Stock market news today October 17

Welcome to Finance Insider, Business Insider’s summary of
the top stories of the past 24 hours. Sign up here
to get
the best of Business Insider delivered direct to your
inbox.

Investors are doubling down on a trade that blew up in
their faces earlier this year — here’s what Morgan Stanley says
they should do instead

Traders refuse to throw in the towel on the controversial
short-volatility trade that’s come under pressure multiple times
this year.

Morgan Stanley lays out why the trade is so ill-advised,
especially amid current conditions, and offers alternative
solutions.

The Bank of England is sounding the alarm on a quiet
corner of the debt market now worth $1.4 trillion

The Bank of England on Wednesday
raised the alarm about the growth of so-called leveraged
loans in the UK, saying that the sector’s rapid growth should
be a cause for concern for policymakers and market participants
going forward.

In the bank’s record of the October meeting of its Financial
Policy Committee— the body tasked with ensuring financial
stability in the UK — the BoE mentioned leveraged lending almost
20 times, variously calling it “concerning” and likening it to
what happened in the USA with sub prime mortgages in the run up
to the financial crisis.

At their most basic level, leveraged loans are loans extended to
people and companies with either pre-existing high levels of
debt, or a poor credit rating. These loans, therefore tend to
have higher interest rates meaning that rewards for lenders are
higher, while the risk of default is also higher due to the
nature of the customers.

Leveraged lending to corporates has ballooned in recent years,
with the global market reaching a value of around $1.4 trillion,
according to recent estimates. In the UK alone, £68 billion ($90
billion) of these loans have been issued in the last two years,
the Bank of England said on Thursday. This represents around 20%
of total UK corporate debt, when also including high yield bonds.

Pfizer to cut around 2 percent of jobs through early next
year

U.S. drugmaker Pfizer plans
to reduce its global headcount by around 2 percent through
voluntary retirements and layoffs this year and early next year,
as it looks to streamline its corporate structure and eliminate
some managerial roles and responsibilities.

Pfizer has around 90,000 employees worldwide.

The move follows the announcement earlier this month that
Chief Operating Officer Albert Bourla would succeed Ian Read as
chief executive in January. The company also added new
responsibilities for many of its top managers and hired a new
chief digital officer.

Powerful Facebook investors just co-filed a proposal to
take down Mark Zuckerberg as chairman

Four powerful institutional Facebook investors have co-filed a
shareholder proposal to take down Mark Zuckerberg as chairman
following what they say was his “mishandling” of several scandals
this year.

New York City Comptroller Scott Stringer, Illinois State
Treasurer Michael Frerichs, Rhode Island State Treasurer Seth
Magaziner, and Pennsylvania State Treasurer Joe Torsella
are
joining forces to pile the pressure on Zuckerberg.

They have put their names to a proposal, originally filed by the
activist investor Trillium Asset Management, demanding that
Facebook appoint an independent
chairman. Business Insider first reported on
the proposal in July.

In markets news