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December 21, 2012

Daily newsletter from NYSSA for investment professionals

Top Story

NYSE Euronext agrees to be bought by ICE
IntercontinentalExchange announced that it is acquiring NYSE Euronext for $33.12 per share. The combined company will operate dual headquarters in Atlanta and New York and maintain the iconic NYSE building in Manhattan. "The acquisition combines two leading exchange groups to create a premier global exchange operator diversified across markets including agricultural and energy commodities, credit derivatives, equities and equity derivatives, foreign exchange and interest rates. With leading clearing capabilities, the combined company will be well positioned to deliver efficiencies while serving customer demand for clearing and risk management globally," ICE said in a news release. CNNMoney (12/20), Financial Times (tiered subscription model) (12/20), The Wall Street Journal (12/20)

NYSE sale puts pressure on CME to expand
IntercontinentalExchange's acquisition of NYSE Euronext may force CME Group, the biggest futures exchange operator in the world, to make an acquisition to meet the competitive challenge, according to Aite Group. CME made an unsuccessful attempt to buy the London Metal Exchange this year. Bloomberg (12/20), Chicago Sun-Times (12/21), Chicago Tribune (tiered subscription model) (12/21)

Industry Update

Cheap ETFs outperform star hedge fund managers
The mediocre performance of hedge funds demonstrates that most investors would benefit more from keeping an eye on costs than putting their money in the hands of star hedge fund managers, according to The Economist. "The best way for investors to play the odds is to choose low-cost ETFs or trackers and diversify geographically and across asset classes," the magazine notes. The Economist (12/22)

Boehner gives up on his "fiscal cliff" plan
House Speaker John Boehner, R-Ohio, was forced to abandon his "fiscal cliff" proposal aimed at extracting more concessions from President Barack Obama when it became clear there wasn't enough support to pass the measure in the Republican-controlled House of Representatives. Boehner's inability to produce enough votes for his own plan raises the level of uncertainty about whether Republican leaders and Obama can reach a deal before the year ends. Reuters (12/21), The Washington Post (12/20), USA Today (12/21)

Repo market avoids new regulations
The Federal Reserve Bank of New York said JPMorgan Chase and Bank of New York Mellon made the changes necessary to reduce risk and allow the repurchase market to function smoothly. The two banks needed to reduce their exposure in the market for which they serve as clearing agents. The Wall Street Journal (12/21)

New York Focus

Booker's U.S. Senate run is good news for Gov. Christie
Newark, N.J., Mayor Cory Booker's decision to run for the U.S. Senate rather than challenge Chris Christie for the governor's job is good news for Christie. Although Democrats have several other potentially strong candidates for governor, none have Booker's national profile, fundraising ability or the name recognition that comes with being Newark's mayor. The Washington Post/The Fix blog (12/20), New Jersey Online/The Star-Ledger (12/20)

Gov. Cuomo will push for tougher gun control laws in N.Y.
New York Gov. Andrew Cuomo said his 2013 legislative agenda will include a package of gun-control laws. He said there should be tougher restrictions on semiautomatic rifles. "I don't think legitimate sportsmen are going to say, I need an assault weapon to go hunting," Cuomo said on an Albany radio show. The Wall Street Journal (12/20)

Demolition of NYC homes damaged by Sandy begins
The demolition of homes in New York City that were seriously damaged by superstorm Sandy began Thursday with a house on Staten Island. The U.S. Army Corps of Engineers expects to remove destroyed homes and debris from 400 properties throughout the city in the next few weeks. The New York Times (tiered subscription model) (12/20)

People & Personalities

Khuzami reportedly will step down as SEC enforcement chief
Robert Khuzami, head of the Security and Exchange Commission's enforcement unit since 2009, is planning to leave the agency as soon as January, sources said. Under his watch, the unit's power was expanded, but he was also criticized for reaching high-profile settlements with Goldman Sachs Group, Citigroup and JPMorgan Chase. Bloomberg (12/20), The Wall Street Journal (12/20)

On The Economy

U.S. beat forecasts and grew 3.1% in Q3
According to revised data, U.S. gross domestic product grew at a 3.1% annual rate in the third quarter. That beat an economist survey estimate of 2.8% as well as the Commerce Department's previous estimate of 2.7%. Bloomberg Businessweek (12/20), Reuters (12/20), Financial Times (tiered subscription model) (12/20)

Financial Products

ALPS launches 4 index ETFs tied to momentum
ALPS rolled out four exchange-traded funds tracking indexes that are designed to boost yields by using momentum-focused strategies. The Risk-Adjusted Return U.S. Large Cap Index ETF, the Momentum Builder Asia ex-Japan Equities and U.S. Treasuries Index ETF, the Momentum Builder Multi-Asset Index ETF and the Momentum Builder Growth Markets Equities and U.S. Treasuries Index ETF trade on NYSE Arca. IndexUniverse.com (12/20)

SmartQuote

How we spend our days is, of course, how we spend our lives."

--Annie Dillard,
American author

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