Capitalogix

The Aftermath of the UK Leaving the EU

Last week, the United Kingdom voted to leave the European Union.  

Immediately, the British Pound tanked, and David Cameron resigned.

The drop was so bad that France overtook Britain as the 5th Largest economy.

Here is a chart from the morning after the vote.

 

via TradingEconomics.

In the aftermath, the S&P downgraded U.K. ... It will be interesting to see the long-term effects.

Will the pound bounce back? Will the British economy recover? 

 

 

 

What are your thoughts?

Here Are Some Links for Your Weekend Reading

I look forward to "Orange is the new Black" ... But Trump getting elected isn't what I mean.

  

  

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• Why Julian Assange Doesn’t Want Hillary Clinton to Be President. (Observer)
• Mark Zuckerberg: 'Entrepreneurship is about Creating Change, Not Just Creating Companies'. (Entrepreneur)
• Statistics is Dead – Long Live Data Science…. (DataScienceCentral)
• Elon Musk Tells You His Plan for Mars. (FoxBusiness)
• How ISIS Became the World’s Deadliest Tech Start-Up. (VanityFair)

 

Trading Links:

 

• Google Searches Suggest Many in UK Don't Understand Brexit. (Gizmodo)
• This Fascinating Map Shows How OPEC's Oil Flows around the World. (BizInsider)
• How Much More Does the Top 1% Make, by US County. (ValueWalk)
• Ag Traders Time to Shine? (Managed Futures)
• Why Uber Keeps Raising Billions. (New York Times)

Here Are Some Links for Your Weekend Reading

While conspiracy theorists argue whether the NBA rigged the finals to get to get to game 7, I find this more disturbing ... it's a photo combining Hillary and Trump into a Clump.

 

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• 12 Neglected Questions Successful Leaders Keep Asking. (LeadershipFreak)
• The 5 Books Bill Gates Wants You to Read this Summer. (Inc)
• Netflix Launches Fast.com, a Dead Simple Way to Test Your Internet Speed. (Mashable)
• Your Life in Weeks. (WaitButWhy)
• The 8 Most Elite Special Forces in the World. (BusinessInsider)

 

Trading Links:

• Buffett Becomes Apple’s 56th Largest Shareholder with $1 Billion Investment. (BuzzFeed)
• Apple's Latest Billion-dollar Business: Venture Capital? (Mashable)
• 22 U.S. Companies that Just Keep Getting More Profitable. (MarketWatch)
• What Current Trends Tell Us about the Future of the Hedge Fund Industry. (QuantNews)
• JPMorgan Has New Theory about What Really Caused the Flash Rally. (Bloomberg)

The Future of FinTech

FinTech is hot ... and FinTech startups are disrupting the value chain, and the industry itself, by grabbing market share, increasing customer churn, and putting pressure on margins.

I recently was at the Future of Finance conference, where I talked with the CEO of CB Insights about the changing landscape of trading and asset management.

 

 

 

via YouTube. 

At the conference, one of the sessions was about how banks are "suffering death by a thousand cuts" and being relegated to utilities as they fail to adapt to new tech trends.  Here is a graphic showing the competitive pressures FinTechs are putting on banks.

 

via CBInsights.

Likewise, according to a report by PwC released last week, 9-out-of-10 insurers fear losing meaningful business to stand-alone FinTechs.

The game is changing, and so is what you have to do in order to win.

 

Related articles

PwC: Global Alternative Asset Industry Heading Towards Center Stage

PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

2/3 Of Global Stocks Are Down Since Last Year

Statistics can be misleading.  For example, if markets are near the highs, they must be strong; right?

Gavekal Research recently put out a note that caught my eye.

Since 5/21/2015 (the date that the MSCI World Index made a high), 2 out of 3 mid-large cap stocks have declined.

The histogram below shows the number of companies in Gavekal's version of the MSCI All-Country World Index that have had positive performance (green) or negative performance (red) since 5/21/2015.  

 

 via Gavekal.

Overall, 66% of stocks have declined over the past year -- while just 34% have posted unchanged or positive performance. 

Interesting, but does that show opportunity or hidden weakness?

 

Related Articles

A Closer Look: World Markets

Don't worry about bad breadth

Stock Market Breadth: Weakness Extends to the Large Caps

Here Are Some Links for Your Weekend Reading

A friend of mine just bet me that Trump would win the election.  So far, Trump has offended a lot of "interest groups" with campaign remarks.  But, then there is Hillary.  It is going to be close.

 

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• 17 Surprising Interview Questions these CEOs Always Ask. (Inc)
• Should We Be Afraid of AI? (Aeon)
• Don't Read This! (It's Only the Most Valuable Psychology Hack You Can Learn.). (Entrepreneur)
• Liberal Brains are Different from Conservative Brains, with Psychiatrist Gail Saltz. (BigThink)
• Jerry Jones Disinterested in Presidential Run, but “Proud” to See Hillary Clinton Earn Democratic Nomination. (Star-Telegram)

 

Trading Links:

• Delinquency Rates Surge in 2016, Poised to Head Higher. (FinancialSense)
• 4 Blockchain Companies that Could Change Everything from Accounting to Money Transfers. (MarketWatch)
• In the U.S. and Abroad, More Young Adults are Living with Their Parents. (PewResearch)
• Top 100 Economics Blogs of 2016. (Ritholtz)
• How Much Did the Clintons Make from Paid Speeches in 2015? (CNW)

Each State's Biggest Export Trading Partner

Despite Canada's considerable geographic challenges, a friend sent me this as a reminder.

This chart shows the country to which each state exports the most.  The states that border Mexico send a lot of goods there, while 35 states have Canada as their biggest export partner.

 

via Business Insider.

 

Back to the chart ... International trade is a big part of America's economy, and a factor in each of the fifty state economies that constitute it.

The Census Bureau publishes annual figures on each state's international trade. In addition to the top 25 goods imported and exported by each state, the Bureau reports the 25 countries each state imports the most from and exports the most to.

In addition, here is a list of the U.S.'s largest trading partners (including a different list showing countries of which U.S. is the largest trading partner).

Finally, here is a link to a map showing U.S. states renamed for countries with similar GDPs.

 

S&P Pit: Futures Trading Then and Now

I recently had the opportunity to visit the S&P 500 Pit after speaking at the Trading Show in Chicago. 

Compare it to the pit only 8 years ago and you'll notice an interesting change ... but it's not necessarily as it seems.

 

 

via YouTube.

Don't let the slow pace and lack of frenzy fool you ... Volume now is higher than ever.  And the change in the pit isn't a harbinger of death for futures trading;  it's the signal of a new era. 

According to the CME Group, public outcry has fallen to 1% of total volume.

As the playing field changes, so does the game.

Onwards!

Here Are Some Links for Your Weekend Reading

Just a saw an interesting Elon Musk quote:  "Boil things down to the most fundamental truths, and reason up from there."

 

 

 

Here are some of the posts that caught my eye. Hope you find something interesting.

 

Lighter Links:

• How to Build a Culture of Originality. (Harvard Business Review)
• 9 Influential Speeches that Changed the World. (BusinessInsider)
• Jet App Allows You to Share Flights with Celebrities. (CNBC)
• Questions, Answers on New Rules for Americans Visiting Cuba. (AP News)
• One of the World's Top Aging Researchers Has a Pill to Keep You Feeling Young. (FastCo)

 

Trading Links:

• Fintech’s Tipping Point is Imminent, New Report Says. (CoinTelegraph)
• BANK of AMERICA: Long Robots, Short Humans. (BusinessInsider)
• The Uberization of Banking. (Wall Street Journal)
• A 40-Person Startup Just Bought a 1,100-Person Company, Because 2016. (Mashable)
• For Stan Druckenmiller this is "The Endgame" - His Full 'Apocalyptic' Presentation. (ZeroHedge)

Borsellino: futures trading then and now

I just got back from chairing and speaking at a Quant/Algo Trading Conference in Chicago.  Very interesting!

While there, I met with Lewis Borsellino, a well-known S&P 500 and Eurodollar futures trader and author.

Here is a picture of him in the Pit, back in the day.

 

via TastyTrade.

In the mid-eighties, Borsellino claims to have been responsible for 10 percent of a day's volume in the S&P 500 pit and to have accumulated more fines for physical incidents than any other floor member at the CME.

We talked about how many of the advantages he had by being a big player in the trading pits are now being realized by algorithmic and high-speed traders.  I smiled when he called himself the "original spoofer."  

Here is a picture of him now.

 

Change is the only constant.

It's funny how despite the pace of  change, so much stays the same.

The playing field may change, but you still have to play the game.

Related articles

The CME will close most of its open outcry trading pits by this summer

Wall Street sounds off as the Chicago trading pits go quiet for the first time in 167 years