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Fed Study Finds Virus Is a Powerful Downward Drag on Inflation
August 24, 2020--U.S. inflation has slowed sharply since the onset of the coronavirus pandemic and a new Federal Reserve study squarely pins the blame on a collapse in demand as consumers sheltered in home to avoid infection.
The Fed targets 2% inflation according to the personal consumption expenditure price index. It also pays close attention to a core reading of that gauge which strips out volatile food and energy prices. Both measures have plummeted since the pandemic, with year-on-year core PCE standing at 0.9% in June versus 1.9% in February.
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Source: bloomberg.com
FRBSF Economic Letter-Monitoring the Inflationary Effects of COVID-19
August 24, 2020--Inflation fell dramatically following the onset of the COVID-19 pandemic. Dividing the underlying price data according to spending category reveals that a majority of the drop in core personal consumption expenditures inflation comes from a large decline in consumer demand.
This demand effect far outweighs upward price pressure from COVID-related supply constraints. A new monthly data page from the San Francisco Fed tracks how sensitivity to the economic disruptions of COVID-19 affects different categories of inflation over time.
The unprecedented challenges caused by the coronavirus disease 2019 (COVID-19) pandemic has brought about abrupt and severe disruptions to economic activity. Social distancing sharply reduced consumer spending, particularly in sectors more sensitive to these measures such as restaurants and hotels (Dunn, Hood, and Driessen 2020). The pandemic also disrupted the supply chain, as many employees could not safely go to their workplace, reducing production below full capacity in certain sectors. By contrast, other sectors of the economy, such as information technology, appear to have been less, or even positively, affected by the pandemic (Kwan and Mertens 2020).
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Source: Federal Reserve Bank of San Francisco
"Premised on an assumption-unsupported by any cited facts-that ERISA fiduciaries are misusing ESG" :Investors slap back DoL plans
August 21, 2020--All but one investment manager opposed the moves in consultation, says coalition
The proposed rules by the US Department of Labor (DOL) on how fiduciaries of employee pension plans should treat ESG factors seem unpalatable for almost all the investment firms that responded to the public consultation.
Analysis by a group of investors has found that 95% of all respondents, not just those categorised as professional investors, oppose the controversial changes to the private pensions covered by the Employee Retirement Income Security Act of 1974 (ERISA).
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Source: responsible-investor.com
Competition to heat up among U.S. stock exchanges with new entrants
August 21, 2020--Three new U.S. stock exchanges are set to launch by the end of September, vying for market share against incumbents like the New York Stock Exchange and Nasdaq Inc, which have benefited from elevated trading volumes during the coronavirus pandemic.
Silicon Valley-based Long Term Stock Exchange (LTSE) goes live on Aug. 28, starting with two stocks and then ramping up to include all securities by Sept. 9. The Members Exchange (MEMX), which is backed by a who’s who of Wall Street firms, begins a phased launch on Sept. 4, and MIAX Pearl Equities debuts on Sept. 25.
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Source: reuters.com
ProcureAM to Launch LGBT ETF Oct. 1 in Partnership with LGBTQ Loyalty Holdings
August 19, 2020--Just in time for LGBT History Month, ProcureAM, a wholly owned subsidiary of Procure Holdings, LLC, will launch an Exchange Traded Fund (ETF) in partnership with LGBTQ Loyalty Holdings, Inc. and its wholly owned subsidiary Advancing Equality Preference Inc.
The LGBTQ+ ESG100 ETF will launch on Oct. 1, 2020 and trade on Nasdaq as LGBT. The EFT will track the LGBTQ100 ESG Index (Index Ticker: LGBTQ100), which identifies the top 100 corporations that most align with the LGBTQ community across America. It is the first-ever index to incorporate LGBTQ community survey data into the methodology, generating a benchmark of the nation's highest-performing companies that are most committed to advancing equality. The Index outperformed the market for the first half of the year (Jan. 1-June 30, 2020), exceeding the S&P 500 Index benchmark by 3.41%.
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Source: lgbtqloyalty.com
Stock Exchanges Dealt Blow as SEC Curbs Power to Raise Some Fees
August 19, 2020--The New York Stock Exchange, Nasdaq and their peers will have to seek public comment and get U.S. Securities and Exchange Commission approval to change how much they charge for widely-used, basic price data under rules adopted Wednesday.
The move to finalize a measure proposed in October continues an SEC effort to rein in exchanges' ability to raise fees by rescinding an exemption the companies had used for years to make adjustments collectively without approval through so-called national market system plans.
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Source: bnnbloomberg.ca
Corporate Sustainability Reporting Is Growing Up
August 19, 2020--Larry Fink's now-famous letter seems to have made a difference.
Sustainability reporting is quickly going mainstream. While companies aren't always required by regulators to report their greenhouse gas emissions, human rights records and wastewater management, investors are pushing them for this information at a faster clip.
Part of the issue is that global investors are under pressure from governments and asset owners themselves to report their impact on people and the planet. Sustainability information companies provided up until now has rarely been comparable, timely or consistent year-to-year.
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Source: bloomberg.com
Fed policymakers zero in on strategy tweaks, minutes show
April 19, 2020--Federal Reserve policymakers are considering tweaks to monetary policy that could result in the U.S. central bank sticking with aggressive stimulus measures far longer than under its previous rubric, minutes from their last policy meeting showed.
The readout of the Fed's July 28-The economic downturn triggered by the coronavirus pandemic faced a highly uncertain path. For instance, they judged that the swift rebound in employment seen in May and June had likely slowed and that additional "substantial improvement" in the labor market would hinge on a "broad and sustained" reopening of business activity.
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Sources: reuters.com
Anfield Capital launches dynamic active fixed income ETF
August 19, 2020--Anfield Capital has launched a new actively managed fixed income ETF designed to serve as a core holding in investors’ portfolios.
The Anfield Dynamic Fixed Income ETF (ADFI US) has listed on Cboe BZX Exchange and comes with an expense ratio of 1.30%.
The ETF takes a dynamic investing approach and typically utilizes between 10 and 20 unaffiliated ETFs to gain its exposure.
The strategy covers all major sectors of the global debt markets including government and agency securities, corporate bonds, private debt, convertible securities, bank loans, asset-backed securities, mortgage-backed securities, and cash equivalent instruments.
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Source: etfstrategy.com
SEC puts US Oil Fund on notice over investor disclosures
August 19, 2020--The world's largest fund investing in oil futures is in the US securities regulator's crosshairs over disclosures to investors during a period of mayhem in crude markets this spring.
The manager of the $4bn United States Oil Fund (USO) disclosed on Wednesday that it had received a Wells notice from the US Securities and Exchange Commission related to constraints on its ability to hold certain futures contracts in late April and May.
Such notices warn recipients that regulatory staff intend to recommend commissioners authorise a civil action, though charges do not necessarily follow.
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Source: technocodex.com
