• Charles Schwab-TD Ameritrade deal would be the latest in a long series of broker mergers
    Yahoo Finance

    Charles Schwab-TD Ameritrade deal would be the latest in a long series of broker mergers

    Two giants in the retail brokerage industry are reportedly set to merge into one behemoth, triggering further industry consolidation amid the race to $0 trading fees.

  • Charles Schwab Takes Charge in Brave New Zero-Fee World
    Bloomberg

    Charles Schwab Takes Charge in Brave New Zero-Fee World

    (Bloomberg Opinion) -- You have to hand it to Charles Schwab Corp. As the market leader in the online brokerage industry, the company seems to have realized the inevitable endgame of zero fees and consolidation and decided that it really ought to get on with it.Schwab, just seven weeks after rocking Wall Street by announcing plans to eliminate commissions for U.S. stocks, exchange-traded funds and options, is now set to buy rival TD Ameritrade Holding Corp. for $26 billion, according to reports Thursday. The combined company would have an impressive $5 trillion of assets and be better equipped to step forward into this new, no-fee world than competitors such as E*Trade Financial Corp. and Interactive Brokers Group Inc. The concept of a first-mover advantage usually applies to marketing, but it’s a relevant way to think about Schwab’s strategy, too. By staying ahead of the competition, Schwab is reshaping the discount brokerage space on its terms rather than waiting to react to any changes. Bloomberg News’s Annie Massa smartly broke down the various brokerage companies’ commissions as a percentage of net revenue in 2018, which makes it obvious why Schwab chose to take the plunge toward zero fees: It stands to reason that Schwab’s calculus went something like this:Yes, our stock price will take a big hit when we announce that we’re eliminating commissions (it did, dropping to the lowest since 2016 last month). But the short-term pain will be worth it because our rivals will have no choice but to follow suit (as they did within days). Because they depend on fees much more than we do, investors should sell our competitors’ shares to a greater extent (this happened, too).  That will put us in a position to more cheaply execute the next phase of our plan, which is to grow. (It’s possible Schwab already had this deal in mind after TD Ameritrade announced in July that Chief Executive Officer Tim Hockey would leave by the end of February 2020.)Investors expressed approval of Schwab’s decision, lifting its shares as much as 13.9% on Thursday to the highest in more than a year. It’s not as if purchasing TD Ameritrade will solve all that ails the company and the online brokerage industry. But, like the consolidation in the mutual-fund space, it ensures survival. And in an era of rapid technological change on Wall Street, living to see another day and having the size and scope to keep pace with advancements is critically important. What’s next for Schwab? My Bloomberg Opinion colleague Nir Kaissar posited last month that the only option seems to be a more urgent push into financial advisory services. That will most likely be more of a grind for the company compared with the big splashes of the past two months. Schwab is competing with other market stalwarts like Fidelity Investments and Vanguard Group Inc., which are more difficult to push around than its discount broker rivals.Still, even if this is the last big move for now from Schwab, it has been a whirlwind couple of months. In two sweeping moves, the company has radically reshaped an industry and positioned itself to remain the market leader for the foreseeable future.To contact the author of this story: Brian Chappatta at bchappatta1@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Chicago Trading Titan Don Wilson Says Libor’s Obituaries Are Premature
    Bloomberg

    Chicago Trading Titan Don Wilson Says Libor’s Obituaries Are Premature

    (Bloomberg) -- Chicago trading legend Don Wilson suspects the scandal-tainted Libor interest-rate benchmark is going to stick around past its 2021 expiration date, defying the expectations of the Federal Reserve and other regulators.In two years, banks will no longer be required to supply data used to calculate the London Interbank Offered Rate. But that doesn’t mean they’ll stop, Wilson, the chief executive officer and founder of futures-and-options giant DRW Holdings LLC, said in an interview Monday at his office.Assuming Wilson’s right and banks do keep feeding Libor, that means there’s a future, too, for eurodollars. Those contracts at CME Group Inc.’s exchange are futures on three-month U.S. dollar Libor, and they can’t exist in their current form without it. They’re also the most-traded rates contracts in the world and a staple of Wilson’s firm from the start, making this more than just an ivory-tower discussion about rates benchmarks.Traders are gradually embracing products based on the Federal Reserve Bank of New York’s Libor replacement, the Secured Overnight Financing Rate. But while SOFR has its place, Libor administrator Intercontinental Exchange Inc. has addressed the benchmark’s problems, and doing away with it would be a mistake, Wilson said. His view is informed in part by SOFR’s volatility during September’s upheaval in U.S. funding markets.“SOFR is a useful risk-management tool, but SOFR is not a good replacement for Libor,” Wilson said. “Why do we want to start this kind of forced march towards the death of Libor when there are clearly some problems?”He’s not the only one who thinks Libor will live on. “Whether Libor is going to be dead or not in a couple of years is yet to be seen,” CME CEO Terry Duffy said in an October interview. Accenture Plc released a survey in September revealing almost a quarter of global financial firms and corporate users expect Libor’s phase-out to be delayed.Few voices are more prominent than Wilson’s on the subject of rates derivatives and their benchmarks. DRW is one of the biggest high-frequency traders in the world, and it’s a large player in eurodollar contracts, a primary way investors around the globe bet on or hedge against moves in interest rates.The 51-year-old’s roots with those products are deep. He started working in the Chicago Mercantile Exchange’s eurodollar trading pits in 1989. From there, he grew DRW into a company with more than 1,000 employees that’s not only a huge market-maker in futures, options and other conventional financial products, but also a major presence in cryptocurrencies as well as a real-estate and venture-capital investor.SOFR, “a wonderful tool if you’re hedging repo exposure,” can’t easily fill Libor’s shoes, Wilson said. As a secured rate -- because the loans it references are collateralized -- it lacks the credit component of Libor, which involves unsecured transactions. There’s no term structure for SOFR, or maturities beyond overnight. And it’s “affected by exogenous factors in a big way,” Wilson said. That vulnerability was exposed by the mid-September chaos in the U.S. market for repurchase agreements.“We saw in September the repo market basically break, resulting in SOFR trading at a 300-basis-point premium for one night,” Wilson said. Borrowers who saw their interest expense spike because of such a jump would have good reason to be annoyed, he argued. “I just don’t think that that’s a great characteristic for our new benchmark rate to have.”U.S. regulators are clear on where they stand. They want Libor -- which banks were caught manipulating -- gone and for SOFR to take its place. New York Fed President John Williams is fond of counting down to the end of Libor. Speaking on Tuesday, he said the clock stood at roughly 775 days and “only goes one direction.”Officials globally are working on similar transitions, and while details are still being worked out, “the one thing we do know is there’s some point in the future when Libor -- which doesn’t meet standards of a strong, robust reference rate -- won’t be around any more,” Williams said.CME last week proposed plans for what it will do in the event that Libor becomes unavailable to settle eurodollar futures. Basically, it will convert them into SOFR futures, which began trading in May 2018.“If I were running CME, I don’t think I would do anything different,” Wilson said. Volume and open interest for these SOFR products have mounted quickly, but remain dwarfed by eurodollar futures.Williams dismissed criticism of SOFR in his appearance Tuesday. He said that while any transactions-based rate is vulnerable to spikes, SOFR on a three-month average basis “hasn’t been volatile at all.” The New York Fed’s plan to produce SOFR averages and an index by mid-2020 should address concerns, he said.There’s a sense in which killing Libor now seems like a waste, Wilson said. ICE Benchmark Administration, which took over running the rate in 2014, “has put additional things in place to make the Libor reporting more robust,” he said. “Is the benefit of killing Libor -- i.e. moving away from something that is a little bit less tangible to something else -- really worth the risk?”Either way, DRW is already preparing for December 2021. It’s trading CME’s SOFR contracts.To contact the reporters on this story: Elizabeth Stanton in New York at estanton@bloomberg.net;Nick Baker in Chicago at nbaker7@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark Tannenbaum, Dave LiedtkaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Investing.com

    Oil Jumps 3% as Bulls Rejoice Over Smaller Crude Build

    Investing.com – Volatility was back forcefully in oil Wednesday with the market jumping nearly 3% to recoup almost all it lost in the previous session.

  • Zacks.com featured highlights include: Medtronic Public, Arconic, Nasdaq, Hewlett Packard and Target
    Zacks

    Zacks.com featured highlights include: Medtronic Public, Arconic, Nasdaq, Hewlett Packard and Target

    Zacks.com featured highlights include: Medtronic Public, Arconic, Nasdaq, Hewlett Packard and Target

  • Will Rise in New Accounts Aid Online Brokers Earn More Fees?
    Zacks

    Will Rise in New Accounts Aid Online Brokers Earn More Fees?

    Online brokers record a rise in new account opening in October. While this means that their strategy to attract more investors is working, it's wait and watch as to how they gain financially.

  • Investing.com

    Oil Slides as China Concern On Impeachment Adds Another Twist To Trade Deal

    Investing.com - It was a matter of time and the Chinese have finally said it. They have concerns over the impeachment proceedings of President Donald Trump. Oil prices slid Monday on that news, leveling some of Friday’s pop that came on the hype that the two sides were close to a deal.

  • GL vs. VIRT: Which Stock Should Value Investors Buy Now?
    Zacks

    GL vs. VIRT: Which Stock Should Value Investors Buy Now?

    GL vs. VIRT: Which Stock Is the Better Value Option?

  • 5 Stocks Trading Near 52-Week High With More Room to Run
    Zacks

    5 Stocks Trading Near 52-Week High With More Room to Run

    Investors target stocks that have been on a bullish run lately. Stocks seeing price strength have a high chance of carrying the momentum forward.

  • Reuters - UK Focus

    UPDATE 4-Euronext, SIX Group square up for battle for Madrid bourse

    PARIS/ZURICH, Nov 18 (Reuters) - Pan-European stock market operator Euronext and Switzerland's SIX sparked a bidding war for Spain’s Bolsas y Mercados Espanoles (BME) on Monday, with both trying to snap up one of Europe’s last standalone stock exchanges. SIX made a friendly all-cash offer for the Spanish bourse, whose shares jumped by more than a third in early trading, while Euronext said it was in talks with BME with a view to a potential bid, without saying how much it was prepared to pay. With European sector leaders Deutsche Boerse and London Stock Exchange (LSE) effectively too big to consolidate without raising serious competition concerns, mergers are focused on smaller players, with Euronext having already scooped up the Dublin and Oslo exchanges.

  • Charles Schwab (SCHW) Records Increase in October Metrics
    Zacks

    Charles Schwab (SCHW) Records Increase in October Metrics

    Charles Schwab's (SCHW) client assets in October 2019 increase year over year as well as from the prior month.

  • Baidu, Live Nation Entertainment, CME, MarketAxess and Nasdaq highlighted as Zacks Bull and Bear of the Day
    Zacks

    Baidu, Live Nation Entertainment, CME, MarketAxess and Nasdaq highlighted as Zacks Bull and Bear of the Day

    Baidu, Live Nation Entertainment, CME, MarketAxess and Nasdaq highlighted as Zacks Bull and Bear of the Day

  • CME Group (CME) to Launch Bitcoin Options in Early 2020
    Zacks

    CME Group (CME) to Launch Bitcoin Options in Early 2020

    CME Group (CME) unveils options on Bitcoin Futures to help clients in hedging bitcoin price risk.

  • 10 Best Performing Stocks of S&P 500 ETF
    Zacks

    10 Best Performing Stocks of S&P 500 ETF

    In the recent series of record highs, the S&P 500 crossed the 3,100 level for the first time ever. We have highlighted 10 best performing stocks in ETF that tracks this index.

  • New Strong Sell Stocks for November 14th
    Zacks

    New Strong Sell Stocks for November 14th

    Here are 5 stocks added to the Zacks Rank 5 (Strong Sell) List today

  • Bloomberg

    CME Plans to Start Brazilian Soybean Futures With B3 Exchange

    (Bloomberg) -- CME Group Inc. plans to start Brazilian soybean futures with the country’s B3 exchange, giving traders a new hedging tool as the U.S.-China trade war disrupts the global flow of beans, people familiar with the matter said.The contract for soybeans loaded at the port of Santos, Brazil’s biggest, would be cash-settled, according to the people, who asked not to be identified because the plan hasn’t been announced. Futures will be based on assessments by a price-reporting agency, most likely S&P Global Platts, the people said.Brazil has become a powerhouse in soybeans and overtook the U.S. as the top exporter in the 2012-13 season. Its dominance grew in the past year as the U.S.-China trade spat prompted Chinese buyers to turn to Brazilian supplies. Price dislocations have also boosted the need for new hedging tools as benchmark futures traded in Chicago are for beans delivered in the U.S.Both B3 and CME declined to comment.CME, which also owns benchmark futures for corn and wheat, had previously confirmed it was considering starting a Brazilian soybean contract. In May, Chief Executive Officer Terry Duffy said the bourse was working on developing risk-management tools for the Brazilian market and that he wanted to ensure changes in trade flows didn’t skew prices.The soybean contract would extend CME’s suite of cash-settled products, which also include Black Sea wheat, corn and Ukrainian sunflower oil. Cash-settled contracts are gaining popularity as agriculture follows the path of energy markets, where thousands of contracts are already based on assessments from price-reporting agencies.\--With assistance from Fabiana Batista and James Attwood.To contact the reporters on this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net;Megan Durisin in London at mdurisin1@bloomberg.netTo contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Nicholas Larkin, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • E*TRADE (ETFC) Reports 9% Sequential Growth in October DARTs
    Zacks

    E*TRADE (ETFC) Reports 9% Sequential Growth in October DARTs

    Rise in Daily Average Revenue Trades is likely to support E*TRADE's (ETFC) financials going forward.

  • LPL Financial (LPLA) October Brokerage & Advisory Assets Up
    Zacks

    LPL Financial (LPLA) October Brokerage & Advisory Assets Up

    Steadily rising brokerage and advisory assets will support LPL Financial's (LPLA) top-line growth in the quarters ahead.

  • Libor’s Demise Will Upend How Hugely Popular Derivatives Work
    Bloomberg

    Libor’s Demise Will Upend How Hugely Popular Derivatives Work

    (Bloomberg) -- CME Group Inc. shed light on what could happen to the exchange giant’s most-traded contracts -- eurodollars, which permit bets on interest rates -- if the scandal-plagued Libor benchmark they’re tied to goes away in two years.Officials at CME on Tuesday proposed a methodology for converting eurodollar futures and options to other derivatives at the exchange, ones linked to an alternative benchmark called the Secured Overnight Financing Rate, or SOFR. The plan could be tweaked based on customer feedback.The U.K. regulator that oversees Libor, the Financial Conduct Authority, will stop compelling banks to submit data used to calculate Libor in 2021. CME Chief Executive Officer Terry Duffy said in an October interview that the benchmark isn’t guaranteed to go away then. But Libor is so deeply embedded in the global financial system that even a slim chance it disappears means contingency planning is necessary.CME officials Sunil Cutinho and Agha Mirza said on a Tuesday webinar what would happen if there’s a “fallback trigger,” meaning the FCA or ICE Benchmark Administration, the company that maintains Libor, says the index won’t be provided anymore. In that case, eurodollar futures would be turned into SOFR futures, converted to the same month’s expiration at a price determined by the pre-fallback eurodollar price plus a spread adjustment.Eurodollar options would continue to be listed because converting them “would result in non-standard strike prices different to the standard listed strike prices” for SOFR options, Cutinho said. However, upon exercise, the resulting “synthetic” eurodollar futures contract would convert immediately into a corresponding SOFR futures contract.“Without a fallback trigger, the eurodollar complex will remain unchanged,” Mirza said. “Eurodollar futures and options remain deeply liquid and continue to grow year after year.”The stakes are high for CME, given that eurodollar futures are the most-traded interest-rate derivatives tracked by the Futures Industry Association. Almost 380 million of them changed hands during the first half of the year, according to the trade group. Libor is currently used to settle $67 trillion in listed products including eurodollar futures and options, Cutinho said.CME plans to offer customers support in converting their eurodollar options to SOFR options, which are slated to debut on Jan. 6, Cutinho and Mirza said. Also, in the event of a fallback trigger, CME would immediately create new contracts to fill in any gaps where there are eurodollar expirations but not corresponding ones for SOFR.CME’s proposed methodology aligns with the International Swaps and Derivatives Association’s proposed methodology for settling swaps in the event that Libor production ceases, exchange officials said.To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.netTo contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Nick Baker, Mark TannenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Intercontinental (ICE) to Launch Futures Exchange in Abu Dhabi
    Zacks

    Intercontinental (ICE) to Launch Futures Exchange in Abu Dhabi

    Intercontinental Exchange's (ICE) futures exchange to enable trading in Murban crude-oil future contracts.

  • MarketAxess (MKTX) Up 70% This Year: Is Further Upside Left?
    Zacks

    MarketAxess (MKTX) Up 70% This Year: Is Further Upside Left?

    MarketAxess (MKTX) is driven by growth in business and market share and strong capital position.

  • Reuters - UK Focus

    UPDATE 3-UAE oil benchmark plan confused by Brent comment U-turn

    A United Arab Emirates plan to launch its own global oil benchmark was thrown into confusion on Tuesday after comments made by its own national oil company. ADNOC first said it sees Murban as a contract to replace the global Brent benchmark, only to retract the comment.

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