October 28, 2021
SIFMA SmartBrief
News on the capital markets
Morning Bell
The Commerce Department's initial estimate of third-quarter economic growth, due for release today, is expected to show a decline in growth for the first time in over a year, largely because of the Delta coronavirus variant. "Delta is the biggest reason why we have this noticeable deceleration," Moody's Analytics economist Ryan Sweet says, but there is evidence growth began to revive in September as the effect of the variant faded.
Full Story: Reuters (10/28),  The New York Times (10/28),  U.S. News & World Report (10/27) 
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Sustainable food and water - why the current system needs to be transformed
The food and water system must become more resource efficient and sustainable in the face of mounting challenges. Schroders explains what needs to be done and the investment opportunities it brings.
Happening Today
How COP26 will shape ESG and impact investing
Simon Puleston Jones, co-founder and CEO of Climate Solutions, explains how COP26 might influence the flow of capital aimed at tackling the climate crisis. Simon also explains the educational journey taking place around ESG and impact investing.
Industry News
Yields on 10- and 30-year Treasurys have suffered the steepest declines since July amid concerns about how well the economy would manage tapering of asset purchases and interest-rate increases. However, shorter-dated instruments have continued to trade well, with a sale of 5-year Treasurys netting $61 billion.
Full Story: MarketWatch (tiered subscription model) (10/27),  CNBC (10/26) 
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PNC Financial Services Group Chief Economist Gus Faucher expects supply chain bottlenecks to ease, despite a 0.4% month-over-month decline in September for durable goods orders, as manufacturers faced higher material and labor costs. "I expect that supply chain issues will be worked out over the next six months or so," Faucher says. "Demand for manufactured goods remains solid, and business investment will be a driver of economic growth in 2022."
Full Story: The Wall Street Journal (10/27),  MarketWatch (tiered subscription model) (10/27) 
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    Washington Roundup
    President Joe Biden is visiting Democratic lawmakers today on Capitol Hill before heading to Europe for a Group of 20 gathering and a UN climate summit, sources say, after the collapse of negotiations on how to fund his social spending agenda. Sticking points include a "billionaire tax" and paid family leave.
    Full Story: BNN Bloomberg (Canada) (10/28),  The Wall Street Journal (10/28),  Financial Times (subscription required) (10/27),  The Associated Press (10/28) 
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    Entities that expect to use Libor after the benchmark expires at year-end through use of a synthetic Libor, or "zombie Libor," are mistaken, acting Comptroller of the Currency Michael Hsu has said during an event sponsored by the Alternative Reference Rates Committee. "Let me be clear: The federal financial regulators have said no new Libor exposures -- zombie or otherwise -- after Dec. 31, 2021, and we mean it," Hsu said.
    Full Story: Practice Insight (10/27) 
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    Treasury Secretary Janet Yellen has a range of economic priorities she intends to emphasize at a Group of 20 meeting in Rome and a UN climate conference in Glasgow, Scotland. Yellen aims to make the case for the US position on issues including corporate taxation and climate financing, along with strategies to avert pandemics and to ease supply chain disruptions.
    Full Story: Reuters (10/28) 
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    In a hearing that is part of his nomination to become permanent chair of the Commodity Futures Trading Commission, acting Chair Rostin Behnam has testified before the Senate agriculture committee on issues including climate risk to financial markets, voluntary carbon markets and the regulatory environment for digital assets.
    Full Story: The Wall Street Journal (10/27),  Reuters (10/27),  The Block (10/27),  BNN Bloomberg (Canada) (10/27) 
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    Global Update
    The EU has published draft laws that would implement the final part of Basel III to tighten banks' capital requirements beginning in 2025, rather than in 2023, as previously proposed. The EU says that by 2030, the rules would increase mandatory bank capital by less than 9%, but banks say the figure would be much larger.
    Full Story: Reuters (10/28),  Asset Servicing Times (10/27),  Financial Times (subscription required) (10/27),  Independent (Cork, Ireland) (10/28) 
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    UK banks are the most vulnerable among global lenders to an economic crisis in China, the Bank for International Settlements said in a report. At the end of June, UK banks held $257 billion in loans to Chinese borrowers, the BIS said.
    Full Story: This Is Money (UK) (10/27),  Investment Executive (Canada) (10/27) 
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    Wealth Management Report
    Ameriprise Financial's third-quarter report shows pretax adjusted operating earnings of $459 million for its advice and wealth-management business, a 43% rise from the same quarter last year. "The substantial organic growth was driven primarily by our advisor base with deeper client relationships from existing clients, as well as increased new client acquisition," the company said.
    Full Story: Financial Advisor IQ (10/27),  WealthManagement (10/27) 
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    Data of the Day
    New-home sales surged 14% in September to a seasonally adjusted annual rate of 800,000 units, according to the Commerce Department. The total is the largest in six months, although the cost of a new home increased in September by 18.7% to a median price of $408,800.
    Full Story: CNBC (10/27) 
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    SIFMA News
    SIFMA's Equity Market Structure Conference brings together sell-side, buy-side, retail, exchange and regulatory experts to examine today's equity markets and the evolving regulatory framework that guides them. Join our keynote speaker, Securities and Exchange Commission member Elad Roisman and market-structure experts on Tuesday, Nov. 16 to discuss recommendations and actionable changes to improve the efficiency and resiliency of US equity market structure. The conference will be held in NYC. Virtual option also available. Register today!
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    In this episode of our Wealth Management Leadership podcast series, SIFMA President and CEO Kenneth E. Bentsen, Jr. sits down with Ken Cella, principal of the Client Strategies Group at Edward Jones for a conversation on how the pandemic has shaped the way advisors and clients approach the "New Retirement" and discuss its four pillars of health, family, purpose and finances. We also explore how the pandemic led investors to focus more on life's priorities, its impact on retirement-savings trends and how it prompted first-time legacy planning conversations for 44.5 million Americans.
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    Winter had stretched Long chill fingers into the brown, streaming hair Of fleeing October.
    Alice Dunbar Nelson,
    poet, journalist, political activist
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