Today in the Market (6/6/2023)

Good Evening! On Tuesday, the U.S. stock market closed up approaching a new bull market. Also, investors await the upcoming Federal Reserve meeting scheduled for next week.

The S&P 500 saw a 0.24%, while the Dow Jones experienced a very small gain of 0.03%. Lastly, the Nasdaq Composite rose by 0.36%.

THE SEC DOES NOT PLAY AROUND

The Securities and Exchange Commission (SEC) filed a lawsuit against Coinbase (COIN), accusing the crypto exchange of operating as an unregistered exchange and broker, resulting in a 12% decline in the stock.

Let’s get into the details… The SEC filed a lawsuit in federal court accusing COIN of violating securities regulations by failing to register with the SEC prior to conducting business in the U.S. The SEC alleges that COIN operated as an exchange, brokerage, and clearing agency without registering with the agency.

The SEC is coming after other companies as well… This lawsuit was followed by a lawsuit against Binance Holdings, which currently is the largest cryptocurrency exchange globally. Just like COIN, Binance committed comparable violations such as its failure to register as an Exchange, broker, or clearing agency

A SLOWDOWN ACROSS THE BOARD

According to World Bank’s projections… the global growth rate is anticipated to decelerate in 2023, by reaching its lowest level since the 2008 Financial crisis. This deceleration is attributed to the continued rise in interest rates, inflation, and the stricter credit environment

But, by how much? The Global Economic Prospects report by the World Bank states the growth rate is anticipated to decline from 3.1% (2022) to 2.1% in 2023.  The report highlights a substantial slowdown in the second half of 2023. There is some difference in the slowdown compared to 2008. The report states that growth in developed countries will exceed the growth rates in 2008. However, growth rates are expected to be lower in emerging markets.

It could get worse according to the World Bank… the possibility of a further decline in global growth will continue if there is a worsening in banking stress or if inflation persists, leading to an increase in interest rates beyond the expected level. This poses a challenge for emerging markets, which were already struggling with the compounded impacts of the COVID-19 pandemic and the incursion of Russia into Ukraine.

 

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