The Midterms' Green Wave
(Bloomberg) -- Forget the blue wave. This real winner on Tuesday did not have an (R) or a (D) at the end of their name. This year's midterm elections had a green wave. Marijuana passed in three out of the four states where it was on the ballot. In Missouri and Utah, voters chose to legalize medical marijuana, while Michigan voted to allow recreational marijuana. North Dakota was the only one of the states where voters rejected the measure.
On What'd You Miss This Week, Scarlet Fu, Joe Weisenthal, Caroline Hyde and Romaine Bostick spoke with Vivien Azer, a Senior Research Analyst at Cowen, about what this meant for the marijuana market in the United States. Azer said the election results were critical and a "continuation of momentum" from the 2016 election, when eight out of the nine ballot measures passed. Azer, who is the first senior Wall Street analyst to cover the emerging cannabis sector, explained why political leadership is a key ingredient for the industry. As the Washington guessing game continues over who could replace Jeff Sessions as Attorney General, Azer said any name would be an improvement. It is "really hard to imagine anyone who could be worse for the cannabis industry," she said. As for the new Democratic-controlled House, Azer predicted having Nancy Pelosi as Speaker would be "helpful" for the industry.
Mandy Xu, Chief Equity Derivatives Strategist for Credit Suisse, also came on to talk about the unique asset volatility among U.S. stocks that she has been tracking. There is dislocation between equity and cross-asset volatility - with none of the rise in the VIX index bleeding over into fixed income, FX, credit or commodities. The takeaway, Xu said, should be that "what's been driving markets recently is a very equity specific catalyst." Whatever the recent correction is pinned on, "It's not macro. It's not global growth concerns. It's not U.S. growth concerns," she said. The panic is just not there, Xu explained. "You don't see that big bid for downside protection that you typically see." Investors recognize that this is "very much an earnings-driven, single-stock driven, fundamentally-driven correction" in the S&P 500 Index.
Only one out of 10 U.S. mutual fund managers are women, and Seema Hingorani, the Founder and Chair of Girls Who Invest, came on to talk about how to fix that pipeline problem. In the third year, 200 women have gone through their flagship program and gone on to paid summer internships at 66 different asset management firms across the world. “We are actually changing the way these firms think about recruiting talent,” Hingorani said. Their work produces more than just a social good. It provides a financial edge. Hingorani explained why research has shown that “more gender diverse teams get better outcomes.” Similar to politics, one of the biggest hurdles that remains for women in finance is fundraising. “Raising capital is hard for anybody,” Hingorani said, “but it’s especially hard for women.”
GTS has agreed to buy Cantor Fitzgerald's ETF and retail-stock trading divisions, and the deal comes with the added bonus of an industry legend coming along with it. Ari Rubenstein, the CEO of GTS, and Reggie Browne, who had been serving as the global co-head of ETFs at Cantor, joined to discuss the acquisition. The deal, which Rubenstein said grew out of client demand, makes GTS look more like their rivals Citadel Securities and Virtu Financial Inc. Rubenstein said investors are about to get a huge upgrade with an increased focus on technology and client service that will save money and increase confidence. With the deal, "the advantage of ETFs are amplified," Rubenstein said, "because they become even more of an efficient vehicle." As for what self-proclaimed "ETF evangelist" sees on the horizon for the industry, Brown said he was still looking to keep evolving with fixed income innovation.
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