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U.S. economy shrank at 5% annual rate in the first quarter
May 28, 2020--The U.S. economy shrank at an even faster pace than initially estimated in the first three months of this year with economists continuing to expect a far worse outcome in the current April-June quarter.
Gross domestic product, the broadest measure of economic health, fell at an annual rate of 5% in the first quarter, a bigger decline than the 4.8% drop first estimated a month ago, the Commerce Department reported.
The U.S. economy shrank at an even faster pace than initially estimated in the first three months of this year with economists continuing to expect a far worse outcome in the current April-June quarter.
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Source: cnbc.com
HSBC Launches First Equity Index Products Powered by AI and Big Data
May 27, 20202--HSBC worked with EquBot and IBM Watson to introduce the AiPEX family of artificially intelligent equity indices.
HSBC today announced the launch of the AI Powered US Equity Index (AiPEX) family, the market's first to use artificial intelligence (AI) as a method for equity investing.
The AiPEX family of indices was developed by EquBot and leverages the AI capabilities of EquBot and IBM WatsonTM to turn Big Data into investment insight.
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Source: HSBC
Beige Book-May 27, 2020
May 27, 2020--Overall Economic Activity
Economic activity declined in all Districts-falling sharply in most-reflecting disruptions associated with the COVID-19 pandemic. Consumer spending fell further as mandated closures of retail establishments remained largely in place during most of the survey period. Declines were especially severe in the leisure and hospitality sector, with very little activity at travel and tourism businesses.
Auto sales were substantially lower than a year ago, although several Districts noted recent improvement. A majority of Districts reported sharp drops in manufacturing activity, and production was notably weak in auto, aerospace, and energy-related plants. Residential home sales plunged due in part to fewer new listings and to restrictions on home showings in many areas. Construction activity also fell as new projects failed to materialize in many Districts. Commercial real estate contacts mentioned that a large number of retail tenants had deferred or missed rent payments. Bankers reported strong demand for PPP loans. Agricultural conditions worsened, with several Districts reporting reduced production capacity at meat-processing plants due to closures and social distancing measures. Energy activity plummeted as firms announced oil well closures, which led to historically low levels of active drilling rigs. Although many contacts expressed hope that overall activity would pick-up as businesses reopened, the outlook remained highly uncertain and most contacts were pessimistic about the potential pace of recovery.
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Source: federalreserve.gov
CFTC.gov Commitments of Traders Update
May 21, 2020--The current reports for the week of May 19, 2020 are now available.
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Source: cftc.gov
SEC panel says agency should add sustainability disclosure rules
May 21, 2020--The SEC should update its reporting requirements for issuers to include ESG factors, the commission's investor advisory committee said Thursday, voting to approve a recommendation drafted by the committee's investor-as-owner subcommittee.
"The time has come for the SEC to address this issue," said the recommendation. ESG disclosure from issuers will provide investors "with the material, comparable, consistent information they need to make investment and voting decisions," and give issuers a uniform framework. It will also let the SEC take control of ESG disclosure "before other jurisdictions impose disclosure regimes on U.S. issuers and investors alike," the recommendation said.
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Source: pionline.com
J.P. Morgan Debuts Two Active Equity ETFs
May 21, 2020--J.P. Morgan Asset Management continued its aggressive push into the exchange-traded fund space with today's launch of two actively managed transparent equity ETFs.
The JPMorgan Equity Premium Income ETF (JEPI) seeks to generate current income and participate in capital appreciation by investing in stocks-mainly from the S&P 500 index-and in equity-linked notes, or ELNs
ELNs are derivative instruments that combine the economic characteristics of the S&P 500 and written call options in a single note, and they're designed to provide recurring cash flow by collecting premiums from the call options.
As described in the fund’s prospectus, the ELNs could reduce the fund's volatility by generating income that would reduce the losses incurred in its equity portfolio. On the flip side, the ELNs could limit the fund’s ability to fully participate in upside equity markets.
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Source: fa-mag.com
Coronavirus Shutdown Casts Doubt on Value of Exchange Trading Floors
May 21, 2020--NYSE's 4 p.m. auctions run more smoothly, study finds; investors get better prices for S&P 500 options
Investors won't necessarily benefit when the New York Stock Exchange and other market operators welcome traders back to their closed floors, new research suggests.
An academic study released Thursday found that NYSE's crucial 4 p.m. auctions, which determine end-of-day prices for thousands of stocks, ran more smoothly after the Big Board closed its floor to curtail the spread of the coronavirus. NYSE has questioned the study's conclusions.
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Source: wsj.com
CBO-Interim Economic Projections for 2020 and 2021
May 19, 2020--CBO estimates that real gross domestic product will contract by 11 percent in the second quarter of this year, which is equivalent to a decline of 38 percent at an annual rate, and that the number of people employed will be almost 26 million lower than the number in the fourth quarter of 2019.
The Sudden Drop in Economic Activity
The pandemic has disrupted the lives of millions of people. To mitigate the contagion, many households, businesses, and governments have taken measures collectively referred to as social distancing, which peaked in April 2020. The pandemic and social distancing have widely disrupted economic activity, causing a wave of job losses and ending the longest expansion since World War II.
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Source: cbo.gov
IMF Policy Paper-Measuring Economic Welfare: What and How?
May 18, 2020--Summary:
Calls for a more people-focused approach to statistics on economic performance, and concerns about inequality, environmental impacts, and effects of digitalization have put welfare at the top of the measurement agenda. This paper argues that economic welfare is a narrower concept than well-being.
The new focus implies a need to prioritize filling data gaps involving the economic welfare indicators of the System of National Accounts 2008 (SNA) and improving their quality, including the quality of the consumption price indexes. Development of distributional indicators of income, consumption, and wealth should also be a priority. Definitions and assumptions can have big effects on these indicators and should be documented. Concerns have also arisen over potentially overlooked welfare growth from the emergence of the digital economy. However, the concern that free online platforms are missing from nominal GDP is incorrect. Also, many of the welfare effects of digitalization require complementary indicators, either because they are conceptually outside the boundary of GDP or impossible to quantify without making uncertain assumptions.
view the IMF Policy Papers-Measuring Economic Welfare: What and How?
Source: IMF
Financial Stability Report
May 15, 2020--Overview
The coronavirus (COVID-19) pandemic has caused tremendous human and economic hardship across the United States and around the world. The pandemic and the measures taken to contain it have effectively closed some sectors of the economy since mid-March. Economic activity in the United States has contracted at an unprecedented pace, and the unemployment rate surged to 14.7 percent in April .
The disruptions to economic activity here and abroad have significantly affected financial conditions and have impaired the flow of credit. Policymakers in the United States and worldwide have taken extraordinary measures to strengthen the recovery once the health crisis passes. The Federal Reserve quickly lowered its policy rate to close to zero to support economic activity and took extraordinary measures to stabilize markets and bolster the flow of credit to households, businesses, and communities.
