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How the laws & regulation affecting blockchain technology can impact its adoption
Business Insider, 1/1/0001 12:00 AM PSTRapid Rise of Cryptocurrencies and Blockchain TechnologyOver the past few years, inventions in the fintech space have been rapidly transforming into innovations thanks to early commercialization, mass acceptance and adoption. Cryptocurrencies have been around for a long time, but they have gained maximum traction and attention in the past decade. After the launch and success of Bitcoin, other cryptocurrencies soon followed, trying to break in the Fintech industry. The rise and success of cryptocurrencies has been such that today, there are more than 1,100 cryptocurrencies currently trading in the financial market. The price of cryptocurrencies ranges between approximately a quarter to thousands of dollars. Although recently, Bitcoin broke an all-time record high and hit a historic mark when its value peaked at a whopping $5,856.10 on October 13, 2017. The $5,000 mark has long been a threshold of high-anticipation in the bitcoin community. The currency, which is up more than 400% this year, is turning heads of businesses, financial institutions and governments all around the world. But it's also raising regulatory concerns and questions. In this article, BI Intelligence, Business Insider’s premium research service, explores the regulations surrounding cryptocurrencies worldwide and their subsequent impact and spread.
Cryptocurrency Regulations Around the WorldAmongst world economies and governments, cryptocurrency has been a topic of continual debate. Many governments feel that allowing cryptocurrency for legal transactions and use would ultimately result in loss of economic power and a shift towards decentralized economies globally. Even though many countries across the world permit cryptocurrencies, they have been under scrutiny and seen with skeptical eyes in many others. Certain countries have gone to the extent of banning the currency, making its use, possession, and trade illegal. BI Intelligence has gone into further depth in identifying and listing the blockchain regulations and associated issues in the U.S., Europe, and the rest of the world. Blockchain Regulations in the U.S.According to The Columbia Science and Technology Law Review, the regulatory responses to emerging technologies, and to blockchain in particular, range from excitement to suspicion to indifference. The law review states that the U.S. federal government has not exercised its constitutional preemptive power to regulate blockchain to the exclusion of states (as it generally does with financial regulation) or even expressed intention to do so, regardless of the interest of federal agencies. And so the states remain free to introduce their own rules and regulations. As an example, although New York did not enact state-wide legislation recognizing blockchain for record-keeping purposes, in June 2015 it became the first state in the U.S. to regulate virtual currency companies through state agency rulemaking. In 2017, at least eight U.S. States have worked on bills accepting or promoting the use of Bitcoin and blockchain technology, while a couple of them have already passed them into law. The most important developments for blockchain’s regulation and implementation in the U.S. in an evidentiary context occurred in Arizona (recognition of smart contracts), Vermont (blockchain as evidence), Chicago (real estate records), and, most importantly, Delaware (pending initiative authorizing registration of shares of Delaware companies in blockchain form). In the U.S., Bitcoin is set to be given the same financial safeguards as traditional assets. The U.S. Commodity Futures Trading Commission has granted LedgerX, a cryptocurrency trading platform operator, approval to become the first federally regulated digital currency options exchange and clearinghouse in the U.S.
Blockchain Regulations in EuropeThe overall approach of the EU towards the blockchain technology is positive and welcoming. The EU appears to be following the path of an innovation-first business philosophy, which could end up supporting development of virtual currencies from two angles: 1) encouraging the exploration of use cases to test impact and laws, and 2) giving entrepreneurs confidence that their "approved" applications will be more trusted by their target markets. This approach, combined with the EU's scope as regulators for a 28-country economic bloc, could not only encourage an ecosystem of thinkers and doers, but could also end up making Europe a prime destination for blockchain development, as businesses choose the continent for their domicile and as talent flocks to the area. Earlier this year, the executive arm of the European Union government revealed that it is working on the blockchain to support distributed ledger-based projects. According to this official press release published on February 7th, the Commission is considering growing its efforts on supporting more projects related to the distributed ledger technology (DLT). The European Commission is “actively monitoring Blockchain and DLT developments” and is working on exploring “DLT benefits and challenges as well as fields for application in financial services”. The official press release also clarified that the Commission wants to “pilot projects to foster decentralized innovation ecosystems and help reshape interactions between consumers, producers, creators and among citizens, businesses and administrations to the end benefit of society.” Switzerland has become one of the main European hubs for cryptocurrency and blockchain development. This has been spearheaded by the Crypto Valley Association, a Swiss non-profit blockchain and cryptographic technology ecosystem, which has started to develop an ICO Code of Conduct in light of China’s recent ban of token crowdsales.
Regulating Blockchain Technology WorldwideBlockchain is the technology of choice for many startups. As per research by Outlier Ventures Research Team in May to June of 2016, 200 new startups were added in six weeks. Businesses and startups popped up around the virtual technology and sprouted with lightning speed. While many countries are supporting the development of the digital currencies, thus encouraging new ways of transacting and new businesses to bud, there are some that have boycotted the new technology, deeming it as an illegal negative disruption that brings financial instability and global economic unrest. According to the Congressional resolution proposed July 14, 2016 in the U.S., “blockchain technology with the appropriate protections has the potential to fundamentally change the manner in which trust and security are established in online transactions through various potential applications in sectors including financial services, payments, health care, energy, property management, and intellectual property management.” The hundreds of pilots and proofs-of-concept currently in motion are but a tip of the iceberg when it comes to potential applications of the blockchain technology. The world is slowly and steadily learning and experiencing the advantages this new age of technology has to offer, which is why the story is constantly developing and changing. Get the latest Bitcoin price here. More to LearnThe red-hot currency is here to stay and has the potential to further disrupt traditional industries and transactional methods. Even though the mass adoption may see bumps due to opposition from world economies and governments, the digital currency is sure to make headlines due to mass adoption by the tech buffs and cryptocurrency aficionados swearing by the currency’s revolutionary power. BI Intelligence has put together two detailed reports on the blockchain: The Blockchain in the IoT Report and The Blockchain in Banking Report to give you all the latest insights and an in depth insider view into the world of this techno-currency revolution. To get these reports, plus immediate access to more than 250 other expertly researched reports, subscribe to an All-Access pass to BI Intelligence. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now You can also purchase and download the full reports from our research store: |
BlackRock Strategist: There's No 'Right or Wrong' Price for Bitcoin
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CoinDesk, 1/1/0001 12:00 AM PST BlackRock Chief Investment Strategist Richard Turnill says cryptocurrencies are in a bubble right now, but that blockchain technology is promising. |
BitMEX Clarifies Position on Bitcoin Hard Forks With SegWit2x Looming
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post BitMEX Clarifies Position on Bitcoin Hard Forks With SegWit2x Looming appeared first on CryptoCoinsNews. |
STOCKS HIT RECORD HIGHS: Here's what you need to know
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Business Insider, 1/1/0001 12:00 AM PST
The major averages closed at record highs on Friday. The day didn't start out so well though, as General Electric caught investors off-guard with its disastrous earnings report ahead of the bell. But, after sliding more than 6% at the open, GE ended the day higher and the S&P 500, Dow Jones industrial average and Nasdaq posted their best closes of all-time. Here's the scoreboard:
Other headlines The stock market's robot revolution is here JPMORGAN: Tesla could have to raise the price of the Model 3 Republicans are considering a proposal that would radically change the way you save for retirement Apple will have only shipped 3 million iPhone X units when it launches — good luck finding one
SEE ALSO: What you need to know on Wall Street today |
STOCKS HIT RECORD HIGHS: Here's what you need to know
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Business Insider, 1/1/0001 12:00 AM PST
The major averages closed at record highs on Friday. The day didn't start out so well though, as General Electric caught investors off-guard with its disastrous earnings report ahead of the bell. But, after sliding more than 6% at the open, GE ended the day higher and the S&P 500, Dow Jones industrial average and Nasdaq posted their best closes of all-time. Here's the scoreboard:
Other headlines The stock market's robot revolution is here JPMORGAN: Tesla could have to raise the price of the Model 3 Republicans are considering a proposal that would radically change the way you save for retirement Apple will have only shipped 3 million iPhone X units when it launches — good luck finding one
SEE ALSO: What you need to know on Wall Street today Join the conversation about this story » NOW WATCH: RAY DALIO: You have to bet against the consensus and be right to be successful in the markets |
A chilling sentence from Bank of America's tech chief should have a big chunk of Wall Street worried (BAC)
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Business Insider, 1/1/0001 12:00 AM PST
Technology is moving front and center on Wall Street, and it has many people worried about their jobs. Wall Street is ramping up spending on technology and hiring more people with tech skills, especially in trading where profits have been harder to come by and banks are looking to cut costs. According to data from Coalition, on average the top 12 investment banks decreased headcount in sales and trading near 6% in 2016. Meanwhile, tech spending increased 1% in front office systems, according to Bloomberg reporting. JPMorgan, specifically, is on track to spend $9.5 billion a year in technology. And 47% of Goldman Sachs' recent job listings are in technology, according to CB Insights. So that means traditional Wall Streeters need to brush up on their tech skills, right? It turns out that it might not be so simple. There's a good chance that even if a trader tries to adjust to this shifting landscape, by sharpening his or her tech skills or learning how to read code, they could still lose their jobs. Bloomberg is running a series of stories on the tech revolution on Wall Street, and in a story by Sarah Ponczek and Dakin Campbell, Cathy Bessant, the chief technology and operations officer at Bank of America, said technology is changing too fast for traders to catch up. "Those of us in leadership roles know what's coming, we're helping to drive it and know what skill sets we need," said Bessant. What she said next to Bloomberg should worry anyone who isn't already conversant on coding and tech. According to Bessant, teaching existing talent new tech skills is not worth it in most cases: “The kind of skills that we’ll need have to be taught beginning at a much earlier age. Whether you can train the same worker at the same time you’re changing their job remains to be seen.” Wall Streeters, consider yourselves warned. Read the full report at Bloomberg >>SEE ALSO: Goldman Sachs has made a big hire in electronic trading Join the conversation about this story » NOW WATCH: RAY DALIO: Bitcoin is a speculative bubble |
Bitcoin Breather? Higher Price Push Still Possible on Search Demand
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CoinDesk, 1/1/0001 12:00 AM PST The price of bitcoin continues to climb, and if price charts are any indication, there could be clear skies ahead. |
Snap rises after layoffs and plans to slow hiring (SNAP)
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Business Insider, 1/1/0001 12:00 AM PST
Read Alex Heath's story about the layoffs at Snap here.SEE ALSO: Snap hit with more layoffs, plans to slow hiring in 2018 (SNAP) |
Snap rises after layoffs and plans to slow hiring (SNAP)
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Business Insider, 1/1/0001 12:00 AM PST
Read Alex Heath's story about the layoffs at Snap here.SEE ALSO: Snap hit with more layoffs, plans to slow hiring in 2018 (SNAP) Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble |
What you need to know on Wall Street today
Bitcoin Price Hits $6,054, Factors Behind New-All Time High
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post Bitcoin Price Hits $6,054, Factors Behind New-All Time High appeared first on CryptoCoinsNews. |
The stock market's robot revolution is here
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Business Insider, 1/1/0001 12:00 AM PST
The long-awaited rise of the machines is here, at least in the stock market. The first artificial intelligence-powered exchange-traded fund launched on October 18. Called the AI Powered Equity ETF (ticker: AIEQ), it uses IBM's Watson supercomputing technology to analyze more data than humanly possible, all in the pursuit of building the perfect portfolio of 30 to 70 stocks. The ETF ranks investments based on their "probability of benefiting from current economic conditions, trends, and world- and company-specific events" and picks those with the best chance at outperformance, according to a recent release. And the technology enables it to do that while constantly analyzing information for 6,000 US-listed companies. The top three positions as of Friday were CIT Group, Penumbra and Genworth Financial. The fund was founded by EquBot, which is a part of IBM's Global Entrepreneur program, and is offered to investors through a partnership with ETF Managers Group. EquBot initially sprouted from a discussion between the cofounders in an MBA classroom at UC Berkeley's Haas School of Business. The ETF launch comes at a time when passive investment has never been hotter. The combined assets of US ETFs hit $3.1 trillion in August, increasing roughly $700 billion in a single year, according to Investment Company Institute data. And many of those strategies already employ computer-driven quantitative strategies. So what sets AIEQ apart? Chida Khatua, CEO and co-founder of EquBot, argues that their technology is more advanced, which gives it a big advantage. "As powerful as many algorithms underlying expensive quantitative hedge funds and other vehicles might be, unless they’re also built with AI and machine learning baked right in, mistakes can be propogated and opportunities for outperformance can be missed," he said in the October 18 release. In three days of trading, the fund has risen 0.8%, double the S&P 500 over the same period. What's more, the ETF has averaged about 193,000 units traded per day, a strong showing for a fledgling fund. It had around $3.2 million in assets on Friday afternoon. Of course, a much longer time frame will be needed to assess whether the ETF is actually able to translate its massive computing power into market-beating returns. But so far, so good. SEE ALSO: If Trump is doing so horribly, why is the stock market doing so well? Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble |
JPMORGAN: Tesla could have to raise the price of the Model 3 (TSLA)
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Business Insider, 1/1/0001 12:00 AM PST
Tesla is in production hell right now. The company only produced 260 Model 3s in the third-quarter when it hoped for more than 1,500. In a note to clients on Friday, JPMorgan suggested that if Tesla's production troubles continued, it might be forced on the defensive. "We worry that if the vehicle proves structurally more expensive to manufacture, that in order to preserve the targeted gross margin, Tesla may need to increase the price of the vehicle to consumers, with negative implications for demand," JPMorgan said. Right now, Tesla has an estimated 450,000 preorders for its Model 3. The company has said it is facing production bottlenecks that it hopes to solve soon, but JPMorgan isn't optimistic. The bank said that investors are underestimating the risk of Tesla not being able to solve its production problems. If the Model 3 is simply harder to manufacture than Tesla predicted, it could mean lower delivery numbers and potentially higher prices for the new car. Both of these problems would put dents in the "mass-market" branding of the Model 3. JPMorgan lowered its production forecasts for the Model 3 to 15,000 in the fourth quarter, half of its previous forecast. The bank also lowered its earnings expectations for Tesla. JPMorgan now is expecting a loss of $7.34 per share for 2017, down 13.9% from its previous prediction of a loss of $6.44 per share. It lowered its 2018 and 2019 earnings forecasts as well, predicting that the company won't post a profit until 2020. Tesla is down 1.48% on Friday following JPMorgan's report but is still up 61.4% this year. Read more about Tesla's manufacturing woes here.
SEE ALSO: Silicon Valley is struggling to understand Tesla's Model 3 production problems — here's why |
There's now a clear reason why September's jobs report was terrible
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Business Insider, 1/1/0001 12:00 AM PST
The September jobs report showed a stunning drop in net nonfarm payrolls by 33,000, the first time the US economy shed jobs since 2010. State-level data released on Friday made clear that most of the job losses occurred in Florida. "Payrolls declined 127,000 in Florida in September, a result significantly weaker than the prior trend (+17,000 per month over the prior six months)," said Daniel Silver, an economist at JPMorgan, in a note on Friday. "It is likely that payrolls in the state will rebound in October, although it is not clear if all of the job losses will be made up by the time of the October reference period." Ahead of the payrolls release earlier in October, economists had a wide range of expectations for how the hurricanes impacted the labor market. That gap in forecasts — from as many as 260,000 net new jobs to as low as -45,000 — showed how uncertain the economic impact was. But additional data is making it clearer. "There was also noticeable, but less dramatic, weakening in the data for some other areas affected by recent storms, including Texas," Silver said. The trend in jobs growth slowed down even in areas that were not affected by hurricanes. One explanation economists offer is that the economy is approaching a level associated with full employment, with the official unemployment rate at its lowest level since September 2001. However, the number of working-age people who aren't looking for jobs has not fully recovered to its pre-recession level. SEE ALSO: A key measure of the jobs market just fell to its lowest level since 1973 |
$6,054: Bitcoin Price Soars to All-Time High
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post $6,054: Bitcoin Price Soars to All-Time High appeared first on CryptoCoinsNews. |
Shake Shack founder Danny Meyer banned tipping at his restaurants — but employees say it has led to lower pay and high turnover
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Business Insider, 1/1/0001 12:00 AM PST
Danny Meyer doesn't like tipping. He has said that the practice lets restaurants get away with paying servers insufficient wages, and in January, he called it "one of the biggest hoaxes pulled on [American] culture." In 2015, Meyer, who also owns Shake Shack, decided to eliminate tipping at restaurants in his Union Square Hospitality Group — which includes Union Square Cafe, Gramercy Tavern, and The Modern — and raise prices in an attempt to give his employees more stable and equitable wages. While the policy has not been implemented at all of his restaurants yet, those that have removed tips have experienced some turmoil, according to Grubstreet, which interviewed current and former employees of Meyer's restaurants. Some say that the policy has resulted in lower wages and higher turnover. While many employees continue to appreciate the generous benefits and flexible scheduling that the restaurants provide, even some of Meyer's most loyal employees said they couldn't afford to live with lower pay. After working at Union Square Cafe for over three years, Danielle Carroll quit just two months after she stopped receiving tips. "That place was my New York home and the way I made my living, and it's no longer a sustainable place to do that," she told Grubstreet. Since Maialino eliminated tips in 2016, nearly all of its front-of-house employees have reportedly quit and been replaced twice. North End Grill, Gramercy Tavern, and Union Square Cafe have faced similar rates of turnover. Many of these problems stem from Meyer's insistence that employees would take home pay that was equal or greater to what they received with tips. But this prediction relied on stable business across his restaurants, a forecast that has not held.
Current and former servers at Gramercy Tavern and Maialino said they took home around $100 less per week than they had with tips. One Union Square Cafe employee reported a $10,000 annual decrease in pay. Some have benefitted from the no-tip experiment, including entry-level cooks, who have seen hourly wages increase from around $11 to $13, but most employees are waiting for it to pay off. Still, many remain hopeful and recognize that, while the intentions behind Meyer's decision are noble, it may take time for them to produce their desired effect. Whatever the result, Meyer's decision to eliminate tips will likely have a profound effect on the restaurant industry. Union Square Hospitality Group did not immediately respond to Business Insider's request for comment. SEE ALSO: Some of America's top restaurateurs are being accused of conspiracy in a bizarre lawsuit DON'T MISS: Shake Shack founder Danny Meyer calls tipping a massive hoax that was born out of slavery Join the conversation about this story » NOW WATCH: Gary Shilling calls bitcoin a black box and says he doesn't invest in things he doesn't understand |
Sketchers is skyrocketing after stellar earnings (SKX)
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Business Insider, 1/1/0001 12:00 AM PST
To see a live chart of Sketchers' stock price, click here.SEE ALSO: Sketchers live stock price |
Quiet Surge: Bitcoin Price Sets New High Just Below $6,000
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CoinDesk, 1/1/0001 12:00 AM PST Bitcoin's price has crossed the $5,900 mark for the first time, setting a new all-time high. |
There could be good news coming for one side of a war tearing Wall Street apart (NDAQ)
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Business Insider, 1/1/0001 12:00 AM PST
Wall Street has been embroiled in a civil war between traders and exchanges over the rising cost of market data, and a recent hire by the Securities and Exchange Commission is being viewed as a win by one side of the war. The SEC on Wednesday announced Brett Redfearn, a trading exec at JPMorgan, will join the regulatory watchdog as director of its division of trading and markets, overseeing exchanges, high-frequency trading and other market makers. Big traders have long accused exchanges such as the NYSE and Nasdaq for unfairly spiking the cost of their proprietary market data, which market makers claim is essential to competing in the trading business. The exchanges, in contrast, argue that these feeds are optional, that there is competition, and that trading firms can terminate feeds and other service arrangements if they get too pricey. They also say market makers can use more affordable SIP data, which provide an aggregated feed of all the exchanges data, to get a picture of the markets. When Redfearn was global head of equity market structure at JPMorgan, he sided against the exchanges in a letter to the SEC, saying SIP data is effectively useless (emphasis ours): "Unlike SIPs, 100% of the revenues from competing, proprietary market data products go to the exchanges selling that data. These proprietary data products are far superior to the product produced by the SIPs, such that broker-dealers — including my firm — must purchase these proprietary data feeds from exchanges to provide competitive trading products for our clients. "The latency issues associated with the SIP are today so well known that, for broker-dealers providing electronic trading products, 'using the SIP' is considered uncompetitive. In client meetings, it is imperative that we reiterate that we use direct feeds." The logic is: Without the exchanges' proprietary data traders don't have clients. That gives exchanges the upper hand, some critics say, to increase the costs of proprietary data. Rising costs have become a pain point for traders, many of whom are also facing historically low volatility, which has sapped the markets of profit opportunities. Redfearn's appointment, which came as a surprise to many people on Wall Street, is being viewed as a signal that the tide may turn. "Now you have someone with some influence that really cares about this issue who is in a position to push things in that direction," Michael Friedman, general counsel and chief compliance officer at Trillium, a trading technology firm, told Business Insider. Friedman said that a shift could be good for exchanges because their current business model is "unsustainable." "When you have all of your customers unhappy, that's not going to last very long," Friedman said. "ICE is the biggest culprit here, CME and Bats are the least bad, and Nasdaq is somewhere in between." Vlad Khandros, head of market structure and liquidity strategy at UBS, told Business Insider in an emailed statement that data fees are "substantial" and changes would be welcomed. "We are hopeful that enhanced governance would introduce greater transparency and lead to more rational fee structures," Khandros said. Kirsten Wegner, the recently appointed chief executive officer of Modern Markets Initiative, an advocacy organization founded by four quantitative trading firms, told Business Insider that Redfearn's appointment indicates that the SEC will be more motivated to prioritize the issue of market data costs. "On one hand, exchanges are expensive to run and are for-profit entities with a duty to maximize revenue for shareholders," Wegner said. "On the other hand, there is a lot of growing industry attention from the brokerage community, SIFMA, Bloomberg, and also the Treasury report, for the SEC to take a look at the question of how the exchange fees are assessed.” Earlier this month the Treasury Department released a report outlining a number of recommendations for the SEC to consider on the issue of market data. "Treasury suggests that the SEC consider whether proposed self-regulatory organization (SRO) rules establishing data fees are 'fair and reasonable,' 'not unreasonably discriminatory,' and an 'equitable allocation' of reasonable fees among persons who use the data," the report said. Richard Repetto, an analyst at Sandler O'Neill + Partners who covers a number of exchanges and trading firms, told Business Insider that he expects Redfearn to act without bias in his new position. "He is a knowledgeable professional who will take a balanced approach taking everyone's position into account," Repetto said. Some exchange employees told Business Insider there's a chance that Redfearn might have to recuse himself on any rulings related to market data because of his past comments. “As a matter of policy we don’t comment on regulatory appointments," Ed Canaday, a spokesperson for ICE, the parent company of the New York Stock Exchange, said in an email to Business Insider. Nasdaq declined comment. The SEC did not respond to this reporter. SEE ALSO: There's a new 'hot-button' issue on Wall Street, and battle lines are being drawn Join the conversation about this story » NOW WATCH: TOP STRATEGIST: Bitcoin will soar to $25,000 in 5 years |
Newsflash: Bitcoin Price Goes Berserk, Tears Past $6,000
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Bitcoin spikes to a record high near $6,000
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Business Insider, 1/1/0001 12:00 AM PST
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100 Diplomas: MIT Issues Graduate Certificates on a Blockchain App
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CoinDesk, 1/1/0001 12:00 AM PST Massachusetts Institute of Technology has used bitcoin's blockchain to issue digital diplomas to over 100 graduates as a part of a pilot project. |
Wall Street Analyst Gary Shilling: I Don’t Understand Bitcoin
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post Wall Street Analyst Gary Shilling: I Don’t Understand Bitcoin appeared first on CryptoCoinsNews. |
PayPal is spiking after a solid earnings beat (PYPL)
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Business Insider, 1/1/0001 12:00 AM PST
To get a live stock price for Paypal click here.SEE ALSO: GE is getting smoked after missing big on earnings |
Dan Loeb’s Third Point hedge fund is crushing the competition
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Business Insider, 1/1/0001 12:00 AM PST
In a letter to clients Friday, following the end of the third quarter, the fund reported year-to-date returns of 14.5% for its Offshore Fund and 23.0% for its Ultra fund. The average fund was up 5.92% through September 2017, according to Hedge Fund Research. In the same 9-month period, the S&P 500 has returned 14.2%.
"Deregulation is occurring quickly and although tax reform remains in the works, we expect that markets will continue to move higher, driven by strong consumer and business confidence combined with synchronized global growth," the hedge fund said. "The strength in global growth is largely owed to the worldwide easing of financial conditions that started during the first quarter of 2016, catalyzed by the weakening of the US Dollar and the Fed’s failure to execute on its forecasted four interest rate hikes last year." Congress took a first step to finally legislating tax reforms on Thursday, when the Senate passed a budget resolution containing Reconciliation, which would allow Republicans to pass a tax bill through the chamber with only a simple majority. Third Point also acquired Illinois-based Dover Corporation, a $15 billion industrial conglomerate. Loeb said the fund can increase shareholder value by addressing underperforming segments of Dover’s business and optimizing capital allocation. "Mapping out the course to year-end, we see more of the same conditions. While we invest a lot of time and effort in the analysis of policymaking, it doesn’t appear for now that any of the incremental changes under consideration in tax cuts or rates – whether or not they come to pass – will materially impact the markets," Third Point said. "We expect the Fed to continue to raise rates but changes to FOMC leadership will determine the pacing." Join the conversation about this story » NOW WATCH: TOP STRATEGIST: Bitcoin will soar to $25,000 in 5 years |
General Electric's disastrous earnings report caught traders off guard (GE)
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Business Insider, 1/1/0001 12:00 AM PST
General Electric's stock is getting whacked after the company fell short of analyst estimates and slashed its forecast. And to make matters worse, traders weren't braced for a drop that stretched as deep as 6.3% in the company's shares on Friday, a loss that has the stock at its lowest level in more than four years. They were paying the lowest premium in eight years to protect against a decline in GE's stock, relative to bets on an increase, according to data compiled by Bloomberg. In other words, they were completely unhedged against the type of damage the stock incurred on Friday.
In addition, short interest on GE — a measure of bets that the stock will fall — actually declined heading into the earnings report, implying that investors were getting more confident in the preceding weeks. It was an acceleration of a bullish trend seen all year, as short interest as a percentage of shares available to loan has dropped precipitously from 2017 highs, according to IHS Markit data. Based on trading activity, investors are scrambling to make up for lost ground. Less than 10 minutes into Friday's trading session, GE's stock had already seen two-thirds of the volume it normally sees in a full day.
Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble |
Ethereum, Bitcoin Prices Stabilize After Day of Sideways Trading
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ECB President: Bitcoin Not 'Mature' Enough to Be Regulated
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CoinDesk, 1/1/0001 12:00 AM PST Mario Draghi, president of the European Central Bank (ECB), has said that cryptocurrencies are not "mature" enough to be regulated. |
Bitcoin Price Nears $10,000 in Zimbabwe Due to a Lack of Cash in the Country
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post Bitcoin Price Nears $10,000 in Zimbabwe Due to a Lack of Cash in the Country appeared first on CryptoCoinsNews. |
GE is getting smoked after missing big on earnings (GE)
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Business Insider, 1/1/0001 12:00 AM PST
Read more about GE's earnings results here.SEE ALSO: General Electric misses big on earnings, slashes its forecast Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble |
The Canadian dollar is tumbling after disappointing data
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Business Insider, 1/1/0001 12:00 AM PST
SEE ALSO: There's a surprising winner from China's ban on North Korean coal |
Here's a super-quick guide to what traders are talking about right now
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Business Insider, 1/1/0001 12:00 AM PST
Dave Lutz, head of ETFs at JonesTrading, has an overview of today's markets.
Here's Lutz:
SEE ALSO: 10 things you need to know before the opening bell Join the conversation about this story » NOW WATCH: THE BOTTOM LINE: The 'Trump trade' is back and Ray Dalio breaks down the bitcoin bubble |
Sweden’s Government Sells Bitcoin in Auction at a Premium Price
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post Sweden’s Government Sells Bitcoin in Auction at a Premium Price appeared first on CryptoCoinsNews. |
Traders are swelling with confidence on the latest tax reform progress
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Business Insider, 1/1/0001 12:00 AM PST
Traders worldwide piled into riskier assets on Friday after the Senate passed its fiscal year 2018 budget resolution on Thursday, helping pave the way for Republican tax reform. The S&P 500 index of US stocks climbed 0.3%, while the dollar climbed versus all but two of its 16 major counterparts. That included a 0.8% gain against the Japanese yen and a 0.6% increase relative to the euro. News of tax reform progress is providing some relief for the stock market in particular, which grappled with weakness on Thursday before finishing slightly higher on the day. Corporate tax cuts are expected to boost profits for domestic corporations, while a one-time repatriation tax holiday is forecast to help companies with more international exposure. Stocks also increased on a global basis, with the Euro Stoxx 600 climbing 0.2% and Germany's DAX up 0.1%, while the Hong Kong-based Hang Seng index surged 1.2%. Meanwhile, US Treasuries sold off, sending the 10-year yield up as much as 5 basis points to 2.37%, its highest in about three months. Risk optimism also spurred selling in gold — traditionally viewed as a safe haven asset.
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We talked to the chief investment strategist at $6 trillion fund giant BlackRock about stocks, bitcoin and the Fed (BLK)
Business Insider, 1/1/0001 12:00 AM PST
Richard Turnill is the chief investment strategist at BlackRock, the world's largest money manager with $5.98 trillion under management. In an interview with Business Insider's Sara Silverstein, Turnill spoke candidly about market valuations, and why he's still bullish on stocks today, despite fears that equities may have reached a peak. He says that, despite record-low volatility and a longer streak of economic growth than has been seen in recent history, there's still room left to profit from the current business cycle, which isn't close to a downturn just yet. Here's the full interview: This transcript has been lightly edited for length and clarity. Sara Silverstein, Business Insider: After looking over a bunch of your research notes, you seem to be bullish on almost everything. Richard Turnill, BlackRock: We're certainly bullish on stocks, on risk assets right now. Silverstein: To jump right in there, how do you feel about valuations? We've been talking a lot about valuations seeming really high for equities. Turnill: The market's gone up a long way, and that's making people nervous. When people look at valuations, there are two concerns actually. When we look at most parts of the stock market today, we think they're reasonable. Importantly, when you think about what's the right value or fair value for the stock market, you have to think about what's the economic environment and interest environment we're in? Actually, in an environment of sustained economic growth and low interest rates, relatively high valuations can be supported for some time. We're actually much less concerned about valuations than many others. Although we would say that there are parts of the market which do look more highly valued. The US market looks more expensive than many international markets for example. So whilst we think the US market can do well, we see more upside in some of the international markets today. Silverstein: Within the US market, are you seeing opportunities there as well? Turnill: We absolutely see opportunities within the US market, and actually the economic environment in the US is very attractive. We see the Fed gradually raising interest rates going forward. That's an environment which is very good news for technology stocks.
Silverstein: Are you concerned at all about the Fed unwinding its balance sheet and what the valuations will look like when interest rates start rising? Turnill: One of the big risks to markets is that we have a policy mistake, that the Fed raises interest rates much more quickly than markets anticipate, unwinds its balance sheet much more aggressively, and we have a repeat of the taper tantrum. That's something that many investors, many of our clients, have been worried about for some time. We think the risk of that scenario is quite low. It's quite low because the Fed has been extremely deliberate in signaling what it's going to do. The Fed has now started the process of reducing its balance sheet, but it's done that in a way where actually the market has been extremely strong through that process, and that's because the Fed has signaled the move well in advance. Really the only piece of uncertainty there is what the endgame is. We can see the path of balance sheet reduction, but we don't know quite how far that will go. Our expectations on interest rates are that the Fed will end up doing more than the market's currently pricing in. The market today is only pricing in around two interest rate hikes between now and the end of next year. We actually think the Fed will do what it's telling us it will do, which is raise interest rates up to four times over that period. That could create some volatility, but it's still a very gradual path of interest rate hikes over time. So in that scenario, we think the market could continue to make good gains. Silverstein: Even if there is a little bit of volatility, you still see volatility staying low for a long time? I know a lot of people don't necessarily agree with that. Turnill: We're in a very low volatility environment right now, and many people see that volatility as a sign of complacency or a sign you should sell equities and take profits. Purely statistically, that's just not the case. If you sold every time we were in a low volatility environment, you'd miss a huge amount of upside. If you sold every time we were in a low volatility environment, you'd miss a huge amount of upside The low volatility environment we're in today reflects the very stable economic environment we're in. The economic data is incredibly stable, it's low volatility economic data. We're somewhere in the middle of a very long expansion. While that continues, we think the low volatility regime will continue, that's an environment where you're generally being paid to take risk. There are areas of the market where you're being paid more than others to take risk. It's an area where you effectively buy the dips. It's not like you won't get dips, of course there will be, there will inherently be turmoil in the market, there will be drawdowns. But in these low volatility regimes, you should be buying those dips rather than selling out. Silverstein: So you think we're somewhere in the middle of this economic expansion and not towards the peak of it? Turnill: Yeah I think one of the notable features of the cycle is it's been extremely long. We're now in the 8th year of the expansion. For my entire career, the average length of an economic expansion has been around eight years. Silverstein: So why do you think it's not about to end? Turnill: Because recessions don't start on a clock. You shouldn't measure the length of a cycle in years, you measure it in terms of the excesses that are building up in the economy. To what extent is excess capacity being consumed? So when you adjust this cycle for the fact that it's been one of the slowest cycles we've seen in economic history, actually, you come to the conclusion that rather than being at the end of a cycle, we're somewhere in the middle. Actually the time to the next recession could be measured potentially in years, so we feel like we've got some way to run. The time to the next recession could be measured potentially in years, so we feel like we've got some way to run Silverstein: Why do you feel like we're somewhere in the middle? Is it because of wage inflation? Turnill: What you're not seeing is any of the signs of excess in the economy that would typically build up if we're towards the end of a cycle. We don't see that in the labor market today. So you're right, wage inflation is low. We don't see that in broader consumer prices, so we think there's some upside potential to inflation going forward, but we're still in a very benign price environment. We don't see it in terms of leverage. We think about the signs of excess leverage that built up towards the end of the last cycle, we see very few signs — some pockets in areas like auto loans — but you don't see that broad increase in leverage that would flash a red warning sign that perhaps we're close to the end of the cycle. Silverstein: You like all of the equity factors right now? You like value? You like momentum? Turnill: We think factors are a good thing to have exposure to. Typically factors, if you're patient, will drive excess return over time. The two factors we prefer in this environment are the two you mentioned. We think momentum, typically does well. We're you're in this period of sustained expansion, winners typically keep winning. When we look at how expensive momentum stocks are right now, we come to the conclusion that they're not expensive. Look at how crowded momentum has become. Actually, contrary to many people's beliefs, momentum is very diverse right now. It's not about a handful of tech stocks. You see great momentum in financial stocks, in many industrial stocks, in many material stocks right now. It's very diverse group of stocks. We think momentum can continue to run. Value typically does well in this phase of a cycle as well. That's because value is typically associated with economic growth. It does well when interest rates gradually rise. So we'd focus on momentum and value. On the other side of that, factors like low volatility stocks, we think they may struggle, they typically do less well in this phase of the cycle. Silverstein: Is there anything else you think people are not getting paid for all the risk they're taking? Turnill: The one area we're a little more cautious about right now is small-cap stocks. The one area we're a little more cautious about right now is small-cap stocks They've done extremely well. I would say there's a lot of hope priced into US small-cap stocks today, hope around corporate tax cuts in particular. Russell 2000 is now trading around 25 times forward earnings. Those forward earnings themselves imply something around 20% earnings increases over the next 12 months, or a lot of hope that we're going to get significant tax cuts. That's an area where there's a lot on the price. Whereas if we look at areas like emerging markets, which have also done well, actually valuations are much more compelling. I think investors there really are being paid for taking the risk. Silverstein: So the economy will continue to expand, volatility can stay low, equities look good, mostly international. How do you feel about bitcoin? Turnill: We've been looking a lot at particularly blockchain as a technology. BlackRock, we're starting to use blockchain. I think it's a technology which is going to get more and more adoption over time. What that doesn't mean is that the value of bitcoin and broader cryptocurrencies should continue to go up and up. I would say that cryptocurrencies show many characteristics of a bubble right now, which is [to say] you've seen spectacular price increases. The main argument for buying them is that prices have risen, and are therefore going to continue to rise over time. But there's no inherent right or wrong price for bitcoin. You could say 'what's the fair value?' you know, I'm an investor, I like to think about the fair value of stocks of bonds. I can't answer what's the fair value for bitcoin or any cryptocurrency. For that reason, I'm not an owner. |
It's also very good news for financial stocks, which do very well in an environment of gradually rising interest rates over time. We prefer those two sectors. It's not so good for some sector such as consumer staples, some of the more defensive bond proxies, which I think are going to struggle to keep up in a rising interest rate environment. Why Erik Voorhees Keeps All His Assets in Bitcoin
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Bitcoin is ‘Worse than Casinos’, Says Russia’s Economic Development Minister
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After Dropping to $5120, Bitcoin Price Surges Above $5,650
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CryptoCoins News, 1/1/0001 12:00 AM PST […] The post After Dropping to $5120, Bitcoin Price Surges Above $5,650 appeared first on CryptoCoinsNews. |
Influential MP Nicky Morgan warns over lack of diversity at the Bank of England
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Business Insider, 1/1/0001 12:00 AM PST
LONDON — Nicky Morgan, the influential head of the House of Commons' Treasury Select Committee (TSC), is taking aim at the Bank of England a lack of diversity in its upper ranks. In an announcement on Friday, Morgan said that the TSC could in future refuse to ratify appointments to the Bank of England's major policy committees — which are made by the Treasury — if greater efforts are not made to improve the number of non-male, non-white policymakers. "The Treasury must make all efforts to encourage as diverse range of candidates for the Bank’s policy committees as possible," Morgan said in a statement on Friday, having written to Chancellor Philip Hammond about the subject. Morgan's initiative comes after the TSC approved the appointments of two new members of the bank's key ratesetting group, the Monetary Policy Committee — Professor Silvana Tenreyro, and Sir Dave Ramsden. Gender diversity in the Bank of England's highest ranks has suffered in recent months, following the departures of several female officials. MPC members Minouche Shafik and Kristin Forbes both left the committee at the end of their terms this year, while Deputy Governor Charlotte Hogg resigned her role in March after failing to declare that her brother works for Barclays, a potential conflict of interest. Jenny Scott, a key lieutenant of Governor Mark Carney, and one of the bank's executive directors also departed earlier this year. These exits have left the bank vulnerable to accusations of being a so-called Boys Club — with only middle aged, largely white, men in its higher ranks. The TSC is now seeking to address that, with Morgan stating on Friday that the committee wants to be shown "a breakdown by gender of applicants at each stage" of the appointment process for senior BoE officials, such as members of the Monetary Policy Committee, and Financial Policy Committee. Earlier this year, Governor Carney said that the Bank of England is committed to improving both diversity in terms of gender, ethnicity, age, disability, sexual orientation, and education, but also "cognitive diversity." Morgan, who took over from long-serving TSC chairman Andrew Tyrie after the summer's general election, has looked to stamp her authority on the role immediately, launching investigations into a wide range of topics, including proposed changes to UK listing rules designed to attract the initial public offering of Saudi Aramco to London. Under her leadership the TSC is also, among other areas, investigating student loans, and RBS' alleged mistreatment of certain business customers. Join the conversation about this story » NOW WATCH: TOP STRATEGIST: Bitcoin will soar to $25,000 in 5 years |
IKEA UK CEO: TaskRabbit deal is part of plan to 'become more relevant'
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Business Insider, 1/1/0001 12:00 AM PST
IKEA surprised the market last month by buying US startup TaskRabbit, a platform that lets people hire temporary workers to do odd jobs ranging from cleaning homes to running errands — and even assembling furniture. Anyone can join the platform to do casual work and earn a bit of money. Gillian Drakeford, IKEA's UK CEO, told Business Insider in an interview this week: "IKEA can't do everything itself. When we look at the gig economy, the platform economy, this has the ability to bring people together that have skills and experiences." IKEA already offered installation services for big-ticket items but Drakeford said the company realised that there was a gap in the market for smaller, cheaper jobs. "It could be something like hanging a curtain rail or a mirror — it's not just installing a kitchen."
"What we saw very clearly was that there were lots of people assembling IKEA furniture via TaskRabbit — IKEA experts," Drakeford said. "I met one of the Taskers who had been assembling a Hemnes Day Bed over a number of years and he could see the development in the product in order to reduce the assembly time. He was as passionate as many of our coworkers were." The acquisition forms part of IKEA's efforts to "become more relevant to the customer," Drakeford said. "It's not enough just to have a great product with a great price. We need to offer services. People are saying there's value to time — I don't have the time to assemble it myself. I don't necessarily have the time to install things myself. Actually, I'm looking for services from you." The Financial Times reported earlier this month that IKEA has set up a special team to look for more acquisitions following the TaskRabbit deal. Asked what other deals IKEA might pursue, Drakeford said: "Whatever we engage in, it will be about moving IKEA to be a more relevant brand for the many people." She added: "I think today about the work their doing in Sweden — a lot of [IKEA] products there are already in the second-hand market. They have worked together with the schemes to ensure that's connected to our website. If I'm shopping for a sofa and I can't afford the price today, I'm offered a second hand or upcycled product. This is one of the areas where I think we'll need to work with others." Join the conversation about this story » NOW WATCH: RAY DALIO: Bitcoin is a speculative bubble |
IKEA trialled a partnership with TaskRabbit in the UK last year.10 things you need to know in markets today
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Business Insider, 1/1/0001 12:00 AM PST
Good morning! Here's what you need to know in markets on Friday. 1. Lyft has secured $1 billion (£760 million) in a funding round led by Alphabet's investment arm, CapitalG, giving it a post-money valuation of $11 billion (£8.4 billion). Ride-hailing app Lyft has been growing its cash cushion to take on Uber. The $1 billion Lyft secured in funding on Thursday follows a $600 million (£457 million) funding round in April. 2. German Chancellor Angela Merkel offered one of her most positive assessments of Brexit talks in months on Thursday, saying she believed negotiations between the EU and Britain were moving forward and dismissing the prospect of a breakdown. Reuters reports that Merkel made her comments after the first day of a European Union summit at which British Prime Minister Theresa May appealed to her fellow leaders to help her silence critics at home and break a deadlock in the talks. 3. SoftBank plans to invest roughly $880 billion (£671.1 billion) in tech companies through at least three more iterations of its Vision Fund, CEO Masayoshi Son recently told Nikkei. The Japanese conglomerate already commands the world's biggest private equity fund with the $100 billion (£76.2 billion) it raised for the first Vision Fund this year. But the colossal amount of capital is just "the first step," according to Son, who said he is already working to establish a second Vision Fund in the next two or three years. 4. Asian shares inched slightly higher on Friday but grappled for firmer leads as speculation about who the next US central bank chief will be kept global investors wary. Japan's Nikkei is up 0.03% at the time of writing (6.30 a.m. BST/1.30 a.m. ET), while the Hong Kong Hang Seng is up 0.95%, and China's Shanghai Composite is up 0.12%. 5. Bank of England Deputy Governor Jon Cunliffe said on Thursday it was not clear that interest rates needed to rise soon, showing at least two of the central bank’s nine policymakers are unlikely to vote for a hike in November. Reuters reports that Cunliffe told BBC radio he did not see signs of sustained upward inflation pressure. 6. Goldman Sachs CEO Lloyd Blankfein spelled out the bank's post-Brexit plans for Europe in a Tweet. "Just left Frankfurt," he tweeted. "Great meetings, great weather, really enjoyed it. Good, because I'll be spending a lot more time there. #Brexit." 7. Interserve appeared to be fighting for its survival last night as the company crashed through its banking covenants, sending shares in the construction and cleaning group plunging to new lows. The Times reports that Interserve stock closed nearly 30% lower at 65½p after its latest profit warning that underlying earnings would more than halve while debts continue to soar. 8. UK borrowing numbers are coming. Public sector net borrowing figures for September will be released by the Office for National Statistics (ONS) at 9.30 a.m. BST (4.30 a.m. ET). Economists are forecasting a rise in borrowing to £5.7 billion, up from £5 billion previously. 9. Closely-watched German fintech startup N26 is recruiting a country manager to spearhead its launch into the UK. A job listing on N26's website says it is looking for someone to take "charge of the market entry of N26 in the UK." 10. Russian President Vladimir Putin has reportedly decided that the time has come for a national cryptocurrency called the CryptoRuble. Last week, Russian authorities discussed heavily regulating Bitcoin and other cryptocurrencies, even going so far as planning the closure of all websites that sell them. Join the conversation about this story » NOW WATCH: These are the watches worn by the smartest and most powerful men in the world |
German app-only bank N26 gears up for UK launch as it recruits country manager
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Business Insider, 1/1/0001 12:00 AM PST
LONDON — Closely-watched German fintech startup N26 is recruiting a country manager to spearhead its launch into the UK. A job listing on N26's website says it is looking for someone to take "charge of the market entry of N26 in the UK." The successful applicant will be "responsible for the operational setup and development of N26 in the UK market," and should "build up the branding for N26 within the UK market in order to successfully attract and win new customers." A spokesperson for N26 declined to comment on the app-only bank's timeline for launch in the UK. The Times reported in April that Berlin-based N26 wanted to launch in Britain by the end of the year. When Business Insider asked cofounder and CFO Maximilian Tayenthal this in June, he said: "It's a really interesting market and we are thoroughly looking at it. I don't want to commit to any timeline." It's unclear when N26 first posted the job listing but the same advert was posted on LinkedIn at the start of October. Business Insider understands that at least one person at a leading London fintech business has been approached by N26 about the job in recent weeks. Founded in 2013 and launched in 2015, N26 is a so-called "neobank" — a branchless bank that offers all its services through a smartphone app. The company operates across 17 countries in Europe, including Germany, France, Italy, and Spain, and has already signed up half a million customers. N26 is one of a number of app-only bank or bank-like services that have sprung up across Europe in the last few years. UK rivals include Monzo and Revolut. N26 has a significant war chest to take on competitors. The 290-person business has raised over $55 million (£42.7 million), most recently raising $40 million (£31 million) from investors including Hong Kong billionaire Li Ka-Shing last June. Join the conversation about this story » NOW WATCH: Gary Shilling calls bitcoin a black box and says he doesn't invest in things he doesn't understand |
USV’s Fred Wilson Dismisses Bitcoin Crash Prediction, Explains Optimal Crypto Holdings for Investors
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