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24 October 2012
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  • EU leaders say euro not out of political woods
    Although worries as evidenced in the bond markets have eased in the euro crisis, political hurdles remain that could still endanger the single currency, warned EU President Herman Van Rompuy and Jose Barroso, president of the European Commission. "Some of these issues are extremely difficult from a political and technical point of view, but the decisions should be as urgent as possible," Barroso said. Bloomberg Businessweek (23 Oct.) LinkedInFacebookTwitterEmail this Story
  • Exchanges face backlash over certain trading tools
    Mutual funds and regulators are raising concerns about trading tools offered by NYSE Euronext and Nasdaq OMX Group. Some say a particular trading-order type gives certain market participants an advantage. NYSE Euronext is planning to request that it be allowed to alter the order type, exchange officials said. Nasdaq OMX is also considering changes to an automated trading tool proposal following regulators' concerns, sources said. The Wall Street Journal (23 Oct.) LinkedInFacebookTwitterEmail this Story
Morningstar Direct – The New Efficient Frontier
Normal distributions underestimate risk. Click here to read our article on how tail-risk optimization performed in a back-test of the 2008 financial crisis, as published in the Financial Analysts Journal.
  Market Activity 
 
  • Asian-Pacific markets' fall is softened by data from China
    Most Asian-Pacific markets declined or traded flat Wednesday, some moving off early-session lows after data showed that manufacturing activity in China is recovering. Japan's Nikkei 225 lost 0.7%. South Korea's Kospi slid 0.6%. Australia's S&P/ASX 200 gave up 0.8%. Hong Kong's Hang Seng Index edged down 0.2%. China's Shanghai Composite was flat. India's markets were closed for a holiday. MarketWatch (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • Facebook reports increased revenue from mobile ads, shares jump
    Facebook's share price rose 10% in after-hours trading after the company announced that revenue from mobile advertising are picking up quickly. The social networking firm reported adjusted earnings, which exclude one-time charges, of 12 cents a share, slightly better than the analysts' consensus of 11 cents a share. Wired.com (23 Oct.), Forbes (23 Oct.) LinkedInFacebookTwitterEmail this Story
Sector SPDRs carve the S&P 500 into nine sector exchange-traded funds (ETFs) that conveniently, efficiently, and affordably provide sector exposure while giving investors the unique ability to customize the S&P 500 to meet specific investment objectives.
See sectorspdrs.com for complete details.
  Economics 
  • Home loans will become more difficult to get, experts say
    People who want to buy homes in the U.S. will find it more difficult to qualify for mortgages next year after several rules take effect, mortgage bankers and Realtors said. There is a danger that the rules, which will take effect at the same time, will conflict or overlap, creating a "perfect storm" of regulation, said Maurice "Moe" Veissi, president of the National Association of Realtors. Bloomberg (24 Oct.) LinkedInFacebookTwitterEmail this Story
  • S&P 500 firms' cash stockpiles approach record $1.5T
    Standard & Poor's 500 companies, reluctant to make long-term investments or hire because of economic uncertainty, are stockpiling cash at record rates. Overall, cash balances are up 14% and on track to reach an all-time high of $1.5 trillion. CNBC (23 Oct.) LinkedInFacebookTwitterEmail this Story
  • Spain remains stuck in recession as economy contracts 0.4%
    Spain's central bank said its preliminary figures show the nation's economy contracted 0.4% in the third quarter and declined 1.7% from where it stood a year ago. Household and government spending fell during the quarter, the bank said. The unemployment rate in Spain is now about 25%, the same as in Greece. CNNMoney (23 Oct.) LinkedInFacebookTwitterEmail this Story
  • Sub-Saharan Africa lures rich world's money and skilled workers
    With its rapidly growing and increasingly affluent population, sub-Saharan Africa is attracting the rich world's money and its managers who are searching for an alternative to the slow growth of the industrialized nations, according to The Economist. "There is much talk of where in Africa factories can be built and bonds bought," the magazine noted. "But equally high on the agenda is hunting talent from all parts of the world, Africa included." The Economist (20 Oct.) LinkedInFacebookTwitterEmail this Story
  • Financial advisers' clients use Facebook, research shows
    Financial advisers' favorite social media platform is LinkedIn, but if advisers want to communicate with their defined contribution-plan clients, they'll find them on Facebook, according to research by Spectrem Group. Nearly three-quarters of plan participants use Facebook and the age of the user has very little impact on its popularity, the research found. AdvisorOne (22 Oct.) LinkedInFacebookTwitterEmail this Story
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The Advances in Asset Allocation Seminar on 4-6 December in London is an intensive three-day course that will provide participants with practical tools to improve asset allocation and risk management processes and develop new products.
CFA Institute members receive a 25% discount on registration.
 

  Geopolitical/Regulatory 
  • Long-sought global accounting standards in danger as boards split
    A split between the International Accounting Standards Board and the U.S. Financial Accounting Standards Board threatens to derail the drive for common standards a decade in the making. The two sides divide over a number of issues, with one of the key sticking points being how to force banks into earlier acknowledgment of losses on bad loans. Reuters (23 Oct.) LinkedInFacebookTwitterEmail this Story
  • U.K. adviser recommends price dampers over restrictions on HFT
    Pan-European circuit breakers to damp price swings are preferable to tighter restrictions pertaining to the timing of high-frequency trading, says John Beddington, the U.K.'s chief scientific adviser. "The commonly held negative perceptions surrounding high-frequency trading are not supported by the available evidence, but policymakers' concerns are justified about the effect the practice may have in some specific circumstances," Beddington said. He noted that a two-year study across 20 countries found no direct evidence that quicker trading increased volatility or market abuse. Bloomberg (22 Oct.), Financial Times (tiered subscription model) (23 Oct.), Financial News Online (U.K.) (subscription required) (23 Oct.) LinkedInFacebookTwitterEmail this Story
  • Banks take a sharper look at commodities desks amid new rules
    Impending interpretation and implementation of the Volcker rule and other factors are causing some Wall Street investment banks to reconsider their commodities-trading businesses, with some thinking about selling all or part of their units. Given the need of trading desks to borrow extensively, lower bond ratings and higher capital requirements are making the business less profitable. The Wall Street Journal (23 Oct.) LinkedInFacebookTwitterEmail this Story
  Financial Products 
  • ETC seeks approval for ETF focusing on earnings quality
    Exchange Traded Concepts filed a registration statement with the Securities and Exchange Commission for an exchange-traded fund that would invest in large-cap stocks based upon an analysis of the quality of their earnings. If approved, the Forensic Accounting ETF would use forensic accounting techniques to avoid companies whose financial statements indicate there is a problem with the quality of their earnings or the accuracy of their financial reporting. IndexUniverse.com (22 Oct.) LinkedInFacebookTwitterEmail this Story
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