Lead Stories

‘Something lurking out there’ will upset the stock market, says Blackstone’s Wien
Mark DeCambre – MarketWatch
Blackstone’s Byron Wien says investors enjoying a recent rally in the stock market shouldn’t get too comfortable, even if the Wall Street veteran is optimistic about the domestic economy over the next two or three years.
“My feeling is that there’s something lurking out there, Carl, that is going to upset the market and it’s probably a geopolitical event. Maybe the upcoming North Korea summit,” Wien said during a CNBC interview with anchor Carl Quintanilla Thursday morning.
/jlne.ws/2M8NrzG

How Strong Is the Economy Really?
John Jagerson and Wade Hansen – InvestorPlace
The U.S. economy has been showing many signs of strength during the past few months. Annualized gross domestic product is still growing at 2.2% according to the latest first-quarter 2018 data from the Bureau of Economic Analysis (BEA), unemployment of 3.8% is at its lowest level since 2000 and the Labor Department said Tuesday that the number of job openings has exceeded the number of people who are looking for jobs for the first time since it began keeping records of this relationship in 2000.
But how strong is the economy really?
/jlne.ws/2MbH6DI

Dollar, yen rise ahead of tense G7 summit
Gertrude Chavez-Dreyfuss – Reuters
The dollar rose on Friday after a four-day losing streak, while perceived safe-haven currencies such as the yen gained as investors grew cautious ahead of what is expected to be a contentious G7 meeting in Canada later in the session.
/jlne.ws/2JkjqPL

Crude Oil’s Scary Geopolitics
Bob Iaccino – Nadex
There’s plenty to think about if you’re a crude oil trader, whether you are long or short. Crude oil used to be the most volatile contract one could trade until cryptocurrencies came along. Interestingly, Bitcoin and its ilk may hand that title back over to crude oil in the very near future. OVX is the CBOE’s volatility index for crude and like the stock sensitive VIX in 2016, it has been trending lower the last 2 years as crude prices rose slowly and steadily. Yesterday the OVX closed at 28.05. in February of 2016, it had a monthly range of 58.09 to 81.12. The OVX has remained below 50 every month but 2 since June of 2016 and is likely due for a spike just like it’s equity-based cousin, the VIX.
/jlne.ws/2MbA3L3

Trump Feuds With Leaders of France, Canada Before Summit; President to depart Group of Seven summit early; Macron, Trump exchange barbed tweets in spat over tariffs
Vivian Salama – WSJ
The White House said President Donald Trump would leave the Group of Seven summit earlier than planned, as a dispute erupted Thursday between Mr. Trump and two of America’s closest allies over the U.S.’s trade stance.
/jlne.ws/2sPl4h1

Exchanges and Clearing

Cboe Global Markets Announces Date of Second-Quarter 2018 Earnings Release and Conference Call
Cboe
Cboe Global Markets, Inc. (Cboe: CBOE | Nasdaq: CBOE), one of the world’s largest exchange holding companies, today said it will announce its financial results for the second quarter of 2018 before the market opens on Friday, August 3, 2018. A conference call with remarks by the company’s senior management will begin at 7:30 a.m. Central Time (CT), 8:30 a.m. Eastern Time (ET).
/jlne.ws/2McaSYL

Regulation & Enforcement

SocGen executives ordered Libor rigging, US prosecutors believed; Two senior bank executives were named in 2015 letter to French authorities
Kadhim Shubber in Washington and David Keohane in Paris – FT
Top executives at Société Générale ordered the bank’s manipulation of the US-dollar Libor interest rate, according to previously unreported court documents that show US prosecutors had evidence in 2015 indicating high-level involvement in the scheme.
/jlne.ws/2sPUNzh

Strategy

Bullish VIX Trades from Yesterday
Russell Rhoads – Cboe
Yesterday VIX finished the day at 12.40 which is the lowest close since late January. The June VIX futures dropped 0.40 to 13.65 and the July contract closed at 14.50, down 0.25 on the day. With VIX at the lowest levels since before the market action in early February, we actually saw some bullish VIX spread trades come into the pit at the Cboe Options Market.
/jlne.ws/2JpxQKm

S&P 500: Just Keeps the Ball Rolling
Davin Blythe – Nadex
Yesterday the S&P 500 futures continued to climb, holding the trendline support we mentioned in yesterday’s article, and it continued to make its highest print since March 14th. Today in the overnight session, the index made a 2779.75 high. The index futures have been outperforming during the European hours over the last few sessions.
/jlne.ws/2Jn2sjM

Maintaining Risk Reduction While Reducing Interest Rate Risk
Phillip Brzenk – VIX Views
Previously, we highlighted that the S&P 500 Low Volatility Rate Response Index fared better than the S&P 500 Low Volatility Index when interest rates increased. The objective of low volatility portfolios is to deliver lower portfolio volatility than the broad market benchmark, leading to higher risk-adjusted returns over a long-term investment horizon.
/jlne.ws/2Mbg4wk

Miscellaneous

VanEck’s bitcoin ETF risk factors are 19 pages
Frank Chaparro – Business Insider
If at first you don’t succeed, try, try, and try again. That appears to be VanEck’s strategy when it comes to bitcoin-linked investments.
The asset manager has, for the third time, filed with the Securities and Exchange Commission a bitcoin exchange-traded fund, the company announced earlier this week. It is partnering with blockchain firm SolidX on the fund.
But one market structure expert is calling the fund’s filing “laughable.”
/jlne.ws/2Jn6o3V

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About Author


Bergstrom is chief information officer of John J. Lothian & Co. He edits MarketsWiki and JLN Options.

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