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Bloomberg Markets Magazine

Bloomberg Markets Magazine April/May 2018

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Bloomberg Finance LP
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in this issue

7 min
does the world really need an ai-powered dark pool?

MATHEMATICAL FORMULAS, scrawled in red and black, cover a glass wall. The office is small, but the three men who work there, dressed in jeans and sneakers, hovering around an array of computers, have big plans. They want to run a stock market, and they say they and their algorithms can do what even their leanest competitors would need 80 human beings to achieve. Kelly Littlepage, Stephen Johnson, and Richard Suth have rented a 240-square-foot office in a building on a quiet side street in Lower Manhattan. Next door, a shop sells black leather motorcycle jackets (“Ride or Die”) and retro lamps made from old cassette tapes. The three entrepreneurs say their company, OneChronos, will fundamentally alter the business of buying and selling stocks established more than two centuries ago by…

2 min
can anything stop clean energy stocks?

You might think President Trump’s environmental policies, so widely decried by conservationists, would be toxic for clean energy stocks. If so, then why did those stocks generally soar during his first year in office? Take the case of the WilderHill New Energy Global Innovation Index, or NEX, which lists low-carbon and renewable-energy companies from around the world. Trump initiated a number of policies that would seemingly damp the performance of those kinds of companies. And yet during the first year of the Trump presidency, the NEX rose 28.5 percent, outpacing the S&P 500, which climbed 23.7 percent. Indeed, the NEX’s climb began on Nov. 14, 2016, shortly after Trump won the election, and didn’t peak until late January of this year, when some of its component stocks were hit by the global sell-off…

25 min
jin liqun: “this isn’t just about china”

JIN LIQUN MAY NOT BE a household name (yet), even though he has one of the most challenging and important jobs in global finance. Jin, 68, is the inaugural president and chairman of the Asian Infrastructure Investment Bank. The AIIB, a Beijing-based multilateral development bank that opened for business in January 2016, is an embodiment of China’s aspirations to play a major role in the international financial system. Because the Chinese government is the bank’s biggest shareholder, policymakers in Washington, Tokyo, and elsewhere question whether China is trying to displace the longtime heavyweights in the field—the World Bank and the Asian Development Bank—and pursue its own geopolitical interests in Asia. Jin insists the AIIB is independent. Like many during Mao Zedong’s Cultural Revolution, Jin spent part of his youth in…

9 min
surfin’ the yield curve

THE DRIVE INTO NEWPORT BEACH can feel like getting lost inside an endless summer of money—especially along the Pacific Coast Highway, winding past billion-dollar hills that plunge to white sand beaches and the sparkling blue ocean. It’s easy to forget this was once the California of John Wayne, who moved here in the 1960s (when he could still afford it, as he later joked). Back then oranges actually grew in Orange County. These days it sometimes seems it’s money that grows on trees. That spread next to the Duke’s old place? Nicolas Cage bought it and then sold it in 2008 for $35 million. Even so, on a foggy morning on the Balboa Peninsula, watching surfers shred the Wedge, you can still sense the Brian Wilson, SoCal strains that sang to a…

2 min
how to compare climate risk across the biggest oil companies

ENERGY COMPANIES COULD WASTE a massive $1.6 trillion by ignoring climate risk, according to a study by London-based nonprofit Carbon Tracker Initiative. To find out which oil and gas producers are most exposed to these risks, use a new app on the Bloomberg terminal that compares companies across the relevant metrics. The 2D Scenario Analysis Tool looks at 68 companies in the S&P Global Oil Index through a climate change lens. It starts with a hypothetical: Let’s say the world manages to act to limit the rise in average global temperature to 2 degrees Celsius (hence the 2D). To do that, demand for fossil fuels will need to fall. It then asks: How would that affect the oil companies? The analysis divides each company’s assets into two categories: those that may…

6 min
industry focus esg

POWERED BY BLOOMBERG INTELLIGENCE AND BLOOMBERG NEW ENERGY FINANCE Socially responsible assets and funds grew significantly over the last year, as more investors looked for strategies that included progressive environmental, social, and governance (ESG) criteria. In the following pages and at {BI ESG }, Bloomberg looks at the growth of this style of investing—and checks in on the progress toward its goals. 1 The Market Is Getting Bigger (But It’s Still Niche) Pension funds and millennial investors helped drive new demand for environmentally sound and socially conscious investment strategies. ESG assets rose 37 percent in 2017 from the year before, not only riding the rally but also outpacing most broad market indexes, according to Bloomberg Intelligence. The number of sustainable funds created last year was twice that of 2014. Yet traditional investment vehicles…