July 21, 2023
Fed Launches FedNow Payments System for Instant Transfers
📰 News Organizations
Fed Launches FedNow Payments System for Instant Transfers. The Federal Reserve introduced the FedNow system, allowing quick and 24/7 access to bill payments and other consumer or business transfers. Officials have said it could take a couple of years before the system gains more-widespread adoption and its capabilities are more fleshed out.
FTC to Pause Microsoft Merger Trial, Opening Door to Settlement Talks. The step is a win for Microsoft and Activision as they seek to close the largest-ever gaming deal despite regulatory challenges in the US and the UK. On Tuesday, the companies asked the FTC to withdraw the case, which has been scheduled for trial in August before its administrative court.
Elliott Acquires Significant Stake in Catalent. Activist shareholder Elliott Investment Management has taken a substantial stake in contract drugmaker Catalent and is seeking board changes. The investment firm is engaging potential director candidates to run in a proxy contest for board positions.
TSMC Reduces 2023 Revenue Outlook Amid Delays to Key U.S. Project. TSMC's unexpected cut in 2023 revenue projections signals continued challenges in the global electronics industry despite AI development growth. The delay in a significant U.S. project highlights difficulties in domestic chip manufacturing despite efforts to reduce reliance on Asian facilities.
Johnson & Johnson Beats Earnings Expectations, Raises Full-Year Guidance. Strong sales growth in the medtech business has driven Johnson & Johnson's earnings above Wall Street's expectations. The company raised its full-year sales forecast, now projecting higher revenues between $98.80 billion and $99.80 billion.
Nasdaq Halts Plan to Launch Crypto-Custodian Business in US. Nasdaq suspended the launch of its U.S. digital assets custodian business and the pursuit of relevant licenses due to the evolving regulatory landscape in the country, according to CEO Adena Friedman. Crypto's custody challenge is viewed as crucial for institutional adoption and the industry's growth in a post-FTX world.
June existing home sales -3.3% m/m vs. -2.1% est. & +0.2% prior; surge earlier this year looks (as of now) to have been temporary. Number of homes for sale at 1.08 million, which is the lowest June inventory on record. Median selling price down slightly from a year ago but still high at $410,200. Source.
The squeeze is feeble: With the dollar weakening and equities rallying, financial conditions have now loosened all the way back to the spring of 2022 levels, when the Fed had barely begun tightening. Source.
US equities will deliver annualized total returns of 4% over the next decade, much lower than the 12% seen in the previous 10 years: Bernstein's Sarah McCarthy and Mark Diver. Source.
The percentage of homes selling above their list price peaked in March 2022 when over half went above the list price. After bottoming in January, this metric is moving up. Now one-third of homes are selling above list. This is still higher than anything seen pre-pandemic. Source.
Leading Economic Index from Conference board fell in June by -0.7% m/m, worse than -0.6% in prior month. Year/year decline (shown in chart) slipped to -7.8% and continues to be consistent with declines in prior recessions. Source.
📓 Online Publications
Multiple Crypto ETF Applications Submitted to Federal Register. BlackRock, Fidelity, Invesco Galaxy, VanEck, and WisdomTree have submitted notices of proposed rule changes for Bitcoin ETF applications to the Federal Register. The SEC now has the opportunity to review and approve or reject the requests.
XRP Surges, Altcoins Rise, and Bitcoin Dominance Declines. XRP continues its winning streak, outperforming Bitcoin and benefiting from a favorable ruling in its SEC court case last week. The decision has spurred a number of exchanges such as Coinbase, Kraken and Bitstamp to relist XRP.
Polygon Introduces POL Token to Replace MATIC. The new POL token would accrue staking fees from securing Polygon’s proof-of-stake chain. According to Polygon Labs, POL will be more productive than ETH because holders will be able to validate multiple chains.
Binance Labs Invests $10 Million in Radiant Capital. Binance Labs commits $10 million to cross-chain DeFi lender Radiant Capital. The funding round is part of Binance Labs’ commitment to support the next era of DeFi. Radiant is built on top of LayerZero, an interoperability protocol enabling multiple blockchains to communicate with each other.
Uniswap Releases UniswapX DEX Aggregator Protocol.Uniswap introduces UniswapX, an aggregation protocol designed to allow third parties, called “fillers,” to compete to execute users’ trades at the best prices. It cites protection against maximal extractable value (MEV), and gas-free swaps, as other benefits of UniswapX.
Tesla Posts Record Q2 Revenue. Tesla beat on the top and bottom lines, reporting revenue of $24.93 billion and earnings of 91 cents per share, adjusted, for the quarter ending June 30, 2023. Tesla shares were down as CEO Elon Musk and other execs on the earnings call warned production would slow down during Q3 due to shutdowns for factory improvements. Source(5:01)
Netflix’s Password-Sharing Crackdown Pays Off. Netflix added 6 million new subscribers last quarter, more than double what analysts expected. The streaming service released its second-quarter earnings and said that its crackdown on password sharing contributed to subscriber growth. Revenue rose last quarter, but it came up short of forecasts. Source(1:21)
UK Inflation Falls More Than Expected To 7.9% In June. The market is definitely happy about the number, 7.9 percent in June. Last time around it was 8.7 and the market had been expecting 8.2 so it’s an even better number than people had hoped for. Some investors are expecting this as a turning point for the country. Source(1:57)
Fed Purposely Raising Rates Late. Raoul Pal thinks the Fed is purposely raising rates late into the cycle because they want inflation as low as possible so they can cut rates as low as possible when it comes to the debt refi cycle. The debt refi cycle comes toward the backend of this year so he thinks we'll see monetary printing and cutting of rates coming around that period of time. Source(6:24)
Housing Affordability Remains Dangerously Close to 37-year Low. Despite the Federal Reserve's attempt to cool the market, the challenge of the Fed now is to chart a path forward toward a soft landing without reheating the housing market and reigniting inflation. Jason Hartman thinks that there's a low chance of that happening. When the Fed pivots, the housing market is going to catch fire again. Source(10:41)