Foreign private holdings of US stocks totaled a record $7.7 trillion in July, Treasury Department data shows, and these holdings are seen as a key factor in a continued rise of the market. Numerous economic factors are making US stocks more attractive than global counterparts, and JPMorgan Asset Management strategist Hannah Anderson says, "You're seeing a real divergence between growth prospects in the US equity market and the rest of the world."
The demand for fixed-income products is high because of factors such as an economic slowdown worldwide, the aging population and muted inflation in the US, said experts at an industry event. They offered suggestions for building an effective fixed-income strategy, with active management and the use of Treasury Inflation-Protected Securities among their recommendations.
Hedge funds' day-to-day investment strategies and operations will soon include artificial intelligence and machine learning, panelists said at an industry conference. AI is becoming a necessity for analyzing data, anticipating correction in supply and demand imbalance, and predicting market movement for tactical asset allocation.
State and local pension plans had a median 47.3% of assets invested in US stocks at the end of the third quarter, according to Wilshire Trust Universe Comparison Service, an increase from 44.1% in Q3 of 2018 and the highest level since 2007. A need to compensate for shortfalls in numerous pension funds is cited as the main driver.
The 2019 total of mergers and acquisitions involving registered investment advisors is on pace to set a record, said a panel of experts at an industry event. The biggest factors behind the M&A surge include the need for scale, improvements in technology and stronger deal terms, the experts said.
Wealth-X research shows the number of US households with net worth of $30 million or more stands at 80,000, and that figure is on track to increase about 30% in five years. Impact investing and direct investments are big opportunities in the family office market, while challenges include scaling and competition for clients and talent, said experts at an industry event.
The Bank for International Settlements says over-the-counter derivatives notional amounts increased 18% during the first half of 2019 to a five-year high of $640 trillion. Interest-rate derivatives made up $524 trillion, or 82%, of the total, while foreign exchange derivatives accounted for $99 trillion.
Divergence between state and federal law on the sale and use of marijuana means broker-dealers must be cautious when dealing with that sector to avoid compliance issues. Oppenheimer has restricted dealings with the marijuana sector, Chief Compliance Officer Douglas Siegel said at the SIFMA Compliance and Legal Seminar.
A proposal from the Securities and Exchange Commission to change the Advertising Rule for registered investment advisors would allow use of third-party ratings, testimonials and endorsements to attract business. The proposal has a 60-day comment period.
The Commodity Futures Trading Commission has voted 4-1 to let Euronext Amsterdam, Euronext Paris and Germany's European Energy Exchange do business with US derivatives traders. "I believe approval of the applications is a sign of our good faith and continuing commitment to negotiate with the European Commission and [the European Securities and Markets Authority] about significant issues, particularly the implementation of the European Market Infrastructure Regulation," CFTC Chairman Heath Tarbert says.
The Commodity Futures Trading Commission and Department of Justice are increasingly collaborating on fraud and market manipulation enforcement actions by combining their data analysis tools to target suspicious activity. The DOJ also brings the newly employed tool of using the Racketeering-Influenced Corrupt Organizations (RICO) Act into CFTC spoofing cases.
SIFMA's Annual Meeting gathers the most influential voices shaping today's capital markets. Our 50-plus featured speakers include SEC Chairman Jay Clayton; Edward Jones Managing Partner Penny Pennington; Mobius Capital Partners Founding Partner, Mark Mobius; Sen. Tim Scott; CFTC Commissioner Dawn Stump; and New York Fed President John Williams. Find out what is top of mind for market participants: Register today to join us on Nov. 18 to 19 at the JW Marriott in Washington, D.C.
With the financial industry now leading the S&P 500 index in terms of overall workforce diversity, financial firms are making progress on diversity and inclusion initiatives. Read our latest blog to discover why this progress is so significant and what still needs to be accomplished, from a D&I perspective.