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IMF Working Paper-Foreign Demand and Local House Prices: Evidence from the US
February 28, 2020--Summary:
We test whether foreign demand matters for local house prices in the US using an identification strategy based on the existence of "home bias abroad" in international real estate markets. Following an extreme political crisis event abroad, a proxy for a strong and exogenous shift in foreign demand, we show that house prices rise disproportionately more in neighbourhoods with a high concentration of population originating from the crisis country.
This effect is strong, persistent, and robust to the exclusion of major cities. We also show that areas that were already expensive in the late 1990s have experienced the strongest foreign demand shocks and the biggest drop in affordability between 2000 and 2017. Our findings suggest a non-trivial causal effect of foreign demand shocks on local house prices over the last 20 years, especially in neighbourhoods that were already rather unaffordable for the median household.
view the IMF Working Paper-Foreign Demand and Local House Prices: Evidence from the US
Source: IMF
Volatility index hits highest level since 2015
February 27, 2020--Wall Street's 'fear gauge' is eyeing its biggest weekly rise since the 2008 crisis
The Cboe volatility index-known as Wall Street's "fear gauge"-jumped to its highest level since August 2015, reflecting the heightened volatility in US stocks at a time of growing concerns over the coronavirus outbreak.
After a tumultuous run for the market, the Vix is staring down its second-biggest weekly rise on record, having gained 22.1 percentage points since Friday’s close. The biggest weekly rise was 24.8 percentage points for the week ended October 10, 2008, during the depths of the financial crisis.
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Source: FT.com
Franklin Templeton Expands Active ETF Lineup with Three Thematic Funds Focused on Dynamic Innovation
February 27, 2020--Franklin Templeton today announced the expansion of its active ETF lineup with the addition of three thematic ETFs: Franklin Disruptive Commerce ETF (BUYZ), Franklin Genomic Advancements ETF (HELX) and Franklin Intelligent Machines ETF (IQM).
"We are thrilled to bring our first thematic ETFs to market. BUYZ, HELX and IQM are focused on investing in innovative companies within each theme-e-commerce, genomics and intelligent machines," said Patrick O'Connor, global head of ETFs for Franklin Templeton.
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Source: Franklin Templeton
SEC Rejects Latest Bitcoin ETF Bid
February 26, 2020--The U.S. Securities and Exchange Commission (SEC) rejected Wilshire Phoenix's bid for a bitcoin-based exchange-traded fund (ETF).
In a filing posted Wednesday, the securities regulator wrote the New York-based Wilshire Phoenix had not proven the bitcoin (BTC) market is sufficiently resistant to market manipulation.
Wilshire, a newcomer to the financial services industry, first applied for the ETF last summer with NYSE Arca.
"The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission's Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be 'designed to prevent fraudulent and manipulative acts and practices' and 'to protect investors and the public interest,'" the filing said
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Source:coindesk.com
FRBSF Economic Letter-Is the Risk of the Lower Bound Reducing Inflation
February 24, 2020--U.S. inflation has remained below the Fed's 2% goal for over 10 years, averaging about 1.5%. One contributing factor may be the impact from a higher probability of future monetary policy being constrained by the effective lower bound on interest rates.
Model simulations suggest that this higher risk of hitting the lower bound may lead to lower expectations for future inflation, which in turn reduces inflation compensation for investors. The higher risk may also change household and business spending and pricing behavior. Taken together, these effects contribute to weaker inflation.
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Source: Robert Amano, Thomas J. Carter, and Sylvain Leduc-Federal Reserve Bank of San Francisco
More firms throw weight behind new Wall-Street backed stock exchange
February 20, 2020--Goldman Sachs and JPMorgan are joining the list of banks, brokerages and trading firms that back the Members Exchange, or "MEMX"-a new stock exchange that says it will go live in July and challenge incumbent exchanges by charging lower fees.
Why it matters: MEMX, which is still awaiting regulatory approval from the SEC, could be a formidable competitor to the entrenched "big three" stock exchanges.
The big picture: All but one of the nation's stock exchanges (not including dark pools) are controlled by three big players: Intercontinental Exchange (the parent company of NYSE), Nasdaq and Cboe.
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Source: axios.com
Federal Open Market Committee-Minutes of the Federal Open Market Committee January 28-29, 2020
February 19, 2020--A joint meeting of the Federal Open Market Committee and the Board of Governors was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, January 28, 2020, at 10:00 a.m. and continued on Wednesday, January 29, 2020, at 9:00 a.m.1
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Source: federalreserve.gov
Franklin confirms deal for Legg Mason to create $1.5tn group
February 18, 2020--Franklin Resources has confirmed that it is in the process of acquiring rival asset management company Legg Mason, in a deal that would boost its assets under management to $1.5tn.
Under the terms of the deal, Franklin Resources will purchase Legg Mason, which owns nine investment firms in its multi-affiliate model, in an all-cash offer.
Under the terms of the deal, it will also assume approximately $2bn of Legg Mason's outstanding debt.
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Source: citywireselector.com
Local bourse closes firmer after mixed session
February 13, 2020--The US Fed has indicated that it is closely assessing the potential impact to growth that could stem from the epidemic, while in China measures such as reserve requirement cuts have been taken to bump up liquidity in the markets.
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Source: FIN24
BlackRock Climate Vow Pays Off With New ETF’s $600 Million Debut
February 11, 2020--An exchange-traded fund from the New York-based money manager has attracted more than $600 million this week, despite only starting trading on Friday, data compiled by Bloomberg show. That's the best debut for any U.S. ETF this year, and a sign BlackRock isn't the only one that sees climate change as a defining factor in companies' long-term prospects.
Investing in companies that care about environmental, social and governance issues is finally catching on after years of sluggish growth. While only a small drop in the $4.5 trillion U.S. ETF market, sustainable funds added more than $8 billion in 2019 and assets recently topped $20 billion.
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Source: finance.yahoo.com
