Stocks were in the red again today with the Dow Jones having its biggest single day drop since 2020. Speaking of Wall Street, FTX is testing stock trading functionality on its platform, and the SEC targets unregistered crypto exchanges, while the Commodity Futures Trading Commission focuses on fraud and manipulation in crypto. And this is your nightly crypto news wrap-up. Let’s get it! On the heels of Walmart and Target reporting lower-than-expected profits, futures on the Dow Jones fell 430 points.
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This amounts to a 1.5% loss for the Dow. And Nasdaq futures fell 1.7%. This has been the biggest one-day drop in the Dow Jones since 2020. Quarterly reports from Target and Walmart might be showing that consumers are under pressure from inflation and higher gas prices and that they’re spending less money. On the other hand, Home Depot and Lowe’s reported stronger earnings, suggesting it’s not that consumers aren’t spending.
They’re just spending differently. Yesterday, Walmart fell another 7% and was down over 11% already on Tuesday, and Target had its worst day in 35 years. Expectations for Walmart and Target earnings reports were high even though we had some foreshadowing in late April when Amazon reported showing revenue growth. Stock prices fell overseas as well, with markets in Japan, South Korea and Europe taking a hit. Guggenheim Partners Global Chief Investment Officer told CNBC he believes stocks will go meaningfully lower this year before we find a bottom. Earnings reports coming this week include BJ’s Wholesale, Kohl’s, Applied Materials and Ross. Results will give more clarity on consumer spending.
FTX is trying its hand at the TradFi game, testing stock trading functionalities on their platform with some US users. President of FTX, Brett Harrison, said that their goal is to offer holistic investing services for customers across all asset classes. FTX has already submitted a proposal to the Commodities Futures Trading Commission to directly clear its customers’ margin-backed swaps without an intermediary. No timeline has been given on a wider rollout of stock trading on this platform, but future plans indicate customers will be able to fund their accounts with USDC, meaning that the same stablecoin asset used to trade crypto will also be used to trade stocks.
This announcement comes not long after FTX CEO Sam Bankman-Fried purchased 56 million Robinhood shares, giving him a 7.6% stake in the company. SEC chair Gary Gensler has zeroed in on crypto once again, this time, targeting unregistered crypto exchanges. During Wednesday’s testimony before Congress, Gensler said that crypto exchanges should come in and register, or, frankly, he said they will use what Congress has given them in our enforcement and examination functions. Rep. Steve Womack called out the SEC for failing to create an explicit set of rules for crypto and said they’re throwing flags without anyone knowing the rules. So far, the SEC has brought over 80 enforcement actions against crypto, and Gensler believes the rules are clear. If you’re raising money from the public, and the public anticipates a profit based on the efforts of that sponsor, that’s a security. He said that he doesn’t have the manpower dedicated to crypto regulation and said that more resources are needed to protect crypto consumers from themselves. I mean, from unprecedented risk.
His statements come on the tale of last week’s collapse of LUNA and UST. The Commodities Futures Trading Commission Chairman Rostin Behnam is focusing on fraud and manipulation in crypto. He believes millions of dollars are lost in phishing attacks, protocol exploits, preying on vulnerable people and other schemes. The CFTC has filed over 50 enforcement actions since 2015, with 23 of those happening in the last year. Behnam said over half of those were allegations relating to fraud. He’s calling for regulations that will make crypto markets more transparent, safer and resilient. His belief is that crypto markets would benefit from federal regulatory oversight.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/bABJKevanMA