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CBO-Monthly Budget Review for April 2020
May 8, 2020--The federal budget typically records a surplus in April because final tax payments for the prior year and estimated payments for the current year are usually due on April 15. But this year, the government incurred a deficit of $737 billion in April, CBO estimates, compared with a surplus of $160 billion last year.
That substantial difference stems from the economic disruption caused by the novel coronavirus pandemic and from the federal government's response to it, including actions by the Administration and enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA).
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Source: CBO (Congressional Budget Office)
Water Island Capital Launches AltShares Merger Arbitrage ETF
May 7, 2020--Water Island Capital is pleased to announce the launch of AltShares Merger Arbitrage ETF (NYSE:ARB), the first ETF offered in AltShares Trust. ARB seeks to provide passive exposure to the Water Island Merger Arbitrage USD Hedged Index (WIMARBH).
The ETF aims to profit from the successful completion of definitive, publicly announced mergers and acquisitions.
The Water Island Merger Arbitrage USD Hedged Index employs a proprietary rules-based framework that was derived using research from Water Island Capital over its 20-year investment history. The index, and by extension ARB, offer exposure to select definitive, publicly announced mergers and acquisitions across developed markets globally. The deals that are selected for inclusion in the index and the ETF are weighted according to a risk-constrained, liquidity-based methodology and are rebalanced twice per month.
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Source: Water Island Capital, LLC
CFTC.gov Swaps Report Update
May 6, 2020--CFTC's Weekly Swaps Report has been updated, and is now available.
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Source: CFTC.gov
Exchanges Told to Give Brokers More Say in How Stock Data Are Distributed
May 6, 2020--SEC order follows complaints that exchanges favor clients who pay more for extra speed, data
The SEC ordered the nation's stock exchanges Wednesday to give stockbrokers and investors greater input into how real-time stock prices are distributed.
The Securities and Exchange Commission issued the directive after hearing for years that the New York Stock Exchange and other market centers have too much control over the packaging and pricing of information about trades and share prices.
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Source: wsj.com
New Listing Rules Adopted for ETFs Relying on Rule 6c-11-Exchanges' ETF Listing Compliance Burdens Reduced
May 5, 2020--As the December 23, 2020 compliance date for the Securities and Exchange Commission (SEC) approved rule 6c-11 under the Investment Company Act of 1940, as amended (ETF Rule) approaches, the vast majority of exchange-traded funds (ETFs) are preparing to launch and operate without first obtaining an exemptive order from the SEC.
In approving the ETF Rule, the SEC intended to "create a consistent, transparent, and efficient regulatory framework for the regulation of most ETFs and help level the playing field for [ETF] market participants." As part of a desire to also streamline and reduce the continued listing standards for ETFs, each of the major U.S. stock exchanges and markets-CBOE BZX Exchange, Inc. (CBOE), The Nasdaq Stock Market LLC (Nasdaq), and NYSE Arca, Inc. (NYSE Arca) (collectively, the Exchanges)-proposed new generic listing standards to permit the listing of shares of ETFs that operate in reliance on the ETF Rule (relying ETFs).
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Source: K&L Gates
Indxx launches US 'Fallen Knives' Index
May 5, 2020--New York-headquartered Indxx has launched a new US equity index that follows a mean reversion strategy.
Mean-reversion assumes that there is an underlying stable trend in the price of an asset and prices fluctuate randomly around this trend.
Values deviating far from the trend will tend to reverse direction and revert to the trend.
With reference to the newly unveiled Indxx US Fallen Knives Index, the strategy tracks companies with recent short-term negative returns that are expected to rebound based on momentum and financial health indicators.
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Source: etfstrategy.com
U.S. Treasury blasts records with $3 trillion borrowing need this quarter
May 4, 2020--The U.S. Treasury Department on Monday said it plans to borrow nearly $3 trillion in the second quarter of 2020 -more than five times larger than the previous record-as the federal government spends at a frantic pace to mitigate the impact of the coronavirus on the U.S. economy.
n a statement, Treasury said it would borrow $2.999 trillion during the April-June quarter-higher also than the previous record borrowing for a full fiscal year of $1.8 trillion in 2009.
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Source: Reuters
New York Fed Says It Will Begin Buying ETFs in 'Early May'
May 4, 2020--Corporate debt purchases to begin 'soon thereafter,' Fed says
Fed puts limits on eligible ETF purchases to avoid overpaying
The Federal Reserve is close to standing up two corporate lending programs that could buy up to $750 billion in debt and exchange-traded funds under its emergency coronavirus actions.
The New York Fed announced on its website Monday that it expects to begin purchasing shares of eligible ETFs in early May through its Secondary Market Corporate Credit Facility.
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Source: bloomberg.com
Wall Street Week Ahead: U.S. data deluge to underscore divide between roaring market, plunging economy
May 8, 2020--A week packed with U.S. economic data is likely to provide investors with more evidence of the extent to which the coronavirus pandemic has hit growth, sharpening the debate on whether a rebound in stocks has been justified amid an unprecedented slowdown.
The raft of data will include reports on retail sales, industrial production and inflation from April, a month in which large parts of the country were under lockdown as officials mandated stay-at-home policies due to the spreading coronavirus.
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Source: reuters.com
Treasury's $4 Trillion Funding Task Signals Record Auction Slate
May 3, 2020--Treasury Secretary Steven Mnuchin is likely to boost the government's quarterly round of debt auctions to unprecedented levels this week to finance a deficit that's set to surpass estimates of $4 trillion for this year as lawmakers discuss additional economic stimulus.
Treasury's announcement Wednesday on its issuance plans for the coming months will signal how Mnuchin plans to manage a debt burden that's poised to eclipse the record seen in the wake of World War II as a share of the economy.
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Source: bnnbloomberg.ca
