Today in the Market (1/10/2023)

Good Evening! Even as Wall Street received hawkish rate talks from Federal Reserve officials and inflation comments from Fed Chair Jerome Powell at an event organized by Sweden’s central bank, U.S. equities finished higher on Tuesday.

The S&P 500 increased by 0.70%, while the Dow Jones gained 0.56%. The Nasdaq Composite rose by 1.01% for the third consecutive day.

THE THIRD ROUND

In a filing with the SEC, Coinbase Global (COIN) disclosed that it will lay off nearly 20% of its employees, or around 950 employees, as part of broader cost-cutting efforts in response to persistent volatility in the cryptocurrency market.

Third time’s a charm? With this third wave of layoffs, the business has eliminated 2,110 positions since June 2022 and anticipates a 25% reduction in operational expenditures for the first quarter of 2023 compared to the last quarter of 2022. The corporation said that the total cost-cutting strategy would be completed by the second quarter of this year.

How pricey will it be? Coinbase forecasts its entire restructuring expenditures to be between $149 million – $163 million. This was further broken down into cash expenses of $58 million – $68 million for employee severance and termination benefits, and stock-based compensation payments of $91 million – $95 million.

A very common theme… According to an annual forecast by The Block Research, crypto businesses have laid off about 9,500 employees between 2018 and 2022. This includes Crypto.com (2,260), Kraken (1,100), and Robinhood (1,060), the total also includes lenders Celsius (150) and BlockFi (250), the latter of which has since filed for bankruptcy.

USED CAR SALES FALL

https://publish.manheim.com/content/dam/consulting/ManheimUsedVehicleValueIndex-BarGraph.png

The instability of the used automobile market continued in 2022, but car purchasers may get some comfort this year.

In December, the Manheim Used Vehicle Value Index (MUVVI) recorded a 0.8% gain in vehicle prices month over month, but a massive 14.9% loss year over year, the greatest annualized price decline in the index’s 26-year history.

However, it is the opposite for the new car market. Continuing the consistent pattern seen earlier in 2022, sales of new vehicles have been the greatest. BMW (BMW.DE) maintained its position as the leading premium brand in the world, surpassing Mercedes-Benz. While both brands had a fall in sales year-over-year owing to shutdowns and the effect of the Russian conflict in Ukraine. They both experienced significant sales rise in the fourth quarter, indicating a return to normality and recovery.

The new car market is catching Wall Street’s attention as well. Bank of America has added Ferrari (RACE) to its list of greatest car ideas for 2023, demonstrating Wall Street’s participation in the luxury market.

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