Above the Fold

Amazon Takes on the World’s Second-Largest Exchange 

For many years, most major stock, option and bond exchanges around the globe have housed their own servers, hardware and software in specific locations (data centers), allowing them full control of sensitive data and potentially crippling failures that could result in systematic panic or the inability to exit or enter trades at critical times. Nasdaq Inc., the world’s second-largest exchange, also offers technology that powers more than 100 marketplaces worldwide. It is also moving its trading markets to Amazon’s Web Services (AWS) cloud-computing platform. 

The migration will happen in phases, starting with Nasdaq MRX, an options market. The company has previously indicated that all of its 25 marketplaces will be hosted in the cloud within the next 10 years. The move comes as the CME Group Inc. recently struck a deal with Alphabet to move its core trading systems into the cloud as well. Nasdaq already stores a ton of data with AWS, but the move to host its live trading operations is a much bigger, bolder undertaking. 

There will be some technological challenges for sure, but the goal is to obviously improve reliability, decrease latency (remember Flash Boys?), and hopefully increase security and scalability for the exchange and its competitors. Amazon’s recent outage certainly raises questions around reliability as Amazon’s cloud-computing unit was down for hours on Tuesday.

Three Things 

1. Labor Market Remains Wide Open – According to recent estimates from job-search site Ziprecruiter.com, there are more than 11 million job openings in the U.S. right now; the highest in history. Compared to Bureau of Labor Statistics (BLS) data, that means the number of open positions now outpaces the number of available workers by nearly 5 million. The widening gap comes as more Americans quit their 9-to-5 jobs to be their own boss. 
2. Tesla Says “Game-On, Drivers” – Passengers and drivers will now be able to play video games on Tesla’s big main screen … while the vehicle is in motion. While there is a prompt that makes the user affirm “I AM A PASSENGER,” the enablement raises serious questions around safety, especially at a time when Tesla is still dealing with investigations around its autopilot accidents. The National Highway Traffic Safety Administration (NHTSA) is currently “discussing” the in-motion game-playing issue with the company after dozens of complaints.
3. Evergrande Misses Major Payments – China Evergrande Group, the world’s most indebted real-estate firm, missed $82.5 million in two sets of dollar-denominated bonds that were due back on Nov. 6. With more than $300 billion in liabilities, the company is said to be at the start of a managed restructuring, which likely means they will default on their debt. Most of the debt is held within China, but there’s nearly $20 billion in international bonds outstanding as well. We don’t expect too much turbulence from a default, as much of this has been telegraphed and Beijing is already taking steps to counter its effects. 

Did You Know? 

America’s First Stock Exchange

The Philadelphia Stock Exchange (PHLX), originally called the Board of Brokers of Philadelphia, was founded in 1790, two years before the New York Stock Exchange. It was originally located at the Merchants Coffee House, which is now known as the City Tavern at the corner of 2nd and Walnut Streets. The PHLX was acquired by the Nasdaq in 2007 for $652 million; the merger created the third-largest options market in America.