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High-Frequency Trading Provides Essential Liquidity .
January 4, 2013--While high-frequency trading firms can ably defend themselves, Knight Capital Group's view as a leading market maker is that high-frequency trading didn't cause the flash crash, the withdrawn BATS Global Markets IPO, the mishandled Facebook IPO or our Aug. 1 technology issue.
Further, any balanced discussion regarding the market impact of high-frequency trading must acknowledge that HFT firms often provide essential liquidity to all market participants.
The article fails to note that retail investors today benefit from the lowest trading costs and the highest execution quality in history. Under measures established by the Securities and Exchange Commission, independent data show near-continual improvement in terms of speeds, spreads and price improvement since inception. Likewise, independent data bear out the dramatic declines in the costs of online and broker-assisted trades since the mid-1990s.
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Source: Wall Street Journal
Replication Index Up 6.96% In 2012
January 4, 2013--Hedge funds limped to a disappointing finish in 2012, returning less than 7%, according to an industry replication index.
IndexIQ's IQ Hedge Composite Beta Index rose 0.43% last month to reach the figure. Six of its seven strategy benchmarks were also in the black, but none exceeded the return for the Standard & Poor's 500 Index last year, 16%
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Source: FIN Alternatives
New rules to help exchanges break brokers' grip on swaps
January 3, 2013--The world's top brokers face a fight to hold onto hundreds of millions of dollars of revenue this year when U.S. legislation throws open the vast swaps trading market to stock exchanges.
Brokers like ICAP (IAP.L) and BGC Partners (BGCP.O) make around a third of their revenue from the $640 trillion (396 trillion pounds) industry for trading swaps - financial instruments used by companies to cover their exposure to changes in interest rates, foreign exchange rates and credit ratings.
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Source: Reuters
US regulators give banks time to spin off swap trading
January 3, 2013--Banks could have up to three extra years to comply with a new U.S. rule requiring firms that receive federal deposit insurance to spin off some of their swaps trading into separate arms, U.S. regulators said on Thursday.
The Office of the Comptroller of the Currency said it would "consider favorably" requests for transition periods before banks must comply with the so-called "swaps push-out" rule.
Under the rule, included as part of the 2010 Dodd-Frank financial oversight law, banks that receive deposit insurance and other government backstops have to set up separate arms to trade certain swaps.
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Source: Reuters
US ETFs enjoy record breaking 2012
January 3, 2013--Record levels of new cash poured into US listed exchange traded funds and products last year as BlackRock regained the title of fastest growing ETF manager from its rival Vanguard for the first time since 2009.
US listed ETFs (funds and products) gathered net inflows of $187.2bn in 2012, up 58.1 per cent on last year’s inflows of $118.4bn, and surpassing the previous all-time high for annual inflows of $176bn set in 2008, according to ETFGI, the consultancy.
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Source: FT.com
Vanguard's head of equities steps down as new CIO steps in
Buckley replaces Sauter but equity hole opens with departure of Bhagat
January 3, 2013--The start of the New Year marked the official passing of the chief investment officer's torch at The Vanguard Group Inc. and left the firm with a hole at the top of its equity investment division.
Tim Buckley has assumed the role of chief investment officer following the retirement of Gus Sauter, which went into effect Dec. 31. Mr. Sauter had served as chief investment officer since the position was created in 2003.
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Source: Investment News
Minutes of the Federal Open Market Committee, December 11-12, 2012
January 3, 2013--The Federal Reserve Board and the Federal Open Market Committee on Thursday released the attached minutes of the Committee meeting held on December 11-12, 2012.
A summary of economic projections made by Federal Reserve Board members and Reserve Bank presidents for the December 11-12, 2012 meeting is also included as an addendum to these minutes.
The minutes for each regularly scheduled meeting of the Committee ordinarily are made available three weeks after the day of the policy decision and subsequently are published in the Board's Annual Report. Summaries of economic projections are released on a quarterly schedule. The descriptions of economic and financial conditions contained in these minutes and in the Summary of Economic Projections are based solely on the information that was available to the Committee at the time of the meeting.
view Minutes of the Federal Open Market Committee
December 11-12, 2012
Source: Federal Reserve Board
OneChicago Announces Trading Volume for December 2012
Volume in December up 142% as compared to the same period in 2011
Total 2012 volume tops 6.3 million, up 74% above prior year levels
January 2, 2013--OneChicago, LLC (OCX), an equity finance exchange, today announced that December 2012 volume of 1,291,562 was up 168% over November 2012.
December 2012 highlights include:
1,272,739 Exchange Futures for Physicals (EFPs) and blocks were traded. December 2012 EFPs and blocks activity represented $5.6 billion in notional value.
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Source: OneChicago
CFTC Announces Real-Time Public Reporting of Swap Transactions and Swap Dealer Registration Began December 31, 2012
January 2, 2013--The Commodity Futures Trading Commission (CFTC) today announced that both real-time public reporting of swap transactions and swap dealer registration, pursuant to reforms enacted by Congress, began on December 31, 2012.
“Two of the most significant Dodd-Frank reforms began implementation this week,” said CFTC Chairman Gary Gensler. “Real-time reporting brings transparency to the formerly opaque swaps market. Also this week, the largest entities dealing in the swaps market became provisionally registered as swap dealers.
“With these historic reforms, the public, for the first time, can see the price and volume of swap transactions, just as it has benefitted from transparency for decades in the securities and futures markets. The public also will benefit as swap dealers now will be subject to common-sense standards for sales practices, recordkeeping and business conduct rules that will help lower risk to the rest of the economy.”
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Source: CFTC.gov
US Equity Performance-Dow Jones Industrial Average-2012 Year In Review
January 2, 2013--At A Glance
When All is Said & Done-The Dow Jones Industrial Average finished the year at 13,140.14, up 886.58 or 7.26%. This level is off 1,024.39 or 7.23% from the DJIA's record close of 14,164.53, which was hit on October 9, 2007.
Eight of the last ten years have enjoyed annual gains, though of course, the loss of nearly 34% in 2008 continues to leave a mark.
Leader & Laggard - The leading individual contributor to the DJIA in 2012 was Home Depot (HD), which added 151.31 of the total 886.58 in index points gained on the year. The greatest individual detractor was McDonald’s (MCD) dragging down the DJIA by 91.38 points.
Industry Performance - The leading contributing industry to 2012 performance was Financial Services followed by Consumer Services and Industrials, industries which tend to outperform in recovering markets; the worst performer was Technology.
The Good - The biggest Single Day Gain (Point & Percent) – up 286.84 or +2.37% - was June 6, spurred by comments from policy makers raised investors’ hopes that further stimulus money was forthcoming.
The Bad - The biggest Single Day Loss (Point & Percent ) – down 312.94 or -3.26% - was November 7, following President Obama’s reelection, concerns about resolution of the “Fiscal Cliff”, and continued concerns about economic weakness in Europe.
Changes - There was one addition/deletion to the DJIA in 2012: on September 24, UnitedHealth Group replaced Kraft Foods.
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Source: S&P Dow Indices
