<ul class="summary-list"><li><keyword id="11893878" type="UNKNOWN" weightage="60" keywordseo="stocks" source="Orion">Stocks</keyword> fell Thursday, with the <keyword id="11898248" type="UNKNOWN" weightage="60" keywordseo="sp-500" source="Orion">S&amp;P 500</keyword> moving closer to a bear market.</li><li>Weekly jobless claims rose by 21,000 to 21,8000, the highest level since January. </li></ul>Stocks fell Thursday, adding to steep losses as economic growth concerns were underscored by a rise in weekly jobless, leaving investors to keep watch on S&amp;P 500 as it moved closer to bear market territory. The S&amp;P 500 was looking at a second day of losses following the release of US labor market data. Weekly jobless claims rose by 21,000 to 218,000, with the highest figure since January at hinting at some weakness in the job market. The state of the retail sector was also on the minds of investors after Kohl's slashed its full-year outlook. The S&amp;P 500 was moving closer to a bear market. A decline to 3834.83 would mark at 20% drop from its all-time high of 4,818.62 that it logged in early January.Here's where US indexes stood at 9:30 a.m. on Thursday: <ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">S&amp;P 500</a>: 3,893.03, down 0.78% </li><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Dow Jones Industrial Average</a>: 31,159.38, down 1.05% (330.69 points)</li><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Nasdaq Composite</a>: 11,384.60, down 0.4%</li></ul>Around the <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>, Cathie Wood says it's 'ridiculous' that <a href="https://markets.businessinsider.com/stocks/tsla-stock">Tesla</a> got <a href="https://markets.businessinsider.com/news/stocks/cathie-wood-ark-invest-tesla-removal-sp500-esg-index-ridiculous-2022-5">booted out of the S&amp;P 500's ESG index</a>.The crash of TerraUSD will be followed by more cryptocurrency failures, <a href="https://markets.businessinsider.com/news/currencies/terra-crash-stablecoin-luna-crypto-failures-lower-trust-sec-gensler-2022-5">warned SEC chief Gary Gensler</a>. Oil prices fell.<a href="https://markets.businessinsider.com/commodities/oil-price?type=wtisource=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest"> West Texas Intermediate crude</a> lost 3.9% to $105.30 per barrel.<a href="https://markets.businessinsider.com/commodities/oil-price"> Brent crude,</a> the international benchmark, gained 2.9% to $105.91. <a href="https://markets.businessinsider.com/commodities/gold-price?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Gold</a> gained 1.2% to $1,837.50 per ounce. The<a href="https://markets.businessinsider.com/rates/u-s--rates-10-years"> 10-year yield</a> dropped 11 basis points to 2.78%. <a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> rose 1.1% to $29,536.81.

Stocks extend sell-off after rise in jobless claims, with S&P 500 heading toward bear market

<a href="https://www.businessinsider.com/category/master-your-crypto"></a><div type="image" title="Crypto mining" height="3526" width="4702" msid="94517535" hostid="261" sizebytes="313978"></div><ul class="summary-list"><li>Limited power and infrastructural and logistics issues have led to inefficiencies in cryptocurrency mining farms.</li><li>Sabre56 is a cryptocurrency mining consultancy working to plug a hole in this sector's problems.</li></ul>Cryptocurrency mining is an infamously energy-intensive endeavor, and <a href="https://institutions.newscientist.com/article/2320474-cryptocurrency-mining-is-still-on-the-rise-despite-huge-price-drops/" target="_blank" rel="nofollow noopener sponsored">a growing number of crypto miners </a>are hungry for electricity.With limited power on national grids, "all the low-hanging fruit for power has been snapped up," CEO of mining consultancy firm Sabre56, and ex-special forces operative, Phil Harvey, told Insider. Pair this with the fact that, until recently, there has been a lack of direction regarding exactly how organizations should efficiently build and run crypto mining farms, and, as Harvey said: "expensive mistakes are being made." Companies like Sabre56 aim to help crypto miners avoid mistakes and make good choices in terms of infrastructure and planning. According to the <a href="https://ccaf.io/cbeci/index" target="_blank" rel="nofollow noopener sponsored">Cambridge Bitcoin Electricity Consumption Index,</a> Bitcoin, the world's largest cryptocurrency, consumed <a href="https://ccaf.io/cbeci/index" target="_blank" rel="nofollow noopener sponsored">105 terawatt-hours</a> (TWh) of electricity per year in 2021. That is more than what powers some small countries and excludes the energy used by thousands of other crypto coins flooding the market.While many investors who populate the crypto mining industry have access to capital, Harvey says millions of dollars are often spent buying equipment without considering essential infrastructural issues.Temperature and climate concerns, navigating local governmental regulations, and liaising with utility providers, these infrastructural setbacks can all delay a mining rig's kick-off date. "If machines aren't turned on the day they arrive, the investors and companies that purchased them are losing money. I know of hundreds of thousands of machines that are sat in warehouses without plug sockets, not generating any value," said Harvey, whose company scouts sites and works with local utility companies to ensure they can accommodate the power for mining.<h2>Transforming a hydroelectric dam in Paraguay into crypto power</h2>One such venture with big ambitions, but which began with very little knowledge of the practicalities of mining, is the ongoing project at the Itaipú dam on Paraguay's Brazilian border, which is seeking to transform excess power into a source of crypto mining.Since 2020, low energy costs in Paraguay have encouraged both local and foreign companies to <a href="https://cointelegraph.com/news/president-of-paraguay-vetoes-crypto-regulation-law" target="_blank" rel="nofollow noopener sponsored">increase their investments</a> in the country's crypto mining infrastructure, with the Paraguayan senate officially recognizing cryptocurrency mining as an industrial activity <a href="https://www.coindesk.com/policy/2022/07/15/paraguayan-senate-passes-bill-regulating-crypto-mining-and-trading/" target="_blank" rel="nofollow noopener sponsored">in July of this year,</a> seeing an opportunity to create jobs and improve commerce across the South American nation.Michael Blank, an independent advisor to Paraguay's government, who worked on the project alongside Sabre56, told Insider, "We sought to implement this process for growing the digital asset mining sector, with limited to no in-depth knowledge about the industry." Citing government stipulations such as minimum employee requirements, the implementation of specific technology solutions, and ESG concerns, the team faced a number of difficulties. "The industry landscape — or lack thereof — was naturally challenging," Blank said. Working alongside Blank and his team, Sabre56 surveyed the site, considered how the project would integrate with local urban and rural infrastructure, and whether the technology, power, and workforce needs were sufficient in the area, and advised on how a large-scale mining rig might best be regulated by the government. At the time of writing, the project is up for tender, with cryptocurrency miners competing to take control of the dam. <h2>Designing a successful crypto mining facility</h2>Sabre56 has consulted on projects as varied as re-routing excess power from Abu Dhabi's nuclear projects to sustainably-sourced mining in Norwegian and Canadian hydroelectric dams. Harvey's team has helped deliver around 400 megawatts of power to the crypto mining sector, which they say is the equivalent of up to 800, 50-story tower blocks worth of energy.While the design intent of each mining facility is similar — utilize excess energy to power the computers that make up the backbone of cryptocurrencies' blockchains — each project presents its own challenges. "The parties that come together are very different, or government regulations are different, or you have certain project nuances such as temperature, climate, timeframes, budgets, and all the drama that continues around the world to delay the project," he said. Sabre56 uses its military edge to navigate these competing factors — around half of the consultancy is made up of British ex-special forces operatives. "One of the things we were taught is no plan survives contact with the enemy," he said. In mining, that enemy is anything that threatens to delay the machines.According to Harvey, it is carefully orchestrated projects like that of the Itaipu dam that move crypto mining away from its <a href="https://www.sec.gov/news/speech/gensler-aspen-security-forum-2021-08-03" target="_blank" rel="nofollow noopener sponsored">"Wild West"</a> reputation, and will prove critical in building a long-term, scalable, and sustainable sector."If there is any industry that can push forward the sustainability program, or move from carbon to renewables, then it would be the blockchain industry," said Harvey, of the sector that is currently thought to emit around <a href="https://www.weforum.org/agenda/2022/08/cleaning-up-cryptocurrency-mining/" target="_blank" rel="nofollow noopener sponsored">65 megatons</a> of carbon dioxide into the atmosphere each year. This article is intended to provide generalized information designed to educate a broad segment of the public; it does not give personalized investment, legal, or other business and professional advice. Before taking any action, you should always consult with your own financial, legal, tax, investment, or other professional for advice on matters that affect you and/or your business.

Crypto miners turn to infrastructure consultancies like Sabre56 to help them avoid costly mistakes

<ul class="summary-list"><li>US <keyword id="11893878" type="UNKNOWN" weightage="60" keywordseo="stocks" source="Orion">stocks</keyword> end lower Thursday as economic data kept worries about a recession or stagflation simmering. </li><li>The <keyword id="11898248" type="UNKNOWN" weightage="60" keywordseo="sp-500" source="Orion">S&amp;P 500</keyword> avoided dropping into a bear market just four months after hitting an all-time high. </li></ul>Thursday's seesaw session in US stocks ended in losses as economic data came in weaker than investors had anticipated, but the benchmark S&amp;P 500 index managed not to slip into a bear market. Major benchmarks darted between gains and losses as investors evaluated fresh economic data that pointed to softening conditions, further stoking concerns about stagflation or even a looming recession. The S&amp;P 500 fell but not by enough to register a bear market, or a loss of 20% or more from a recent high. The steepness in the index's daily loss was mitigated by gains in the materials, consumer discretionary, and health care sectors. Here's where US indexes stood at 4:00 p.m. on Thursday: <ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">S&amp;P 500</a>: 3,900.72, down 0.59% </li><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Dow Jones Industrial Average</a>: 31,253.26, down 0.75% (236.81 points)</li><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Nasdaq Composite</a>: </li></ul>Weekly <keyword id="11894903" type="UNKNOWN" weightage="60" keywordseo="jobless-claims" source="Orion">jobless claims</keyword> rose by 21,000 to 218,000, an unexpected increase to the highest amount of filing for unemployment benefits since January. Also, the <a href="https://www.philadelphiafed.org/surveys-and-data/regional-economic-analysis/mbos-2022-05">Philly Fed Index</a> of manufacturing activity dropped by 15 points in May to 2.6, well below the Econoday consensus estimate of 16.1.Bond yields rose as investors bought government debt in a flight to safety. The closely watched <a href="https://markets.businessinsider.com/rates/u-s--rates-10-years">10-year Treasury yield</a> fell to a <a href="https://markets.businessinsider.com/news/bonds/yield-10-year-bonds-fed-rates-jobless-claims-economy-inflation-2022-5">three-week low </a>during the session. More pain came from the retail sector, with Kohl's cutting its yearly outlook, adding to disappointing results this week from Walmart and Target.Around the <keyword id="11893875" type="UNKNOWN" weightage="100" keywordseo="markets" source="Orion">markets</keyword>, hedge fund <a href="https://markets.businessinsider.com/news/funds/melvin-capital-shut-down-after-losing-billions-gamestop-short-squeeze-2022-5">Melvin Capital is shutting down</a> a year after losing billions of dollars from its GameStop short-squeeze Cathie Wood says it's 'ridiculous' that<a href="https://markets.businessinsider.com/stocks/tsla-stock"> Tesla</a> got<a href="https://markets.businessinsider.com/news/stocks/cathie-wood-ark-invest-tesla-removal-sp500-esg-index-ridiculous-2022-5"> booted out of the S&amp;P 500's ESG index</a>.The crash of TerraUSD will be followed by more cryptocurrency failures,<a href="https://markets.businessinsider.com/news/currencies/terra-crash-stablecoin-luna-crypto-failures-lower-trust-sec-gensler-2022-5"> warned SEC chief Gary Gensler</a>. Oil prices were mixed.<a href="https://markets.businessinsider.com/commodities/oil-price?type=wtisource=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest"> West Texas Intermediate crude</a> turned higher, rising 2.4% to $112.25 per barrel.<a href="https://markets.businessinsider.com/commodities/oil-price"> Brent crude,</a> the international benchmark, narrowed losses to 0.2% at $111.84. <a href="https://markets.businessinsider.com/commodities/gold-price?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest">Gold</a> gained 1.3% to $1,839.40 per ounce. The<a href="https://markets.businessinsider.com/rates/u-s--rates-10-years"> 10-year yield</a> fell 4 basis points to 2.84%. <a href="https://markets.businessinsider.com/currencies/btc-usd">Bitcoin</a> rose 2.9% to $30,056.37.

US stocks closed mixed in volatile session but S&P 500 avoids stepping into bear market

<a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell&amp;hash=8122c716833601fc1471f79af063b104?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">Welcome to 10 Things Before the Opening Bell. Sign up here to get this email in your inbox every morning.</a>For the biggest stories in politics, <a href="https://newsletter.businessinsider.com/join/10-things-in-politics?utm_source=markets&amp;utm_medium=ingestgest" target="_blank" rel="noopener">sign up here for 10 Things in Politics You Need to Know Today</a> - launching soon!Here's what you need to know before <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> open.1. Global stocks shrug off AstraZeneca vaccine concerns. <a href="https://markets.businessinsider.com/currencies/news/stock-markets-today-shares-rise-despite-astrazeneca-covid-vaccine-hitch-2020-11-1029844216">See what markets are doing today</a>. 2. Trump says he will 'certainly' leave the White House <a href="https://www.businessinsider.com/trump-willing-leave-white-house-electoral-college-elects-joe-biden-2020-11">if the Electoral College elects Joe Biden</a>. The president has not conceded.3. Nouriel Roubini trashed Bitcoin for being heavily manipulated. The economist <a href="https://markets.businessinsider.com/currencies/news/economist-nouriel-roubini-trashes-bitcoin-manipulation-retail-investor-fomo-2020-11-1029844248">blamed retail investor FOMO</a> for this week's boom and bust in a series of tweets.4. BBVA walks away from merger with Banco Sabadell after the two Spanish lenders had <a href="https://www.businessinsider.com/spain-bbva-banco-sabadell-scrap-merger-talks-over-price-disagreement-2020-11">confirmed a tie-up less than two weeks ago</a>.5. SpaceX's Starship to have first big high-altitude test next week. CEO Elon Musk said there was a <a href="https://www.businessinsider.com/spacex-elon-musk-starship-first-high-altitude-test-scheduled-2020-11">lot that could go wrong</a>, and gave the rocket a 1-in-3 chance of landing in one piece.6. AstraZeneca will likely retest its COVID-19 vaccine. An error in the trial <a href="https://www.businessinsider.com/astrazeneca-second-covid-19-vaccine-trial-2020-11">left some participants with half doses</a> instead of full doses.7. <a href="https://markets.businessinsider.com/economic-calendar">On the data docket</a>. France GDP and UK housing price data have been released.8. 15 stocks hedge funds love and hate the most right now. Goldman Sachs' hedge fund VIP list has crushed the S&amp;P 500 60% of the time since 2001— <a href="https://www.businessinsider.com/stock-picks-hedge-funds-most-loved-hated-stocks-goldman-sachs-2020-11">here's the full list</a>.9. 10 value stocks set to rise by as much as 52%. As investors become increasingly aware of the swing away from growth and into value, <a href="https://www.businessinsider.com/stock-picks-buy-cyclical-recovery-value-europe-covid-deutsche-2020-11">Deutsche Bank targets another set of 'real economy' shares</a>.10. How to select winning ESG stocks. Di Zhou's international ESG fund breaks down <a href="https://www.businessinsider.com/investing-strategy-how-to-pick-esg-stocks-di-zhou-2020-11">how to select winning stocks</a> and explains why Alibaba is the biggest holding in her portfolio.

10 things you need to know before the opening bell

<ul><li>Concerns over a potential bubble forming in the stock market have been growing as equities continue to hit record highs.</li><li>But according to a Thursday note from <keyword id="44660" type="CITY" weightage="60" keywordseo="JPMorgan">JPMorgan</keyword>, the broader stock market is not in a bubble.</li><li>Instead, five sectors in particular seem to be in bubble territory after more than tripling in price, the bank said.</li><li><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestmp;utm_medium=ingest" target="_blank" rel="noopener">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</li></ul>A continued rise to record highs in the stock market has some worried that a bubble is forming as valuations appear stretched and rising inflation seems imminent.But according to <a href="http://markets.businessinsider.com/news/stocks/these-3-factors-will-support-more-stock-market-gains-as-a-staggered-global-economic-recovery-unfolds-jpmorgan-says-1030287278">a Thursday note from JPMorgan,</a> there is no bubble to be found in the broader stock market. High expectations for historic economic growth amid a reopening of the US economy supports the move higher in stocks, according to the bank, which expects US GDP growth of 6.3% for 2021. But within certain sectors, there does appear to be pockets of froth that are likely experiencing a bubble, JPMorgan said. These are sectors that "have more than tripled in price over a short period of time," the bank explained.These are the five sectors of the stock market that appear to be in a bubble, according to JPMorgan.1. Clean EnergyAnything related to ESG has seen a boom in prices as investors continue to gravitate towards sustainable investing. Clean energy is one sector that comes top of mind to investors that are looking to invest in a green future, and the top holdings in the iShares Clean Energy ETF represent companies in the fuel cell and wind energy space.Since its pandemic low last year, the ETF rallied as much as 324% in less than a year, meeting JPMorgan's criteria for a potential bubble. 2. Solar EnergyThe sector saw a strong boost as the prospects of a <a href="https://markets.businessinsider.com/news/stocks/solar-stocks-jump-election-results-lift-hopes-for-green-energy-2021-1-1029938013">Joe Biden presidency and democratic-controlled Senate became more apparent.</a> President Biden has pointed to solar as a core technology needed to combat climate change. The industry is expected to significantly benefit from <a href="https://www.businessinsider.com/what-is-in-bidens-infrastructure-bill-package-american-jobs-plan-2021-3">Biden's $2.2 trillion infrastructure bill.</a>Solar stocks staged a strong rebound after its pandemic low, with the Invesco Solar ETF rallying as much as 496% in less then a year.Read more: <a href="https://www.businessinsider.com/stocks-to-buy-best-top-growth-zevenbergen-jacob-jabusch-plumb-2021-4" target="_blank" rel="noopener">We asked 5 renowned growth-fund managers for their favorite stock picks. These are the 4 that multiple managers think will crush the market going forward.</a>3. Electric VehiclesFollowing the theme of clean energy and Biden's green agenda, electric vehicles have staged monster rallies over the past year, mostly led by Tesla. Now, investors are holding out hope for more gains as <a href="https://markets.businessinsider.com/news/stocks/electric-vehicle-stocks-biden-infrastructure-plan-174-billion-investment-tesla-2021-3-1030265096">Biden's infrastructure bill includes $174 billion for the electric vehicle industry.</a>EV stocks have rallied by as much as 178% since its pandemic low last year, as measured by the iShares Self-Driving and Electric Vehicle ETF. 4. CryptocurrenciesBitcoin remain the most popular <keyword id="2721952" type="PERSON" weightage="60" keywordseo="crypto">crypto</keyword>currency, but thousands of other crypto assets exist, and many of them have seen marked price increases over the past year. Those crypto assets tend to move in tandem with bitcoin, which saw a more than 1,400% increase since last year's pandemic low. <a href="https://markets.businessinsider.com/currencies/news/crypto-market-cap-bitcoin-doubles-to-2-trillion-rally-surges-2021-4-1030274638">The total market value for cryptocurrencies recently exceeded $2 trillion,</a> and even <a href="https://markets.businessinsider.com/currencies/news/xrp-price-3-year-high-ripple-crypto-boom-sec-lawsuit-2021-4-1030278047">XRP caught a bid as it faces a lawsuit</a> from the US Securities and Exchange Commission. While JPMorgan views cryptocurrencies in a potential bubble, the firm believes <a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-outlook-volatility-attractive-institutions-supports-price-target-jpmorgan-2021-4-1030270274">bitcoin could hit a long-term price objective of $130,000. </a>5. <keyword id="4675570" type="PERSON" weightage="60" keywordseo="SPACs">SPACs</keyword>The boom in SPACs over the past year has been unprecedented, as companies seeking to go public sidestepped the traditional IPO process in favor of the quicker and cheaper SPAC process amid the pandemic. <a href="https://markets.businessinsider.com/news/stocks/spac-market-q1-statistics-volume-166-billion-growing-adoption-2021-3-1030194528">In the first quarter of 2021, SPACs raised more money than the did in the entirety of 2020.</a> Some estimates even suggest that the current stable of SPACs have more than $1 trillion in buying power. But the <a href="https://markets.businessinsider.com/news/stocks/sec-spac-earnings-wild-projections-offering-black-check-ipo-2021-4-1030289555">SEC is starting to set its focus on SPACs and the lofty earnings estimates firms are setting when going public. </a>

The broader stock market is not in a bubble, but these 5 sectors are, according to JPMorgan

<ul><li>About 29% of investors view COVID-19 variants as the greatest risk to <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword>, according to a <keyword id="44660" type="CITY" weightage="60" keywordseo="JPMorgan">JPMorgan</keyword> survey.</li><li>Investors also cited a possible correction in expensive equity sectors and stronger inflation as dangers to the bull market.</li><li>Six-in-ten respondents deemed <keyword id="2420795" type="PERSON" weightage="60" keywordseo="cryptocurrencies">cryptocurrencies</keyword> as being in a bubble, and nearly all said they believe fraud is at least somewhat prevalent in the space.</li><li><a href="https://newsletter.businessinsider.com/join/4np/10-things-opening-bell?utm_source=markets&amp;utm_medium=ingestgest">Sign up here for our daily newsletter, 10 Things Before the Opening Bell</a>.</li></ul>Investors are split on which downside risks are most likely to topple the stock market's bull run.<a href="https://markets.businessinsider.com/stocks/jpm-stock">JPMorgan</a> surveyed clients attending its Macro Quantitative conference in late January on several aspects of the current investing landscape. The questioning came as stocks sat near then-record highs, lifted by hopes for another stimulus bill and declining COVID-19 case counts.Concerns of overvaluation and the emergence of new COVID-19 variants have since dented the market's run-up, and those risks remain top of mind for investors. About 29% of surveyed investors deemed coronavirus mutations the biggest risk to markets, while 28% cited a correction in expensive equity sectors, according to JPMorgan. Roughly one-fifth of respondents named rising yields and stronger inflation as a major risk.Only 13% of investors cited concerns of central-bank tapering. The Federal Reserve has indicated it won't slow the pace of its asset purchases until the US economy makes "substantial further progress" toward reaching above-2% inflation and maximum employment. For now, the Fed continues to buy at least $80 billion of Treasurys and $40 billion of mortgage-backed securities each month.A double-dip recession scenario was the least-feared market risk, garnering just 9% of investors' votes.Nearly 60% of investors thought cryptocurrencies were in a bubble. Bitcoin had just fallen from highs of nearly $40,000 at the time of the conference and now trades near $52,000.Only 11% of investors said they trade cryptocurrencies, and of those who said they don't, 22% plan to start. A majority of respondents said they believe cryptocurrencies are "here to stay." More than three-quarters of respondents expect tighter regulation of the cryptocurrency market, and almost all investors believe fraud is either somewhat or very prevalent in the space. Electric vehicles and green tech stocks were viewed as a bubble by 29% of investors surveyed, according to JPMorgan. Only 3% of investors saw bond-proxies as trading in bubble territory despite yields sitting close to record lows.Nearly half of the survey's respondents see ESG funds receiving the largest inflows, while risk parity strategies are expected to see the largest outflows. About 84% of investors expect value outperformance to continue as the economy reopens and ailing sectors rebound.

COVID-19 mutations and lofty valuations are the stock market's biggest risks, JPMorgan survey says

<div class="KonaFilter image-container display-table"><div><div class="image on-image">TD AmeritradeTD Ameritrade CEO Tim Hockey</div></div></div><ul class="summary-list"><li>Shares of cannabis companies have been among the most volatile in the stock market this year.</li><li>Tim Hockey, the CEO of TD Ameritrade, warns that you shouldn't rush to buy. </li><li>In an exclusive interview with Business Insider after the company's earnings announcement, Hockey discussed why he thinks buyers should beware weed stocks, the differences between this boom and the bitcoin bubble, and how volatility is driving his company's growth. </li></ul>Where <a href="https://www.businessinsider.com/category/weed-stocks">weed stocks</a> are concerned, what goes up quickly must come down - and fast, according to TD Ameritrade CEO Tim Hockey. The $1.3 trillion brokerage has <a href="https://www.businessinsider.com/td-ameritrade-warning-investors-away-from-wild-west-marijuana-stocks-2018-10">warned its clients</a> about the dangers of investing in the red-hot industry, which picked up steam ahead of Canada's legalization of marijuana on Oct. 17. The brokerage is cautioning against painful losses that may lie ahead for traders. At the same time, it acknowledges that - broadly speaking - volatility means more people are trading, and that's good for its bottom line. On Tuesday, the company reported quarterly earnings that topped Wall Street's expectations.Business Insider spoke to Hockey after his earnings call about his outlook for market volatility and his advice for anyone interested in weed stocks. This interview was edited for length and clarity. Business Insider: In Q3, average trades per day rose 50% year-over-year. At the same time, Q3 was pretty quiet in terms of market volatility. So what drove those volumes?Hockey: A broad-based increase with equities in particular, as opposed to it being <a href="https://markets.businessinsider.com/index/vix">VIX</a>-driven. What we're seeing now in October is some of these much more volatility-driven numbers. My own view is that we investors and traders have become more complacent with the VIX in the 12-13 level, when the long-term average of VIX is more like 20. And so my sense is that you get more up-and-down days like today [Tuesday] over the next little while, which feels to me like they are more appropriate after this 10-year bull run. We are long in the cycle.I think you'll see VIX normalizing. There's usually reversion to the mean over such a long period of time.With these new 11 million-plus accounts in the marketplace, I think you'll start seeing a higher level of trading generally as the VIX goes up.BI: That's why it was curious to me that there was such strong growth last quarter when the VIX was in the teens.Hockey: [Growth was driven by] more consumers and more clients entering the space. As I said on the call, our new accounts and our larger new accounts actually were up almost 50% in 2018 over 2017. That's a pretty healthy growth rate, even with relatively low vol. BI: What's the interest you're seeing from millennials and what are they buying?Hockey: Millennials are no different from other people in that they tend to buy what they know, what they like, and what they're interested in. That generally means tech. That clearly is a large driver of our space. A good portion of our clients are in the under-35 set. Under 40 years old, you've got almost 50% of our clients that are new.Crypto tailed off in terms of an interest level, but cannabis-related stocks were about 6% of our trades in the quarter. That's related mostly to the just-passed legalization of cannabis and the <a href="https://markets.businessinsider.com/stocks/acb-stock">companies in Canada</a> [listing on US exchanges, including <a href="https://markets.businessinsider.com/stocks/acb-stock">Aurora Cannabis</a>].BI: Many people are comparing the cannabis boom to what happened with <a href="https://markets.businessinsider.com/currencies/btc-usd">bitcoin</a>, and I was wondering if you had any pointers or advise for people who want to jump on this bandwagon? What should they keep in mind?Hockey: People should always be <a href="https://www.businessinsider.com/bitcoin-price-bubble-unmatched-2017-6">afraid of bubbles</a>. What goes up must come down, and if it goes up too fast, it tends to come down just as fast. We've seen it time and time again. I think there are some differences this time around between cannabis and crypto. Like it or not, there are very real use cases for cannabis and they're still being figured out on the crypto side. [Cannabis has] a market that is ready-made and legalized whereas with crypto, it was very difficult to figure out what that market might be.The <a href="https://www.businessinsider.com/td-ameritrade-warning-investors-away-from-wild-west-marijuana-stocks-2018-10">general advice</a> would be caveat emptor: buyer beware. Don't just buy things on momentum, [thinking that] what goes up must continue to go up forever. That's clearly not the case, as many people that bought crypto in December of last year now know. BI: Another area that's picking up a lot - and perhaps is not as boomy as cannabis or bitcoin - is ESG investing, especially with younger investors. For someone who's interested in investing consciously, how do they start and what kind of tools do you have for them?Hockey: Clearly it's a growing trend although it's been growing over the last 20 years quite slowly.There are significant products that are available in the marketplace. It used to be, right or wrong, that ESG investing was seen as a limiting factor and therefore you had to trade off returns for value. We have just launched a set of ESG portfolios in our central portfolio, which is essentially our robo. And of course, there are many <a href="https://www.businessinsider.com/blackrock-predictions-on-esg-assets-2018-10">ESG instruments</a> available in our ETF market center or available through our platform. BI: And like you alluded to, ESG is no longer seen as a limiting factor but as something that can be a profitable add-on.Hockey: Yes. As an open-architecture platform, our view is to give advice and education and tools so people can make their own choices on how they wish to invest. The good news is that underlying companies are seeing the virtue in aligning their own activities with ESG principles, and as a result, that's getting a broader set of investment options available to get decent returns for clients. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/powerball-tickets-winning-numbers-regret-avoidance-behavioral-economics-2017-8">Why most people refuse to sell their lottery tickets for twice what they paid</a></h3> <div> </div> </div>

The CEO of a $1.3 trillion brokerage warns buyers to beware weed stocks, and explains how the market's recent turbulence is good for business

<ul><li>US stocks gained on Friday as hopes for a peaceful transition to the Biden administration offset concerns about soaring COVID-19 cases. The <keyword id="123873" type="PERSON" weightage="60" keywordseo="SP-500">S&amp;P 500</keyword> closed at a record high.</li><li>President Donald Trump said Thursday that <a href="https://www.businessinsider.com/trump-willing-leave-white-house-electoral-college-elects-joe-biden-2020-11">he'd hand over power</a> when the Electoral College certifies President-elect Joe Biden as the winner of the 2020 election.</li><li>The US reported 125,082 new coronavirus cases on Thursday, bringing the seven-day average to 163,831, <a href="https://covidtracking.com/data">according to the COVID Tracking Project</a>. Deaths topped 254,000, and hospitalizations jumped above 90,000.</li><li>The Cboe Volatility Index — or <a href="https://markets.businessinsider.com/index/vix">VIX</a>, also known as the stock market's "fear gauge" — fell as low as 19.51 on Friday, dropping amid low trading volumes to its lowest level since the pandemic began.</li><li><a href="https://markets.businessinsider.com/indices">Watch major indexes update live here</a>.</li></ul>US equities rose on Friday as optimism about President-elect Joe Biden's transition to the White House squared off with rising virus risks. The S&amp;P 500 closed at a record high.President Donald Trump said Thursday that <a href="https://www.businessinsider.com/trump-willing-leave-white-house-electoral-college-elects-joe-biden-2020-11">he'd pass on power to Biden</a> when the Electoral College cements the president-elect's victory. Though Trump indicated that he might never officially concede defeat, the statement further eased concerns that the sitting president wouldn't allow for a peaceful transition of power.Here's where US indexes stood at the 1 p.m. ET close on Friday:<ul><li><a href="https://markets.businessinsider.com/index/s&amp;p_500?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingesttm_medium=ingest" target="_blank" rel="noopener">S&amp;P 500</a>: 3,638.35, up 0.2%</li><li><a href="https://markets.businessinsider.com/index/dow_jones?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">Dow Jones industrial average</a>: 29,910.37, up 0.1% (38 points)</li><li><a href="https://markets.businessinsider.com/index/nasdaq_composite?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestedium=ingest" target="_blank" rel="noopener">Nasdaq composite</a>: 12,205.85, up 0.9%</li></ul>Read more: <a href="https://www.businessinsider.com/investing-strategy-how-to-pick-esg-stocks-di-zhou-2020-11" target="_blank" rel="noopener">Di Zhou's international ESG fund is beating 98% of its peers this year. The investor breaks down her process for selecting winning stocks and explains why Alibaba is the biggest holding in her portfolio.</a>US stock <keyword id="31671" type="CITY" weightage="100" keywordseo="markets">markets</keyword> closed at 1 p.m. ET due to the Thanksgiving holiday.The Biden administration's transition and the president-elect's announcement that he'd nominate Janet Yellen to be the treasury secretary lifted investor sentiments throughout the week. But rising coronavirus cases across the country reined in some bullishness.The US reported 125,082 new cases on Thursday, bringing the seven-day average to 163,831, <a href="https://covidtracking.com/data">according to the COVID Tracking Project</a>. Hospitalizations rose above 90,000 and deaths above 254,000.The fading of political uncertainties pulled market volatility to its lowest point since the pandemic froze economic activity in March. The Cboe Volatility Index — or <a href="https://markets.businessinsider.com/index/vix">VIX</a>, commonly referred to as the stock market's "fear gauge" — fell as low as 19.51 on Friday amid the calm trading activity.Read more: <a href="https://www.businessinsider.com/stock-picks-hedge-funds-most-loved-hated-stocks-goldman-sachs-2020-11" target="_blank" rel="noopener">Goldman Sachs' hedge fund VIP list has crushed the S&amp;P 500 60% of the time since 2001. These are the 15 stocks hedge funds love and hate the most right now.</a>Investors are likely to look to early reports of Black Friday shopping activity to gauge whether soaring case counts and the slowing pace of economic recovery will affect holiday-season sales. Consumer-spending and income data have pointed to worsening conditions, and some fear that weaker-than-expected holiday revenues could lead to new economic pain.<a href="https://markets.businessinsider.com/currencies/news/bitcoin-price-sell-off-biggest-slide-march-coronavirus-cryptocurrency-btc-2020-11-1029844889">Bitcoin fell</a> in Friday trading, extending its biggest slide since the start of the pandemic. The cryptocurrency had soared to just below its 2017 record of roughly $19,700 before profit-taking dragged it below $16,000 through the Thanksgiving holiday.<a href="https://markets.businessinsider.com/stocks/pltr-stock?utm_source=markets&amp;utm_medium=ingestgest">Palantir</a> turned negative after strong initial gains after Citron Research said it <a href="https://markets.businessinsider.com/news/stocks/palantir-stock-price-target-short-selling-position-citron-research-pltr-2020-11-1029845368">has a short position on the stock</a>. The firm expects Palantir shares to fall roughly 33% by the end of the year, adding that the company is "no longer a stock but a full casino." Palantir has rallied more than 300% since its September direct listing.Read more: <a href="https://www.businessinsider.com/stock-picks-buy-cyclical-recovery-value-europe-covid-deutsche-2020-11" target="_blank" rel="noopener">Deutsche Bank says you need to own these 10 value stocks set to rise by as much as 52% as Europe gets a grip on COVID-19</a><a href="https://markets.businessinsider.com/commodities/gold-price">Gold</a> sank as much as 2.3%, to $1,774.42 per ounce, its lowest since July. The US dollar weakened against all but one of its Group of 10 peers, while Treasury yields fell.Oil futures traded mixed. <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti" target="_blank" rel="noopener">West Texas Intermediate crude</a> dropped as much as 2.5%, to $44.55 per barrel. <a href="https://markets.businessinsider.com/commodities/oil-price?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingestsource=markets&amp;utm_medium=ingest" target="_blank" rel="noopener">Brent crude</a>, oil's international benchmark, posted an increase — it gained 1.3%, to $48.45 per barrel, at intraday highs.Now read more markets coverage from Markets Insider and Business Insider:<a href="https://www.businessinsider.com/stock-picks-to-buy-8-innovative-firms-grow-decade-clearbridge-2020-11" target="_blank" rel="noopener">An innovation-focused portfolio manager at a $158 billion firm shares 8 disruptive stocks across multiple industries he thinks could grow 30% every year over the next decade</a><a href="https://www.businessinsider.com/corporate-profits-q3-record-495-billion-economic-recovery-gdp-report-2020-11">US corporate profits jumped a record $495 billion in the 3rd quarter as the economy reopened</a><a href="https://markets.businessinsider.com/news/stocks/millennial-investors-impact-weaker-older-retail-traders-stock-market-jpm-2020-11-1029841982">The stock-market impact of millennial investors has been overblown as trading volumes decline — and it's actually the older crowd who's exerted more influence, JPMorgan says</a>

S&P 500 ends week at record highs as Biden-transition optimism overshadows virus surge

Lucas Jackson/REUTERS; Samantha Lee/Business Insider"We are basically computer programmers," Interactive Brokers founder Thomas Peterffy said in an interview. "We are not experts of finance."<ul class="summary-list"><li>Interactive Brokers, the Greenwich, Connecticut-based brokerage, has led the way during several phases of the industry's fiercely competitive war over price and capabilities that's played out in recent months. </li><li>Senior leaders from the firm, including chairman Thomas Peterffy, spoke with Business Insider recently about their strategy - and what comes next.</li><li>Their products have been replicated time after time in this cut-throat industry, they're quick to note, and they say they are concerned about tipping off competitors with much talk of future plans. </li><li>"We are basically computer programmers. We are not experts of finance," he told us in a recent interview. "What we lack in expertise in finance we make up in our technology expertise."</li><li><a href="https://www.businessinsider.com/prime">Visit BI Prime for more wealth management stories</a>.</li></ul>In the world of discount brokers, moves like product launches and pricing changes can spark major drama. At 1:19 in the afternoon late last September, Interactive Brokers <a href="https://www.businesswire.com/news/home/20190926005753/en/Interactive-Brokers-Launch-IBKR-Lite">released</a> a statement about an offering it would roll out the following month: a product featuring unlimited, commission-free trades for US-listed stocks and ETFs.Competitors' shares instantly took a hit. By 1:41, investors sent TD Ameritrade shares down 5%. E-Trade closed out the session with a similar loss. Charles Schwab, which has a bigger share of non-commission revenue than rivals, fell 2%. "Ha @IBKR just went full @RobinhoodApp on the entire brokerage industry," Meb Faber, the finance blogger and Cambria Investment Management co-founder, <a href="https://twitter.com/MebFaber/status/1177443683773214726">tweeted</a>. "Love it."That was on a Thursday. The following Monday closed out the third quarter.On Tuesday, Oct. 1, Charles Schwab blasted out a press release from San Francisco before the stock market opened: while <a href="https://www.businessinsider.com/charles-schwab-on-eliminating-fees-amid-online-brokerage-fee-wars-2019-10">publicizing</a> its cofounder's book, the firm <a href="https://www.businesswire.com/news/home/20191001005489/en/Conjunction-Chuck-Schwab%E2%80%99s-New-Book-%E2%80%9CInvested%E2%80%9D-Schwab">also</a> said it would stop asking customers to pay a fee for their trades.REUTERS/Lucas JacksonPeterffy founded Interactive Brokers in 1977.That Tuesday night, TD Ameritrade <a href="https://www.amtd.com/news-and-stories/press-releases/press-release-details/2019/The-Best-Just-Got-Better-TD-Ameritrade-Introduces-0-Commissions-for-Online-Stock-ETF-and-Option-Trades/default.aspx">swooped</a> in with a message from Omaha that it too would get rid of commissions. Its shares plunged 26% that day.Twenty-one hours later, E-Trade <a href="https://www.businesswire.com/news/home/20191002005817/en/1-Digital-Broker-E*TRADE-Announces-0-Base">followed suit</a>. Fidelity did the same the following <a href="https://www.businesswire.com/news/home/20191010005389/en/Fidelity-Firm-Offers-Zero-Commission-Online-Trading">week</a>.Then in November, just before Thanksgiving, Charles Schwab said it would <a href="https://www.businessinsider.com/inside-26-billion-charles-schwab-td-ameritrade-deal-2019-11">buy TD Ameritrade</a> in the largest brokerage deal on record. Executives said it would lead to <a href="https://www.businessinsider.com/charles-schwab-and-td-ameritrade-us-branch-maps-overlaps-2019-12">branch closures</a> and job losses; some registered investment advisers, especially small ones, bristled at the thought of being forced to change custodians.Entire brokerage, custody, and <a href="https://www.businessinsider.com/category/wealth-management">wealth management</a> worlds were upended in less than two months' time after Interactive Brokers sparked the rapid-fire, industry-wide domino effect.The $23 billion public company, a third the size of Charles Schwab's market capitalization and 2-½ times larger than E-Trade, had put itself out there as a first-mover - <a href="https://www.businessinsider.com/robinhood-series-e-7-billion-valuation-2019-7">at least</a> among incumbent firms - in offering commission-free trades, a feature of modern finance that a younger set of traders and investors with money on startup brokerage apps has come to see as a given. It wasn't the first time Interactive Brokers was on the leading edge of an industry trend. It was first among its large rivals when it started offering <a href="https://www.businessinsider.com/brokers-robinhood-charles-schwab-fractional-stock-trading-2019-12">fractional-share trading</a> last November, and it rolled out a simulated sports-betting offering last July."We have been in this business for decades, and everything we've ever done has always been copied," Thomas Peterffy, the co-founder, chairman, and former chief executive of Interactive Brokers, told Business Insider in a recent phone interview. "So you must excuse me, but I cannot tell you what's in the oven."On the firm's second-quarter earnings call last July, Peterffy had a colorful exchange an analyst around the simulated sports-betting game it recently announced. It was intended to attract new customers who may not have been familiar with the financial markets, but were "more familiar with the probabilities of spectator sports," the company said. An analyst asked Peterffy for more detail about the launch. "Your question seems to indicate to me that you haven't tried it," he responded. The analyst that he hadn't. "If any of you have any questions, I really would suggest that you try it," Peterffy said. "Now, once you try it and you play a few games, make a few bets, you will get to like the platform."The exchange went on like that for a few more minutes. The next month, ESPN and TD Ameritrade <a href="https://espnpressroom.com/us/press-releases/2019/08/espn-fantasy-football-no-1-game-gets-even-better-for-2019/">said</a> they were working together on a statistical trends tool for ESPN fantasy players.The wider brokerage industry used to compete on price, and benefitted from interest in trading single stocks. But passive investment ownership has exploded in popularity.Customers' changing tastes and standards for what they'll pay for are quickly raising the bar, and that's left <a href="https://www.businessinsider.com/category/interactive-brokers">Interactive Brokers</a> to try and set itself apart with the technology at the company's core.Meanwhile, Interactive Brokers and its competitors are under pressure to keep costs low, especially against ultra-low US interest rates that have already eaten into their their bottom lines.Charles Schwab chief executive highlighted those pressures at an <a href="https://www.businessinsider.com/charles-schwab-execs-on-td-ameritrade-digital-strategy-competition-2020-2">investor presentation earlier this month</a>. While he found incentives like offering cash rewards for opening brokerage accounts to be a "distasteful approach," his firm would have to be willing to match those offers or risk losing business.We spoke with Interactive Brokers insiders to learn more about the firm, and to try to get hints on what's next. <h2>Changing the guard (sort of) </h2>Interactive Brokers is headquartered in the wealthy Greenwich, Connecticut suburb, a short drive north from New York City. As of this month, it has some 1,600 employees in 24 offices in the US and 14 other countries, including Switzerland, Japan, Hong Kong, and Estonia.Operations looked much different four decades ago. Peterffy, who is 76, founded the firm in 1977 after moving to the US from Russian-occupied Hungary. At the time, he spoke no English.He began working as a computer programmer for a company that designed highways, he has <a href="https://www.interactivebrokers.com/en/index.php?f=16206">told</a> the Motley Fool website. Then he started working for a consulting firm, building out programs for Wall Street brokers that sorted stocks by measures like price-to-earnings and price-to-book ratios.He took a liking to pricing options, and learned about the market. Peterffy, then in his early 20s, bought a seat on the American Stock Exchange, which is now owned by Intercontinental Exchange. The predecessor to Interactive Brokers, Timber Hill, was formed. Timber Hill remains a subsidiary of Interactive Brokers, and three years ago <a href="https://www.businessinsider.com/two-sigma-securities-buys-us-options-business-of-timber-hill-2017-5">sold its US options market-making business</a> to a unit of the hedge fund Two Sigma. Interactive Brokers was officially incorporated in 1993."I started it with my savings," Peterffy said. "I grew it into a huge enterprise, and it's the only thing I know. It's what I've done all my life." The firm has long looked for carving out a niche with savvy investors who had a good handle on trading instruments more complex than a simple stock trade.Instead of "looking for a mass market in the US, we were looking for sophisticated investors and traders around the world, which is pretty much what we've been about," Steve Sanders, the executive vice president of product development and marketing, said in an interview. Today, Peterffy is worth $17.8 billion, and is the 69th-richest person <a href="https://www.bloomberg.com/billionaires/profiles/thomas-peterffy/">in the world</a>, according to the Bloomberg Billionaires Index. Investors and analysts have come to know him for flamboyant commentary, quipping about the industry and community in a way other executives often avoid. Mike Segar/ReutersThomas Peterffy, the founder of Interactive Brokers."George Soros is an enigma. He's a very bright man, and I absolutely do not understand why he behaves he way he does. I think he's basically an anarchist," he <a href="https://www.cnbc.com/video/2018/11/06/interactive-brokers-peterffy-george-soros-is-an-anarchist.html">said</a> of the investor and philanthropist in a CNBC interview.Peterffy stepped down from his chief executive post last year; he said in a <a href="https://www.businesswire.com/news/home/20190107005620/en/Interactive-Brokers-Group-Appoint-Milan-Galik-CEO">statement</a> in January 2019 that as he got older, he thought a longtime senior employee of the company, Milan Galik, would be better suited to lead.Galik joined the firm three decades ago, and became president in 2014. He has been a board member since Interactive Brokers' 2007 initial public offering.But Peterffy, who remains the chairman, is still very much the face of the company. The firm did not make Galik available for an interview for this article, and he was not on the fourth-quarter earnings call held last month.On the earnings call, an analyst asked Peterffy when he would begin unloading some of his stake in the company. He didn't have an answer. But he would be ready "very soon," he said. "It's an emotional thing." For the fourth quarter, Interactive Brokers reported $500 million in net revenue and $312 million in pre-tax income, up from $492 million and $309 million a year prior, respectively.Revenues from trading commissions dropped 18% in that time, while customer accounts rose 15% to 690,000 through December 31.<h2>Tech as a sole strategy</h2>These days, Interactive Brokers is trying to stay ahead with the tech it's always relied on to set itself apart. Peterffy's biggest challenge right now, he said, is ensuring the firm keeps innovating and coming up with new and better options for customers."We must be able to come up with ideas that resonate with people," he said, adding that he's "reluctant" to discuss new projects on his roadmap and risk giving competitors a chance to "win the game."Sanders, the executive vice president who joined the firm nearly 20 years ago, called Interactive Brokers a "technology company that's in the brokerage business" - a mantra and strategy it's doubling down on as competition has only ramped up in the industry.The majority of the company's employees are programmers, he said.This month, the firm released what it calls the Bond Scanner, which aims to help traders find the best prices for bonds in a simple way. Users can search the universe of bonds, including Treasuries; for corporate bonds, by industry, or by state, for municipal bonds.It's also recently rolled out a feature called Fundamentals Explorer, a tool that allows users to parse through an "enormous" set of Refinitiv-sourced data, said Brandon Weislak, a product manager at the firm.The feature allows users to view company information like balance sheet data, ESG scores, and analysts' ratings, and presents it in the context of historical trends and industry averages, he said in a recent interview in New York."There's been a pretty big push with within the company to make use of this ESG data and get it out to customers," Weislak said, referring to environmental, social, and governance framework.He added that its robo-adviser, called Interactive Advisers, has also launched ESG-focused portfolios. The firm's fractional share offering, which it announced last November, beat Fidelity and <a href="https://www.businessinsider.com/robinhood-stock-trading-app-rolling-out-fractional-share-trading-2019-12">trading app Robinhood's</a> offering to the market. And while Charles R. Schwab <a href="https://www.wsj.com/articles/schwab-in-bid-for-younger-clients-to-allow-investors-to-buy-and-sell-fractions-of-stocks-11571334424">hinted</a> in a media report four months ago that Schwab, the firm, would allow customers to trade fractions of stocks, it has not yet rolled out an offering. Interactive Brokers simulated sports-betting offering, first announced last summer, came months before <a href="https://www.businessinsider.com/td-ameritrade-exploring-sports-gambling-fantasy-sports-2019-11">Business Insider first reported that TD Ameritrade</a> was exploring that corner of the market."We are basically computer programmers. We are not experts of finance," Peterffy told us in a recent interview. "What we lack in expertise in finance we make up in our technology expertise."<a href="https://www.businessinsider.com/intelligence/10-up-and-coming-fintechs-2019?IR=T&amp;itm_source=businessinsider&amp;itm_medium=ctgr_bii&amp;itm_term=ctgr_leadgen&amp;itm_content=finance&amp;itm_campaign=10-up-and-coming-fintechs-2019-2"></a> <h3>NOW WATCH: <a href="https://www.businessinsider.com/robert-shiller-narrative-economics-compelling-stories-disrupt-2020-1">Nobel Prize-winning economist Robert Shiller explains how compelling stories are what really shape our economy - from bitcoin to Trump's presidency</a></h3>

Meet the Interactive Brokers execs who plotted industry-roiling moves in commission-free trades and fractional shares - and are keeping their next play top-secret

<div class="KonaFilter image-container display-table"><div><div class="image on-image">Oppenheimer Funds</div></div></div><ul><li>Smart beta is a rapidly growing area of the ETF market, as it allows providers to give an analytical slant to traditional fund indexing.</li><li>OppenheimerFunds offers a suite of ETFs that use a proprietary revenue-weighting methodology.</li><li>One of the firm's funds was recently named Smart Beta ETF of the Year by a trade publication.</li><li>We spoke to Sharon French, the firm's head of beta solutions, about her smart beta and the most pressing issues facing markets today.</li><li>She doesn't buy arguments that the rise of ETFs has suppressed stock market volatility.</li></ul> It's tough to stand out in the increasingly crowded <a href="http://www.businessinsider.com/category/etfs" target="_blank" rel="noopener noreferrer">exchange-traded fund</a> industry.New funds are launched every day as exchanges clamor to be the place where they're listed, all while investors flock in droves to the most appealing offerings.Once designed to simply track indexes, the focus of ETFs has broadened considerably. There are funds that replicate specific investment strategies or styles, while some <a href="http://www.businessinsider.com/ai-powered-equity-etf-stock-aieq-market-robot-revolution-2017-10" target="_blank" rel="noopener noreferrer">use advanced technology</a> in order to assess stocks for possible inclusion.Meanwhile, others seek to combine the passive approach of mirroring an index with a more active stockpicking approach - a strategy known as "smart beta." This particular area of ETFs is booming, as it allows providers to flex their analytical muscles, then overlay it onto a universe of companies. In an industry inundated with countless ideas, it's a way to offer something new, and investors have responded with great interest.That's where OppenheimerFunds comes in. The fund provider has introduced a novel approach to the ETF world, by first selecting the components of a specific index, and then weighting them not by market cap - the most common method - but by revenue. The firm's suite of 10 sales-weighted ETFs have a combined market value of more than $2 billion.In fact, the roughly $500 million <a href="http://markets.businessinsider.com/etfs/Oppenheimer-Ultra-Dividend-Revenue-ETF" target="_blank" rel="noopener noreferrer">Oppenheimer Ultra Dividend Revenue ETF</a> (ticker: RDIV) was given the Smart Beta ETF of the Year award earlier in 2017 by <a href="http://fundintelligence.global/fundaction/" target="_blank" rel="noopener noreferrer">Fund Action</a>, an online publication that covers the space. The fund includes the <a href="https://us.spindices.com/indices/equity/sp-900" target="_blank" rel="noopener noreferrer">S&amp;P 900</a> index securities with the highest trailing 12-month dividend yield, and then weights them by sales.<a href="https://www.oppenheimerfunds.com/advisors/personalities/sharon-french" target="_blank" rel="noopener noreferrer">Sharon French</a>, the head of beta solutions at OppenheimerFunds and a pioneer of the revenue-weighted approach, spoke with Business Insider about her firm's efforts on the revenue-weighting front, and shared some details around the genesis of their award-winning fund. She also shared some thoughts on overall market conditions, and addresses one of the biggest criticisms of ETFs.Here's what she had to say:This interview has been edited for clarity and length.Joe Ciolli: OppenheimerFunds has been a pioneer of the "revenue weighting" ETF strategy. Can you discuss how that came about, and why it's a good approach?Sharon French: We're the first and only firm to take this approach. It started back in 2008, and the first product was RWL (Oppenheimer Large Cap Revenue ETF), which revenue weighted the S&amp;P 500. If you're buying the S&amp;P, you're buying an index that, because of the market-weighted nature of it, has a propensity to get overly concentrated into a single stock or sector. That brings a lot of unintended risk to the strategy. This really is a much better long-term strategy that offers diversified exposure to the market, isn't as influenced by stock price and is a truer reading of a company's value.When you backtest it, you find that it's outperformed.It's an alternative weighting technique that really lowers the price-to-sales of your overall portfolio, which is very beneficial. Historically, low price-to-sales relative to market cap has been a better indicator of longer-term returns than other valuation measures.Ciolli: What does the future hold for this revenue-weighting innovation?French: We have a suite of 10 revenue-weighted funds, including those with large, mid, and small-cap focuses. We also have international, EM and global funds, as well as two with an ESG focus. And we have more revenue-weighted offerings scheduled for 2018.Ciolli: Stepping back from your specific products and looking at the big picture - the bull market is looking unstoppable as it goes into its ninth year - how does that shape your approach to things in the ETF business?French: Our view, based on certain key indicators that we follow very closely over time, is that this is an elongated US credit and business cycle that we believe will persist through the second half of 2017 and into 2018, with the caveat that risks are rising.Most of the risks are centralized in the US and really not in other major economies. The focus in the US is really centered on the Fed.The US unemployment rate is low, wages are climbing and the dollar is weakening, so our question is: when will the Fed raise rates, and what kind of impact will that have? That's really where we're focused.The Fed intends to reduce the size of its balance sheet, though it will likely be able to successfully navigate that process without issue. But the tightening monetary policy and the flattening yield curve must be considered in combination with elements like modest growth, heightened equity valuations and tighter credit spreads. They're typically not consistent with some of the outsized valuations and returns we're seeing in the market. Once that trigger event starts to happen, that's when we'll start to get more concerned.We think international markets are likely to outperform the US, and many international economies are in a better part of the economic cycle. Equity valuations are generally more attractive there, and policies are more certain.Ciolli: What do you make of the low-volatility environment? And how does it affect the approach of ETF providers such as yourself?French: There are different factors - low volatility included - that perform better during different types of cycles. Specifically looking at low volatility, it typically does better during a slowdown or contraction. We really haven't been in one. We believe that's somewhere out in the future, but not any time in the very near term. During times like this, we've found that growth and momentum strategies have done better. We take the different stages of cycles into account when developing ETF products, and help clients arrange their portfolios accordingly.Ciolli: What's your approach to that sort of portfolio construction? Do you recommend people hold a blend of multiple factors?French: We're introducing single factors, simply because our clients vary in terms of their approaches. They like to use the building blocks to construct a portfolio, depending on the type of market we're in. For example: Size and value tend to outperform during bull markets, while dividend and low-volatility do better during bear markets.Once you take a longer-term approach, you can either buy a multi-factor strategy off the shelf, or you can take what's available today with single factors. We do strongly advise that, instead of picking one or two to time the market, that you construct them according to the market environment, and potentially a shift that's either happened or is forthcoming.Ciolli: As a smart beta provider, how do you respond to the active managers who have blamed low market volatility on the rise of ETFs?French: To a large extent, I disagree that low volatility is being created by ETFs.There is no single resounding explanation to the lower levels of volatility we've seen recently. You will still see spikes in volatility due to market-related or economic events.When you think about smart beta, it really combines a lot of the attractive benefits of the three main areas of investing: active, passive and alternatives. What I'm finding is that active managers are starting to appreciate that. I feel like it's a tool for better risk management of the portfolio, and better risk-adjusted return at the end of the day.Ciolli: What about your ESG offerings? How would you describe your approach there?French: We consider incorporating elements of environmental, social and governance within our investment analysis as a fiduciary responsibility of ours, and it's a key focus of our firm. It really starts with our fundamental active strategies, and then applying these elements to the process where it makes sense.Incorporating elements of environmental, social and governance within our investment analysis is a fiduciary responsibility of ours, and it's a key focus of our firm. It really starts with our fundamental active strategies, and then applying those three elements to them.We did introduce, in different wrappers, two ESG funds, and purposely made them broad-based, utilizing both the domestic and global markets. We were getting a lot of client demand looking for ESG opportunities in both areas.Overall, we have a very full research pipeline that we're working through and sequencing which products we'll offer next. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/bitcoin-price-debate-rages-speculative-bubble-2017-10">The bitcoin debate rages on</a></h3> <div> </div> </div>

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