively track the BM&FBOVESPA Corporate Sustainability Index (ISE) and BM&FBOVESPA Corporate Governance Trade Index (IGCT).
The ticker symbol for the IT Now ISE Index Fund is ISUS11 and for the IT Now IGCT Index Fund is GOVE 11.
Source: BM&FBOVESPA
iShares files with the SEC
November 1, 2011--iShares has filed a post-effective amendment, registration statement with the SEC for the iShares MSCI Emerging Markets Energy Sector Capped Index Fund.
view filing
Source: SEC.gov
