TRADING THE WEEK: Jobs Report and Fed Set Holiday Table
Traders endured a holiday-shortened week which gave way to previous concerns about the state of the US economy and intentions of the Federal Reserve. Last week’s data did little for traders but provide momentary bouts of volatility and sporadic trading opportunities on anything out of President-elect Trump’s transition team. But traders told Markets Media that they remained focused on the upcoming and widely expected hike in short-term interest rates at its December 14th meeting.
Last week was very slow due to the US Thanksgiving holiday and truncated trading sessions, with many traders leaving early last Wednesday and few manning desks on Friday when exchanges closed at 1pm.
Trading on U.S. equity exchanges dropped again this week as the US Thanksgiving holiday curtailed activity. Trading levels averaged 7.14 billion shares per day for the week ended November 23, according to Bats Global Markets data. That’s compared to an average of 8.61 billion shares in the week ending November 18.
“I would say yet again the market continues to adjust accordingly to a Trump presidency. The view is clear now many believe he will restore more jobs in the US as well as build infrastructure so this drove equities to all-time highs,” began Bill Mingoine, Managing Director and Head of Equities at Drexel Hamilton. “Most economic data has bee positive and allows for a rate hike in the coming weeks.”
Mingoine added that his firm believes that the equities market has is priced into the market and now its up to the Fed to follow through.
“The delivery of that rate hike is important as a dovish delivery or approach could spawn a Treasury rally,” Mingoine said. “The market will have lots of data to digest this week as we await to hear on numbers such as purchasing mnagers data, GDP, consumer confidence and eventually the Fed.”
In other market news, just two weeks after the U.S. Presidential election and the subsequent announcement by Chairman Mary Jo White that she would be leaving the Commission at the end of the current administration’s term, a second top regulator is leaving. Stephen Luparello, Director of the Division of Trading and Markets, will leave the agency by the first of the year.
Upon Luparello’s departure, Heather Seidel, Chief Counsel for the Division of Trading and Markets, will become the acting director.
Seidel began her securities law career at the SEC in 1996 in what was then the Division of Market Regulation and later moved to the Division of Investment Management. She then spent several years in the private sector, starting in 1999 as an associate at the law firm of Wilmer, Cutler and Pickering and in 2001 as an associate and vice president in the law division of Morgan Stanley.
She returned to the SEC in 2003 to the Division of Trading and Markets, serving as an Attorney Fellow, Senior Special Counsel and Assistant Director in the Office of Market Supervision. In 2010 she became an Associate Director in the Office of Market Supervision, and in 2015 she was named as Chief Counsel for the Division.
During Luparello’s tenure, the Commission adopted Regulation Systems Compliance and Integrity (Reg SCI), which established new controls to strengthen crucial technological systems, providing greater transparency, accountability and resilience. He also played a key role in the Commission’s efforts to enhance operational transparency and regulatory oversight of alternate trading systems (ATSs) that trade stocks listed on a national securities exchange, including dark pools. Additionally, he oversaw proposed rules that for the first time would require broker-dealers to disclose the handling of institutional orders to customers.
Moreover, Luparello’s spearheaded the plan to create a comprehensive database that allows regulators to track trading activity in the U.S. equity and options markets – the consolidated audit trail or CAT. CAT, just approved for creation on November 15th, will greatly enhance regulators’ ability to monitor market behavior and reconstruct market events.
He also was instrumental in the creation of the Commission’s first Equity Market Structure Advisory Committee, and as the Committee’s designated federal officer, he facilitated significant discussions on the structure and operations of the U.S. equities markets.
This Week’s U.S. Economic Indicators of Interest:
|Monday||Dallas Fed Manufacturing Survey|
|Tuesday||Redbook Retail Sales
Stanley Fischer Speaks
William Dudley Speaks
Robert Kaplan Speaks
Jerome Powell Speaks
New Home Sales
Loretta Mester Speaks
Daniel Turello Speaks
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