Tag Archives: Markets coverage
by Chris Roush
Tim Annett, the acting chief of The Wall Street Journal‘s markets coverage, sent out the following announcement on Tuesday morning:
It’s not often that we get a chance to bring someone back for an encore. But I’m delighted to announce that Michael Driscoll will be rejoining the Markets desk starting today after a successful stint running stock-market coverage for Dow Jones Newswires.
Michael is a careful and shrewd editor, a terrific headline writer and an expert on Journal style. Since leaving the Markets desk last year, he’s steered the stock-market team at the wires through the rains of Sandy and the storm of a new all-time high in the DJIA, and helped break news on a number of fronts. His experience on the wires will be a tremendous asset to the desk as we continue to integrate the newsroom.
In his second tour with us, Michael will have a special focus on coordinating the desk’s handling of big ongoing news stories (think the Galleon case or stock-market milestones). He’ll work closely with our real-time tandem of Lora Western and Bradley Davis and the rest of our team to tie together online and print presentation of our section’s biggest projects.
Please join me in congratulating Michael and in welcoming him back to the sixth floor.
by Chris Roush
Yahoo Finance and CNBC are premiering the first two episodes of a new show called “Big Data Download” on Wednesday.
The show is hosted by CNBC’s Courtney Reagan and will regularly feature Yahoo Finance’s editor-in-chief Aaron Task, senior columnist Michael Santoli and co-host of “The Daily Ticker” Lauren Lyster.
“Big Data Download” is a daily digital program that taps into the big data revolution to deliver information to everyday investors and business decision makers. The show, which will air twice each day, will draw upon sources including Yahoo search data, social sentiment and investing algorithms created exclusively for this program from the Yahoo Labs team.
“Big Data Download” airs Monday through Friday, with original episodes at 11 a.m. and 2 p.m. ET.
The inaugural episode of “Big Data Download” examines whether the housing market is really in recovery by looking at both housing stocks and Yahoo! Search data. In the second episode, “Big Data Download” drills into gas prices. “Big Data Download” explores oil, gas, distillate inventory numbers to shed light on where prices should be and which companies will get a lift when the price goes up.
by Chris Roush
CNNMoney.com launched a portfolio option on Monday.
Powered by SigFig, Portfolio gives users a way to track their investments in one place with real-time market data.
CNNMoney Portfolio blends a sleek design and simple user interface with a wealth of financial data from hundreds of sources. The launch is part of CNNMoney’s ongoing effort to meet the demands of a growing audience for real-time utility paired with financial news.
In January, CNNMoney launched a cost of living comparison calculator and will continue to roll out new utility-based calculators in the coming months in areas such as retirement planning and investment rate of return.
The portfolio option allows users to sync and track your 401K, IRA and brokerage accounts in one place. The portfolio syncs with more than 60 brokerages.
by Chris Roush
Duncan Mavin, the Asia editor for the Heard on the Street section of the Wall Street Journal, sent out the following staff announcement:
I am delighted to announce two additions to the Heard on the Street team in Asia. Abheek Bhattacharya joins from The Wall Street Journal’s editorial page. Aaron Back is moving to the Heard team from his current post as deputy China bureau chief for Dow Jones Newswires in Beijing. Both Abheek and Aaron will be based in Hong Kong.
Abheek was previously a writer for The Journal’s editorial page in Hong Kong, playing a significant role in the section’s insightful coverage of Asian economics and politics. His smart and sometimes provocative work has covered a broad swath of topics including Indian telecoms, Indonesian banking and Chinese macroeconomics. Before joining The Journal, Abheek was based in Mumbai with Mint, where he excelled with editorials on economics and finance. A native of Mumbai, he holds a Bachelor’s degree from Yale University, where he studied intellectual history.
Aaron Back joined Dow Jones Newswires in Singapore, writing on the city state’s banks, property developers and financial markets. He transferred to the Beijing bureau, where he initially turned his keen eye for a great story to China’s burgeoning technology sector, before moving on to lead coverage of the country’s macro-economy and monetary policy. As deputy China bureau chief since 2011, his contribution has been invaluable to The Wall Street Journal/Dow Jones Newswires in China. A native of Denver, Colorado, Aaron studied Economics and East Asian Studies at Johns Hopkins University. He has also studied mandarin Chinese at universities in Taipei and Nanjing.
Please join me in wishing Abheek and Aaron success in their new roles.
Less than a year after the infamous JPMorgan Chase & Co.’s “London Whale” trading scandal that led to a $6.2 billion loss, IR Magazine gave an award to Jamie Dimon, the company’s chief executive officer, for having the best investor relations by a CEO or chairman in the large market capitalization category.
Though perhaps IR Magazine is giving Dimon the award for the way he handled investor relations following the scandal, in April 2012 Dimon described the would-be sweeping trading scandal as a small event that had been exaggerated out of proportion on JPMorgan’s first-quarter earnings conference call.
In response to a question regarding London Whale Bruno Iksil’s large position in credit-default swaps in corporate bonds, Dimon said on the call:
“It’s a complete tempest in a teapot. Every bank has a major portfolio. In those portfolios you make investments that you that you think are wise, the offset your exposures. Obviously it’s a big portfolio, we’re a large company, and we try to run it – it’s sophisticated, obviously complex things, but at the end of the day, that’s our job is to invest that portfolio wisely and intelligently over a long period of time to earn income and to offset other exposures we have.”
This misleading statement along with the lack of transparency provided to investors about trading practices raises eyebrows about IR Magazine’s decision to award Dimon the honor of having the best investor relations as a CEO.
IR Magazine’s Methodology
On its website, IR Magazine says that it conducts in-depth research to identify the best corporate investor relations teams. The magazine canvassed opinions through electronic surveys and telephone interviews of more than 800 sell-side analysts, buy-side analysts and portfolio managers across the U.S. to determine the winners.
Other nominees in Dimon’s category “Best IR by a CEO or chairman” included Covidien’s José Almeida, Danaher’s Lawrence Culp and Coca-Cola Co.’s Muhtar Kent.
“But fundamentally good IR is still a matter of building trust with the investment community – which is what all our award winners and nominees – as well as the IR Magazine US Top 100 – have achieved,” said IR Magazine’s CEO and founding editor Janet Dignan on its website.
Lack of Transparency
In a New York Times Dealbook article last week about the hearing by the Senate’s Permanent Subcommittee on Investigations that summoned Dimon and other current and former JPMorgan officials as it continues to formulate reports, John C. Liu, the New York City comptroller, raised concern on the way Dimon misinformed investors.
“It’s clear from the Senate report and Friday’s hearing that senior executives not only misinformed investors and regulators about the excessive risks the bank was taking, but also withheld this information from their own board. Mr. Dimon’s failure on this score come from the hubris of having too much power placed in his hands.”
Liu has invested in $500 million worth of JPMorgan shares on behalf of public pension funds. Liu is hoping to bolster support for a shareholder proposal that would split JPMorgan’s CEO and chairman roles, The New York Times reported.
Yet on the other side, Joe Evangelisti, a bank spokesman, said:
“Our management always said what they believed to be true at the time. In hindsight, we discovered some of the information they had was wrong…Jamie apologized and took responsibility on live television, multiple analyst calls, and in testimony before Congress and the Senate.”
Additionally, JPMorgan’s board have remained largely in support of its CEO and the bank has had its most profitable year ever and its stock rose more than 20 percent in the last four months.
“And above all the din and arguments concerning risky banking practices is the voice of money — if you’re making it, then you’re fine with how it’s being made,” wrote the International Business Times on Monday.
Yet some in the business media have been critical of Dimon and JPMorgan’s actions. Bloomberg News’ Jonathan Weil wrote an article in January about the omissions in JPMorgan’s report about the London Whale trading losses.
“The report also included this bizarre disclaimer: “This report sets out the facts that the task force believes are most relevant to understanding the causes of the losses. It reflects the task force’s view of the facts. Others (including regulators conducting their own investigations) may have a different view of the facts, or may focus on facts not described in this report, and may also draw different conclusions regarding the facts and issues.” In other words, we haven’t been told the whole story.”
What do you think? Did Dimon deserve to receive IR Magazine’s award as ”Best IR by a CEO or chairman” for the way he handled investor relations during and after the London Whale crisis, or does this seem like a suspicious action of the business media cozying up to the CEO of the most powerful banks in the world?
by Chris Roush
Daniel Goodman and Kamelia Angelova of Business Insider write about how the New York Stock Exchange has become ground zero for financial news coverage.
Goodman and Angelova write, “Then in 1995 Maria Bartiromo from CNBC became the first reporter to go live to TV from the floor of the NYSE, marking the beginning of a new era as reporters and traders began to interact regularly during the day and on the news.
“In the past couple years electronic trading has reduced the need for physical traders on the floor, and newscasters have taken over the floor of the Exchange.
“CNBC has its own elaborate set in the place where one of the trading posts stood, and over 30 broadcasters report live from the floor every day, not to mention the many smaller outlets that also cover the Exchange and utilize its multimedia center.
“The evolution of media and technology has transformed the NYSE into the biggest stage for business news. We spoke with journalists on the floor and the people behind the NYSE Multimedia Center about how media reporting from the floor has changed over time and what lies ahead.”
Read more here.
by Chris Roush
Francesco Guerrera, the money & investing editor for The Wall Street Journal, sent out the following announcement on Wednesday:
The Wall Street Journal is seeking an energetic editor to lead Money & Investing’s investing team. The Journal’s investing editor spearheads some of M&I core areas of coverage, from hedge funds and stock exchanges to insurance companies and public pensions.
This is an exciting time to cover these beats, and to join M&I. The coming integration of Dow Jones Newswires will only add to our reporting firepower, giving the section’s editors more resources to both deepen and broaden our coverage of the markets and institutions that matter most to our readers across all our real-time and print platforms.
The right candidate must demonstrate keen news judgment, as well as the ability to handle real-time deadlines and, when major stories emerge, marshal our reporting teams to produce the best and most comprehensive coverage in the financial-news business. Finally, he or she must possess a deft and careful editing touch on features, investigative pieces and other long-form stories worthy of The Journal’s Page One.
The job is based in New York. Interested candidates should contact Francesco Guerrera, Rick Brooks, Emma Moody or our outgoing investing editor, Justin Baer.
by Liz Hester
Beware where you buy shares in initial public offerings, since apparently those can be faked just like lottery tickets or anything else.
Federal prosecutors filed charges Tuesday against a Florida man for trying to sell fake Facebook shares.
Here’s the story from Wall Street Journal reporter Chad Bray:
A Florida financier who once served as Oregon’s state Republican chairman has been arrested in an alleged multimillion-dollar scheme to market fake shares of Facebook Inc. and other social-media companies before they went public, federal authorities said Tuesday.
Federal prosecutors in Manhattan alleged that Craig Berkman, 71 years old, promised investors in two separate schemes that he had access to shares of Facebook, well before the company’s closely watched initial public offering last year. However, he never held the shares and used millions of dollars he received from investors for his own benefit, prosecutors said.
Mr. Berkman allegedly raised $8 million from investors as a result of his claims to having access to Facebook shares, prosecutors said.
“Craig Berkman seized on the interest in a highly coveted investment opportunity to swindle investors out of millions,” said Preet Bharara, the U.S. attorney in Manhattan.
A lawyer for Mr. Berkman didn’t immediately return a phone call seeking comment Tuesday.
Reuters added these details to the story:
Craig Berkman, 71, falsely told investors he had access to scarce pre-IPO shares of Facebook and other social media companies such as LinkedIn Corp, Groupon Inc and Zynga Inc, the U.S. Securities and Exchange Commission said in a statement.
But instead of buying shares for investors as promised, Berkman made “Ponzi-like” payments to earlier investors and funded personal expenses, including costs in a bankruptcy case, according to the SEC, which filed a civil case.
The Manhattan U.S. Attorney’s Office charged Berkman with two counts of securities fraud and two counts of wire fraud. Each count carries a maximum of 20 years in prison.
In one allegation, more than 50 investors sent $4.6 million into a bank account controlled by a Berkman entity called Ventures Trust II, according to the complaint filed by the Manhattan U.S. Attorney’s Office.
Berkman told investors the funds would be used to buy pre-IPO shares of Facebook, but instead the “vast majority” was transferred to other accounts Berkman controlled for his own personal benefit, according to the complaint.
Berkman has long been active in Oregon politics and served for a time as the head of the state’s Republican Party, according to press accounts. He lost in the Republican primary for governor in 1994, and he explored a bid for governor in the 2002 race, according to The Oregonian.
The SEC’s order details what the agency called a “recidivist history” for Berkman.
The Oregon Division of Finance and Securities issued a cease-and-desist order and a $50,000 fine against Berkman in 2001 for offering and selling convertible promissory notes without a brokerage license, according to the SEC statement.
In 2008, an Oregon jury found Berkman liable in a private action for breach of fiduciary duty, conversion of investor funds and misrepresentation to investors related to his involvement with a purported venture capital firm, according to the SEC.
Berkman reached a settlement with the firm, called Synectic Ventures, after it filed an involuntary Chapter 7 bankruptcy petition against him in 2009 for debts he didn’t pay related an earlier judgment against him for $28 million, according to the SEC.
Rather than use his own money to pay the claims, Berkman spent more than $5.4 million from investors in his pre-IPO offerings to make payments in the bankruptcy settlement, according to the SEC.
I guess there is something to be said for buying stock through a broker affiliated with a bank. At least you know your money isn’t going to pay back old debts. And you’ll actually get the stock shares instead of nothing.
by Liz Hester
The markets are going through another revolution in the form of wash trades, which can be used to manipulate the markets.
The Wall Street Journal had this story:
U.S. regulators are investigating whether high-frequency traders are routinely distorting stock and futures markets by illegally acting as buyer and seller in the same transactions, according to people familiar with the probes.
Such transactions, known as wash trades, are banned by U.S. law because they can feed false information into the market and be used to manipulate prices. Intentionally taking both sides of a trade can minimize financial risk for the trading firm while potentially creating a false impression of higher volume in the market.
The Commodity Futures Trading Commission is focused on suspected wash trades by high-speed firms in futures contracts tied to the value of crude oil, precious metals, agricultural commodities and the Standard & Poor’s 500-stock index, among other underlying instruments, the people said.
The agency is looking at potential wash trades by multiple high-speed firms, although it isn’t known which ones investigators are scrutinizing. Firms found guilty of intentionally distorting the market through wash trades could face hefty fines.
Investigators also are looking at the two primary exchange operators that handle such trades, CME Group Inc. and IntercontinentalExchange Inc., the Atlanta company that in December agreed to purchase NYSE Euronext for $8.2 billion, the people said. Regulators are concerned the exchanges’ systems aren’t sophisticated enough to flag or stop wash trades, the people said.
“We actively enforce rules prohibiting wash trading, and we’re in the process of developing technology to prevent wash trades as prohibited by CME and CFTC at the trading-engine level,” a CME spokeswoman said. CME plans to introduce new technology the middle of this year, she said.
The problem with these trades is that they manipulate the prices for regular investors. So, there’s really little chance that the markets will be fair. Here’s more:
The investigations highlight how regulators continue to struggle with today’s complex high-speed markets and the ties between exchanges and their valued high-frequency customers. Securities and Exchange Commission investigators have been probing whether stock exchanges have provided certain advantages to sophisticated firms that allow them to trade at the expense of regular investors.
Exchanges say such advantages allow the firms to trade aggressively and provide better prices for regular investors who are trying to buy or sell.
Regulators also have pressed exchanges to improve their oversight in the wake of a flurry of computer-driven glitches last year, including the debacle that caused Knight Capital Group to suffer losses of more than $450 million and the flubbed Facebook Inc. public offering by Nasdaq OMX Group Inc.
“High Frequency Trading-Controlling the Risks” was the first agenda item in a nonpublic meeting of CFTC commissioners and international regulators last week at the closely watched Futures Industry Association conference in Florida, a copy of the meeting agenda reviewed by The Wall Street Journal shows.
European and U.S regulators questioned industry representatives on whether high-frequency traders hurt or helped the markets, people at the meeting said.
With wash trades, one difficulty regulators face is proving the suspect trading is intentional, a standard required by many securities and commodities laws. In today’s fast-moving markets, some firms say it is relatively easy for their buy and sell orders to cross by mistake.
But the scale of the suspicious trading activity is so large that it appears to some market watchdogs to be intentional, said people familiar with the matter. Futures-trading data from 2012 being scrutinized by CFTC examiners show that often, several hundred thousand potential wash trades occur a day on futures exchanges, the people said. Regulators have zeroed in on CME, where the majority of the potential wash trades have occurred, the people said.
It’s just another layer that individual investors have to navigate before making money. More importantly, at least the regulators are finally on top of another market issue. Let the reviews begin!
by Liz Hester
The Wall Street Journal had an interesting story about Fidelity and exchange traded fund fees on Thursday. Many ETFs are touted as a way for individual investors to gain exposure to various asset classes.
But according to the WSJ, the fees may make it harder for Fidelity to capture market share:
Some financial advisers said they would stop using Fidelity Investments’ trading platform to buy certain exchange-traded funds because of high fees that kick in when investors sell.
Fidelity on Wednesday announced it would begin offering 65 ETFs from BlackRock Inc.’s iShares unit without charging customers a trading commission. The deal expands a previous agreement involving 30 commission-free ETFs.
But the Boston money manager is tacking on an additional fee of $7.95 a trade to investors who sell the ETFs within 30 days and to financial advisers who sell within 60 days.
Advisers also complained that Fidelity replaced 10 of the commission-free iShares ETFs on its previous menu. Nine of the new ETFs have lower trading volumes, suggesting they are less popular with investors.
The episode is another blow for Fidelity, which has missed out on the ETF boom of the past several years. Investors have favored stock ETFs over actively managed stock-mutual funds—Fidelity’s specialty—since 2006. Last year, investors poured $54.8 billion into stock ETFs and yanked $131.5 billion from actively managed U.S. stock funds, according to investment-research firm Morningstar Inc.
While rivals Vanguard Group Inc. and BlackRock have built big ETF businesses, Fidelity has barely made a dent.
While Fidelity continues to lose ground in this space, some rivals are finding it lucrative, the WSJ said.
Fidelity has much riding on the iShares deal. Investors pulled $24.4 billion from Fidelity’s stock funds in 2012, and its operating revenue dropped 1% to $12.6 billion.
By becoming a partner with BlackRock, the largest ETF provider in the U.S., Fidelity hopes to gain exposure to the fast-growing ETF market.
But a backlash from financial advisers could derail those plans. The additional fees “could alienate their core market,” said Scott Freeze, president of Street One Financial, an ETF trading and advisory firm.
Advisers said they are worried the redemption fee will hit hardest investors with less money. “If you’ve got a million-dollar account, then it’s not going to be huge,” Mr. Tuttle said. “If you have a $2,000 account, that’s massive.”
Rivals such as Vanguard, Charles Schwab Corp. and E*Trade Financial Corp. don’t charge a redemption fee on commission-free ETFs. TD Ameritrade Holding Corp. charges $19.99 a trade if an investor or financial adviser sells within 30 days.
Stories like these are important so investors can evaluate where their money is going to make sure they’re getting the best deal possible. The news follows an announcement about Fidelity ramping up its offerings, according to the Boston Globe:
Fidelity Investments is ramping up its small presence in the growing business of exchange-traded funds by expanding a three-year partnership with BlackRock Inc.’s iShares unit, the largest ETF provider.
BlackRock, in turn, will be able to sell its iShares ETFs to a much broader range of investors, including Fidelity customers and their industry-leading 18.5 million brokerage accounts. BlackRock does not have anything to rival that client base.
Boston-based Fidelity and New York-based BlackRock announced the partnership Wednesday. The companies agreed in early 2010 to cooperate on a smaller scale in a three-year deal that expired. Under it, Fidelity offered its brokerage clients commission-free online trades on 30 iShares ETFs. The commission-free total expands to 65 under the new pact. With $250 billion in assets, those ETFs invest in US and foreign stocks and bonds, as well as commodities.
Fidelity also will create new options for its customers to build investment portfolios using iShares ETFs. And BlackRock agreed to help Fidelity develop new funds that passively track narrow segments of the market, such as stocks of companies in specific industries.
Either way, Fidelity should examine its offerings to see if it can actually capture the market share it is looking to gain.