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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.
view the CFTC.gov Commitments of Traders Update Fed's credit operation launched, but job already done view more Fed Buys $305 Million of ETFs at Launch of Historic Program view more Asset managers call for clearer definition of ETFs view more Goldman Sachs to buy boutique wealth management custodian Folio view more
Source: federalreserve.gov
May 15, 2020--The current reports for the week of May 12, 2020 are now available.
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Source: CFTC.gov
May 14, 2020--The Federal Reserve's pledged support for exchange-traded funds may not end up costing the central bank much, but will still have the desired effect of keeping the credit market afloat.
As part of an unprecedented stimulus endeavor, the Fed announced it would support the ETF market in March, and on Tuesday launched the backstop. In the first two days of its operation, the facility purchased $305 million worth of corporate bonds, according to Fed data released Thursday.
Source: reuters.com
May 14, 2020--The Federal Reserve bought $305 million of exchange-traded funds on the first day of its historic intervention into U.S. corporate debt markets, according to data published Thursday.
The figures were revealed in the central bank's weekly balance sheet update, which also showed that total assets rose to a new record of $6.93 trillion in the week through May 13. The ETF purchases, which began on Tuesday, are part of the latest emergency lending program the Fed has rolled out to help cushion the impact of the coronavirus pandemic on the U.S. economy and financial markets.
Source: Bloomberg
May 14, 2020--BlackRock, State Street and Invesco among those seeking strict definition of what can be called an exchange-traded fund
BlackRock Inc., State Street Global Advisors and some other large money managers are asking exchanges to enforce a more narrow definition of exchange-traded funds.
These firms want a new naming system reflected in exchange data feeds that go out to traders and investors. A proposal, shared with exchanges this week, would shut out leveraged and inverse funds that seek to amplify returns or losses from the definition of an ETF. It would also distinguish ETFs from debt notes and some funds that rely on leverage and commodity...
Source: wsj.com
May 14, 2020--Goldman Sachs Group Inc plans to buy a boutique wealth management custodian and technology company called Folio Financial Inc for an undisclosed amount of money, according to a letter that Folio sent to its customers on Thursday and was viewed by Reuters.
Folio would be the second wealth management company Goldman has acquired in two years, following United Capital in 2019, and it fulfills Chief Executive David Solomon's goals to build out the bank's other businesses.
Source: reuters.com
