- — Photo Courtesy of cnbc.com —
According to a Bloomberg Global Survey, the economy is in its best shape in 18 months with China’s economy improving and the U.S. looking to avoid the fiscal cliff driving optimism and stock markets up globally.
Two thirds surveyed described the global economy as either stable or improving with Investors selecting stocks and the equity market as the first choice of investments with real estate and the housing market and second for investment opportunities.
The U.S. came out on top for the eighth straight quarter when investors were asked which where they saw opportunities for the next year with China coming in as second to the U.S. and Europe as the worst place for investing. China was fourth in September according to Bloomberg survey of subscriber traders, investors and analysts.
“U.S. companies have better profit potential, balance sheets and access to capital,” Christian Thwaites, a poll respondent and president and chief executive officer in New York of Sentinel Investment, which manages more than $27 billion, said in an e-mail.
Expectation is that the U.S. will avert $607 automatic spending and tax cuts which is helping fuel the global optimism that President Barack Obamaand Congressional leaders will reach a short-term agreement to avoid the fiscal cliff.
Commodities are down 18 perent from September according to the last survey and forcasted to be the attractive asset expected to perfrom well over the next with the worst being U.S. Treasury bonds which forty-eight percent holders intend to sell bonds over the next six months.
“The global economy is improving, recovering and healing, thanks to the U.S. and the emerging markets,” said Andrea Guzzi, a poll respondent and vice president of IST Investmentstiftung fuer Personalvorsorge, which manages money for Swiss pension funds. “More people are becoming wealthy, less and less are poor.”
- — Photo Courtesy https://exchanges.nyx.com —
The financial markets have changed and New York Stock exchange has lost volume over the years. Currently it trades only 22% of the equity market down from 80% in the late 1990. Their public competitors such as Direct Edge and BATS, launched in 2005 and 2006 have taken 17% of the volume.
Though some of the balance of equity has disappeared a large percentage have moved off the public exchanges to dark pools or dark liquidity. Darkpools are not available to the public and have little regulation. Technology has advanced to accommodate private trades and with dark pools these trades are often anonymous.
One form of dark pool is for the equity to be handled internally to the organization through a wholesale brokerage. Another form of darkpools are trades by financial institutions so that the trades can be anonymous and does not impact the market. There is no showing of hands that will trigger activity in the market which could potentially push pricing up or down.
THE NYSE plans to recover its lost volume using a hybrid “greypool” to gain benefits of the privacy of the darkpool and benefits of a highly regulated institution.
The Security and Exchange commission approved the NYSE’s pilot program called the Retail Liquidity Program slated for August 1st. The RLP’s intent is to bring business back to the NYSE.
RLP will be able to quote stock prices in fractions of a cent which is not permitted on public exchanges. The market makers using the RLP will not be required to make their prices public and they will be receiving orders directly from the individual investor with an E*Trade accounts instead of purchasing from a hedge fund that may have advantageous information or a volume situation.
NYSE officials say that while the RLP does borrow a few elements from dark pools, it brings them into a more regulated, transparent platform. “The important part around this program is that it replicates some of what happens in non-exchange markets and brings it into an exchange environment where it’s subject to the rules and oversight that exchanges are known for,” says Joe Mecane, the NYSE’s head of U.S. equities.