Was this email forwarded to you? Sign up here.
Illustration: Aïda Amer/Axios
The Nasdaq, NYSE and the Cboe are seeking to block their regulator, the SEC, from implementing a new pricing program.
Why it matters: The SEC says what's been called the "biggest stock market experiment in more than a decade" is designed to benefit retail investors. But the stock exchanges are fighting back against a major prong in Trump appointee Jay Clayton's push to re-regulate stock exchanges.
What's happening: Later this year, the SEC will begin a pilot program for up to 2 years that would prohibit exchanges from paying some fees to big brokers like Charles Schwab or TD Ameritrade.
What they're saying:
The other side: The current system, allows exchanges to “pay incentives for people to send investors’ orders to places where they get a worse price,” John Ramsay, IEX Group's chief market policy officer and former acting head of Trading & Markets at the SEC, tells Axios.
What to watch: That the fight between the exchanges and the SEC has escalated to two separate court filings is unusual because the "SEC usually consults closely with the exchanges," Adam Clark Joseph, a finance professor at the University of Illinois, tells Axios. "In the past, lots that has been subject to disagreement ... has gotten smoothed out in advance."
Dion's thought bubble: Clayton, a lawyer who made millions from his firm's work with Wall Street banks like Bear Stearns and Goldman Sachs, has made pushing for the "interests of America’s retail investors" a primary focus of his administration. It appears this iteration has seriously stoked the ire of America's biggest exchanges. There's likely more to come.
Economists at ratings agency S&P Global raised the probability of a U.S. recession in 2019 to 20–25% Wednesday, in large part because of the flattening U.S. Treasury yield curve. That's higher than its previous assessment of 15–20% 3 months ago.
Between the lines: S&P Global releases a quarterly publication that examines 10 leading indicators of near-term economic growth. Two indicators turned negative this quarter for the first time since mid-2017, when the ratings agency's economics group first began to look at these metrics.
Don't blink: As S&P raises its U.S. recession worries, a new survey shows European money managers are growing increasingly wary of a global recession.
Almost 30% of respondents to Bank of America Merrill Lynch's latest survey of European money managers said a worldwide economic contraction was their biggest concern, the strongest consensus for any single risk since June 2017.
A woman holds a branded table water called Buhari Vendors and bearing photographs of Nigeria's President Mohammadu Buhari and Vice President Yemi Osinbajo in Abuja. Pius Utomi Ekpei/AFP/Getty Images
A surprise delay in Nigeria's presidential election has some asset managers seeing dollar signs — and in some cases naira signs, writes Reuters' Karin Strohecker.
Why it matters: "Lured by a rekindled appetite for emerging markets and an upbeat oil price outlook, foreign investors have recently raised exposure to Nigeria," Strohecker writes, noting pickups in both Nigerian equities and fixed income since the start of the year, according to flow tracker EPFR.
The announcement the election for 84 million registered voters would be rescheduled came days after foreign investors piled into Nigerian stocks and bonds, betting on a smooth election run.
"This is a deeply unloved market whether measured by overall market volumes, foreign participation, valuation relative to history, or performance versus frontier or oil-exporter peers," said Hasnain Malik at Exotix Capital. "That level of despair usually means opportunity."
"Eurobond valuations still look attractive as yields are likely to remain anchored regardless of outcome and the election means we are unlikely to get issuance until 3Q," said Diana Amoa, emerging market debt portfolio manager at JPMorgan Asset Management.
Going deeper: Asset managers aren't just looking at Nigeria's hard currency-denominated debt, which has long been a favorite for risk-taking investors (and has outperformed both broad emerging market sovereign debt and African peers, returning around 10% year-to-date).
They're also snapping up Treasury bills denominated in Nigeria's local naira currency, which has been one of the most volatile on earth for years.
Of note: Vetiva Capital predicted the naira will see a devaluation of 7% in 2019. It's one of presidential contender Atiku Abubakar's policy proposals.
"It is like picking up pennies in front of a steam roller," Capitulum Asset Management's Lutz Roehmeyer told Reuters of buying the local currency bonds. "You pick up a lot of pennies, but the losses are huge if the steamroller gets you."
Minutes from the Federal Reserve's December policy meeting back the trend of continued retreat from tightening monetary policy highlighted yesterday. The minutes did suggest the Fed's policymakers are split between two camps, but those appear to be Dovish and More Dovish.
The minutes showed FOMC members largely agreed that the balance sheet rundown is likely to end in the second half of 2019. Nearly all top officials at the meeting agreed that the central bank should announce "before too long" details of a new plan to stop reducing the balance sheet later this year.
What they're saying: The FOMC meeting minutes included 13 mentions of the word "patient," and according to the minutes, there were a "variety of considerations that supported a patient approach," Yahoo Finance's Heidi Chung notes.
What they're not saying: "The question is still whether to hike or not — we have yet to arrive at the 'when or how much to cut' stage of the cycle," BMO Capital Markets' rate strategist Ian Lyngen said in a note to clients.
Following a globally dovish theme, the Bank of Jamaica announced Wednesday it was lowering its policy rate to 1.5%.
History: Zumbi dos Palmares was a warrior king known as one of the pioneers of resistance to slavery of Africans by the Portuguese in Brazil. He was also the last of the kings of the Quilombo dos Palmares, a settlement of Afro-Brazilians who liberated themselves from enslavement, in present-day of Alagoas, Brazil.
Palmares was established around 1605 by enslaved Africans who fled to the hills and instituted a free settlement they called Angola janga, which would grow to be the greatest community of escaped slaves in the Americas.
By 1678, the governor of a local region offered freedom for all runaway slaves in Palmares if the colony would submit to Portuguese authority. Zumbi, then the commander-in-chief of the Palmares' forces, refused to accept freedom while other Africans remained enslaved.
Zumbi challenged the country's current king, his uncle who supported the accord, for the throne. As king, he implemented a far more aggressive stance against the Portuguese, leading Palmares for years to come.
Nov. 20 is still celebrated in Brazil as a day of Afro-Brazilian consciousness. Brazilians of African descent honor Zumbi as a hero and symbol of freedom.