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NYSE suspends trading in three Russia-exposed ETFs
March 4, 2022--The New York Stock Exchange Arca halted trading in three Russia-focused exchange traded funds (ETFs) on Friday, following tightening of economic sanctions by Western governments against Russia after its military invasion of Ukraine.
The exchange stopped trading in iShares MSCI Russia ETF, Franklin FTSE Russia ETF and the Direxion Daily Russia Bull 2X Shares due to regulatory concerns, according to its website.
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Source: reuters.com
Congressional Budget Office-H.R. 4616, Adjustable Interest Rate (LIBOR) Act of 2021
March 3, 2022--Summary
H.R. 4616 would establish a process for certain financial contracts that currently reference the London Interbank Offered Rate (LIBOR) to instead reference a replacement benchmark interest rate upon the occurrence of certain events affecting LIBOR.
LIBOR is an index rate (or interest rate based on a basket of similar financial transactions that adjusts as economic conditions change) that is commonly used in setting the interest rate for many adjustable-rate consumer financial products. The United Kingdom regulator that oversees the LIBOR panel has indicated that it will cease publication of the U.S. Dollar LIBOR after June 30, 2023. H.R. 4616 would task the Board of Governors of the Federal Reserve System with identifying replacement rates prior to that date based on the Secured Overnight Financing Rate, an index rate based on the costs of borrowing that is collateralized by U.S. Treasury securities.
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Source: CBO (congressional Budget Office)
Federal Reserve Board-Beige Book
March 2, 2022--Overall Economic Activity
Economic activity has expanded at a modest to moderate pace since mid-January. Many Districts reported that the surge in COVID-19 cases temporarily disrupted business activity as firms faced heighted absenteeism. Some Districts attributed a temporary weakening in demand in the hospitality sector to the rise in cases. Severe winter weather was also cited as disrupting activity.
As a result, consumer spending was generally weaker than in the prior report. Reports on auto sales were mixed. Manufacturing activity continued to grow at a modest pace. All Districts noted that supply chain issues and low inventories continued to restrain growth, particularly in the construction sector. Reports from banking contacts indicated some weakening of financial conditions, although loan demand was generally unchanged. Demand for residential real estate was generally strong, although many Districts reported no change in home sales due to seasonal trends and low inventories. Agriculture reports were somewhat mixed, as some Districts experienced difficult growing conditions while others benefited from higher crop prices. Reports on the energy sector indicated modest growth. Among reporting Districts, the overall economic outlook over the next six months remained stable and generally optimistic, although reports highlighted an elevated degree of uncertainty.
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Source: federalreserve.gov
SEC Proposes Short Sale Disclosure Rule, Order Marking Requirement, and CAT Amendments
February 25, 2022--Agency Also Reopens Comment Period for Proposed Rule 10c-1
The Securities and Exchange Commission today announced that it has voted to propose changes that would provide greater transparency to investors and regulators by increasing the public availability of short sale related data.
New Exchange Act Rule 13f-2 and the corresponding Form SHO would require certain institutional investment managers to report short sale related information to the Commission on a monthly basis. The Commission then would make aggregate data about large short positions, including daily short sale activity data, available to the public for each individual security.
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Source: SEC.gov
Dimensional Adds Three New US Equity ETFs to Growing Offering
February 24, 2022--Dimensional Fund Advisors, a global leader in systematic multifactor investing, expanded its exchange-traded funds (ETFs) offering with today's listing of three new US equity ETFs on the New York Stock Exchange (NYSE). The new ETFs offer broadly diversified exposure to US small cap value and US high profitability 1 equities, as well as US real estate markets.
"We continue to build out Dimensional's ETF suite, which not only offers the benefits of passive strategies-such as broad diversification, low turnover, and transparency-but also provides the advantages of active, flexible portfolio management to continually target higher expected returns over traditional indexes," said Co-CEO and Chief Investment Officer Gerard O’Reilly. "These areas of the market are core to our expertise, as Dimensional has been researching and managing small cap value, high profitability, and real estate strategies for decades."
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Source: Dimensional Fund Advisors
The weakness of average inflation targeting
February 22, 2022--Introducing average over time without defining what this means is counterproductive and current levels of inflation in the US will sooner or later expose this weakness in the Fed's new strategy.
In the 2020 revision of monetary policy strategy, the US Federal Reserve adjusted the pursuit of an inflation rate at 2 percent, to inflation that 'averages 2 percent over time'.
Many worry that using average inflation over time in order to decide on policy for the future is problematic.
The first and obvious issue is the length of the period across which policymakers average out inflation.
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Source: bruegel.org
WisdomTree Launches Battery Value Chain and Innovation Fund (WBAT)
February 17, 2022--Targeted investment strategy focusing on exposure to companies in energy storage solutions and the development of battery technologies
WisdomTree Investments, Inc. (NASDAQ: WETF), an exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor and asset manager, announced today the launch of the WisdomTree Battery Value Chain and Innovation Fund (WBAT) on the CBOE.
WBAT seeks to track the price and yield performance, before fees and expenses, of the WisdomTree Battery Value Chain and Innovation Index (WTBAT), and has an expense ratio of 0.45%.
"As the world shifts towards renewable energy, due to environmental and technological drivers, we expect a growing demand for electric vehicles and the batteries central to their development," said Jeremy Schwartz, Global Chief Investment Officer at WisdomTree. "The WisdomTree Battery Value Chain and Innovation Fund (WBAT) was built for investors looking to gain exposure to battery technologies and the megatrend of energy transformation."
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Source: Source: WisdomTree Investments, Inc.
Minutes of the Federal Open Market Committee, January 25-26, 2022
February 16, 2022--The Federal Reserve Board and the Federal Open Market Committee on Wednesday released the attached minutes of the Committee meeting held on January 25-26, 2022.
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Source: federalreserve.gov
ETF Launches Are Already on Track to Top Last Year's Record Pace
February 14, 2022--50 funds launched this year, up from 38 at this point in 2021
Pent-up demand, rise in active strategies are driving growth
Issuance of new exchange-traded funds are piling up this year and threatening to overtake 2021's historic boom as firms bet big on continued growth.
According to Bloomberg data, 50 new funds have launched in 2022, compared with 38 at this point last year. There's also been an uptick in the total number of actively managed strategies this year to 33 from 27, reflecting the growing preference for ETFs over mutual funds, said EQM Capital Chief Executive Officer Jane Edmondson.
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Source: bloomberg.com
Median Inflation Gauge Offers Better Read on Price Trends
February 14, 2022--Using an alternative measure may help separate the signal from the noise.
Economists debating inflation in the United States are confronting a difficult challenge: stripping out volatile price changes to gauge underlying pressures.
The most common measure of underlying or "core" inflation, which excludes volatile food and energy prices, has been hard to read during the pandemic. The traditional measure came into wider use in the 1970s, when volatile energy prices caused inflation spikes.
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Source: IMF