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Minutes of the Federal Open Market Committee, June 9-10, 2020
July 1, 2020--Participants discussed tools for conducting monetary policy when the federal funds rate is at its effective lower bound (ELB). The discussion addressed two topics: (1) the roles of forward guidance and large-scale asset purchase programs in supporting the attainment of the Committee's maximum-employment and price-stability goals and (2) in light of the foreign and historical experience with approaches that cap or target interest rates along the yield curve, whether such approaches could be used to support forward guidance and complement asset purchase programs.
The staff briefing on the first topic focused on outcome-based forward guidance for the federal funds rate-which ties changes in the target range for the federal funds rate to the achievement of specified macroeconomic outcomes, such as reaching a given level of the unemployment rate or inflation-and asset purchase programs of the kind used during and following the previous recession.
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Source: federalreserve.gov
Solactive strengthens its Presence in Canada with Hamilton ETFs issuing two Bank ETFs on Solactive Indices
June 30, 2020--Both the Canadian and Australian banking sector remain long-distance runners. With an average net annual return of 11%[1] since 1996 for the Solactive Australian Bank Equal-Weight Index and 14.4% over three decades[2] for the Solactive Canadian Bank Mean Reversion Index, Canadian ETF provider Hamilton Capital Partners Inc. ("Hamilton ETFs") recognized the potential of these bank indices and licensed both indices as the underlying for two new index ETFs in Canada.
The rules-based strategies are aimed at Canadian investors who want to benefit from investing in two world class banking sectors with excellent long-term performance and attractive dividends. With the release of the two ETFs, Solactive expands its market share in Canada once more.
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Source: Solactive AG
US IPO Market-The IPO Market Stages a Swift Recovery in the 2Q20
June 30, 2020--IPOs to Raise $15 Billion as the IPO Window Springs Open in June
Average IPO Returns 61%, while Renaissance IPO Index Soars 52%
Biotechs Drive the Healthcare Sector to Make Up Almost Two-Thirds of IPO Activity.
Private Equity Has the Biggest Quarter by Proceeds in Six Years
2020 Regains Momentum as Numerous Private Companies Line up for 3Q Debuts
The second quarteris expected to see 39 IPOs raise $15billion. After coronavirus volatility caused the slowest April and May since the Great Recession, IPO activity roared back in June, buoyed by stellar returns.
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Source: Renaissance Capital
Winthrop Capital Management-Weekly Insights-The Half-Way Point of the Year
June 30, 2020--'Did I miss anything?'-Daniel Thorson
Emerging from a 75 day silent retreat in early June, Daniel Thorson asked the question through a tweet: "Did I Miss anything?" In early March this year, Thorson had voluntarily cut himself off from society and remained isolated in a remote cabin in northwestern Vermont as part of a Buddhist spiritual retreat.
Like Rip Van Winkle, although away for a much shorter period of time, the world had changed.
The first six months of this year has been the most tumultuous period in recent history. The pandemic forced the closing of the global economy, shutting down businesses, travel, and entertainment. Almost everything that our society takes for granted was closed. The result was a massive dislocation in demand and resources. The complexity is compounded by the global connectivity of economies and capital markets.
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Source: Winthrop Capital Management
Hedge Funds, Banks Picked Up the Phone While Pandemic Raged
June 30, 2020--Hedge funds' No. 1 response to the pandemic? Pick up the phone.
Buy-side firms' most-cited reaction to market uncertainty caused by the coronavirus pandemic was to move toward more phone-based trading, with 31% listing it as their response during the early days of the outbreak, according to a study from Greenwich Associates released Tuesday.
Major banks and broker-dealers also relied more on telephones, with 19% saying they increased such trading and 17% saying they shut off auto-pricing technology as the pandemic roiled markets.
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Source: bloomberg.com
Fed Opens Lending Program for New Issuance of Corporate Debt
June 29, 2020-Effort is part of emergency programs the Fed is running to backstop lending markets reeling from coronavirus
The Federal Reserve formally opened Monday its $500 billion lending program to support issuance of new debt by large corporations, the last of nine emergency programs it is running to backstop lending markets reeling from the coronavirus pandemic.
The Fed began purchasing earlier this month individual bonds of large companies that were highly rated as of March 22, but it hadn't yet said when it would initiate a companion effort to purchase newly issued securities by those companies.
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Source: wsj.com
Fed Becomes No. 3 Holder of World's Biggest Corporate-Bond ETF
June 29, 2020--It has purchased over 13 million shares of LQD through June 16
Central bank is likely to slow the pace of ETF buying: Tchir
The Federal Reserve became one of the top holders in some of the world's largest credit ETFs less than two months after stepping into the market.
The central bank owns more than 13 million shares of the $54 billion iShares iBoxx $ Investment Grade Corporate Bond exchange-traded fund (LQD) as of June 16, making it the third-largest holder, according to data compiled by Bloomberg.
Only Bank of America Corp. and Fisher Asset Management--both of whom have yet to file their second-quarter holdings--own more shares than the U.S. central bank.
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Source: bloomberg.com
Wall Street banks net record fees for pandemic fundraisings
June 29, 2020--Investment banking fees soared to a record $57bn in the first six months of the year, boosted by a series of lucrative debt sales as companies grabbed cash to tide them through the coronavirus crisis.
Emergency financings by carmaker Ford, cruise line operator Carnival and aerospace and defence group Boeing were among the fundraisings that provided multimillion-dollar paydays for Wall Street banks that found investors willing to stump up the money.
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Source: FT.com
SEC Updates Filing Threshold to Rule 17h Reporting Requirements for Broker-Dealers
June 29, 20202--The Securities and Exchange Commission today issued an order to update the filing threshold for broker-dealers' Form 17-H filings made pursuant to Exchange Act Rules 17h-1T and Rule 17h-2T.
The threshold, which had not been updated in nearly 30 years, will exempt certain smaller broker-dealers from the reporting requirements of the rules while continuing to provide important information to the Commission on the financial condition of covered broker-dealers and their affiliates.
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Source: SEC.gov
The Fed reveals which companies make its corporate-bonds shopping list
June 29, 2020-The Federal Reserve on Sunday released a list of roughly 750 companies, including Apple, Walmart and ExxonMobil, whose corporate bonds it will purchase in the coming months in an effort to keep borrowing costs low and smooth the flow of credit.
The central bank also said it has, so far, purchased nearly $429 million in corporate bonds from 86 of those companies, including AT&T, Walgreen's, Microsoft, Pfizer and Marathon Petroleum.
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Source: fortune.com
