Companies will have to show how much more their CEO makes than everybody else
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The US Securities and Exchange Commission is about to require companies to show investors how much more the CEO makes than the median employee. SEC Commissioner Kara Stein said in a statement, "Pay ratio disclosure should provide a valuable piece of information to investors and others in the marketplace." According to Reuters, opponents of the rule say it's not material information and would be too expensive for companies to produce.
Past results tell you nothing about the future (Business Insider)
Investors who are looking at past performance to project future results are making a mistake. "We find no relationship between historical five-year returns and subsequent 12-month returns," wrote Bank of America Merrill Lynch's Savita Subramanian. A regression run by Subramanian's team found an R-square of 0.0002, which is about as low as a statistical relationship gets.
Fed Funds futures say it's more likely than not the Federal Reserve will raise interest rates in September. Tuesday's hawkish comments from Atlanta Fed President Dennis Lockhart and Wednesday's strong ISM Services PMI reading have futures pricing in a 52% chance the Fed will move in September. According to Bloomberg, "The likelihood of a Fed increase is based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase."
Financial services firms are pushing a cybersecurity bill (Think Advisor)
A lobbyist group for the financial services industry is asking the Senate to pass the Cybersecurity Information Sharing Act, which would make it easier to share information about cyber threats. According to those who support the CISA, it would allow public and private sector entities to work together in combating a significant threat to the economy. However, not everyone is on board. Sen. Ron Wyden, D-Ore. said the CISA is "a flawed bill that threatens Americans' privacy without making our personal information any safer."
MetLife is fighting back against LPL (Investment News)
MetLife has seen a tide of brokers leave for LPL Financial, and now it's fighting back. According to an arbitration claim filed by MetLife, LPL has conducted an "illicit, premeditated conspiracy" by poaching 60 of its brokers since October. According to Investment News, MetLife didn't specify the damages it was seeking, but wants LPL to be "enjoined from soliciting any MetLife brokers or customers."
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