2024-07-01 10:39:49 ET
Summary
- CME Group faces challenges with new competitor FMX Futures Exchange entering U.S. interest rate futures market.
- FMX has strong partners and technology, which could lead to FMX taking market share away from CME, impairing CME's moat over time.
- In my view, this may have a negative impact to CME volumes, limiting future revenue growth and eroding margins on the pricing side.
- While the company trades at a discount to its historical multiple, I would avoid buying the stock for now.
Introduction
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CME Group: FMX Market Entry Poses Real Risk