What we’re reading (9/12)
“In A Huge Blow, Judge Rules Apple Can't Force Developers To Exclusively Use Its App Store Payment System” (CNN). “Apple can no longer prohibit app developers from directing users to payment options outside its App Store, a judge ruled on Friday. The decision, which followed a contentious court battle with the maker of the hugely popular Fortnite video game, is a major blow to Apple — but the company also scored a partial victory as the judge stopped short of calling it a monopoly.”
“Natural-Gas Market Conditions Look Unnatural” (Wall Street Journal). “U.S. Henry Hub natural-gas prices, at around $5 per million British thermal units (MMBtu), have more than doubled from a year earlier. When the benchmark broke the $4 mark in early August it was a rare milestone—especially so far ahead of the winter heating season…[a] severe winter in the U.S. could mean that domestic markets may have to compete with hungry Asian and European buyers. If European and Asian natural-gas prices stay at their current levels, both Mr. Brownell and Luke Jackson, analyst at S&P Global Platts, figure that Henry Hub prices would have to jump to $10 or more to provide an incentive to fulfill domestic natural-gas demand. Prices haven’t been that high since 2008, when the U.S. was producing about 40% less natural gas.”
“Asset Managers Are Doing Great” (Institutional Investor). “The combined revenue of the 27 publicly traded managers analyzed by the asset management consultant jumped by 34.2 percent from a year earlier. Their total AUM reached $32 trillion in the second quarter, rising 5.5 percent year-over-year. Private market managers have outperformed their public market peers due to fewer fee pressures…[p]rivate asset managers are less sensitive to fee pressure because their clients don’t have low-cost substitutes..[p]assive investment products like exchange-traded funds gained more popularity during the pandemic, pressing asset managers trading in the public markets to lower their costs.”
“The Incredible Shrinking Fee” (Morningstar). “[I]n 2020, the asset-weighted average fee--so, effectively the average fee paid by investors to invest in mutual funds and ETFs--came in at 0.41%. Now that was down from 0.44% in 2019. In dollars and cents, that amounted to effectively $6.2 billion collectively worth of fund fee savings, savings that were pocketed by investors and put back to work in the market, savings that will continue to compound to their benefit for the foreseeable future. Now, if we take a step back further, what we see is that 0.41% asset-weighted average fee is now less than half of what investors paid for funds going back two decades. So, there's been meaningful progress that's been made over the course of the past 20-plus years.”
“How the High SKEW Index Can Help Skewer Bubble Fears” (Fisher Investments). “[T]he CBOE SKEW Index…is touching record highs. Some see this as a warning sign of volatility ahead. We see it quite differently—as a sign investors aren’t blind to the alleged ‘risks’ some say stocks are ignoring. The SKEW is an odd indicator from the options pits that generally garners scant attention until it goes bananas. The Chicago Board Options Exchange—CBOE, the inventor of listed options trading and creator of the more widely watched CBOE Volatility Index or ‘VIX’—launched SKEW in February 2011 as a way to track perceived risk of a major market drop. To do so, the index aims to determine investor demand for hedging against an S&P 500 decline. It compares the cost to buy call options on the S&P 500 Index versus put options on the same, rising when put costs exceed calls.”
