Perhaps one reason panglossian market conditions can persist in the age of Twitter and Instagram is that omnipresent social media allow us to edit out anything that vaguely threatens our preferred mindset about stocks.
Momentum investing can seem like an insult to your intelligence. Why should prices go up just because they have gone up in the past? But there is plenty of evidence that momentum investing works in the medium term.
The momentum effect in investing refers to the tendency of stocks and other financial assets to show persistence in their relative performance. Despite convincing data, momentum hasn’t been widely embraced as an investment strategy.
LCH says it has not seen a shift in euro-denominated clearing to the Continent, despite predictions the move would occur after Brexit. But EuroCCP CEO Cecile Nagel says, "The direction of travel is clear: There is going to be ongoing effort to drive more activity into Continental Europe." The Trade (UK) (20 Feb.)
The Australian Prudential Regulation Authority is increasing surveillance of whether financial institutions are ready to deal with risk posed by climate change by stress-testing climate resilience. Meanwhile, the Reserve Bank of Australia is trying to understand the "full dimensionality" of the economic impact from climate change. BNN Bloomberg (Canada) (20 Feb.)
A study by Capco shows banks, custodians and buy-side firms need to find $97 billion in untapped assets to comply with EU and US regulatory requirements. These requirements have increased in recent years, and "while firms still need to focus on efficiencies and optimization, they will also need to tap previously neglected or unrecognized pools of collateral," Capco partner James Arnett says. The Trade (UK) (20 Feb.)
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