The Japanese Yen has appreciated dramatically in the aftermath of US CPI coming in softer than anticipated. It gained around 1.6% against the US Dollar in the North American session, with USD/JPY trading as low as 134.03 at one stage. The US Dollar is weaker against every major currency. For the record, the headline US CPI printed at 8.5% year-on-year to the end of July instead of the 8.7% forecast and 9.1% previously. Core US CPI was the same as the prior month at 5.9%, but lower than the 6.1% anticipated. US yields initially dipped across the curve on the news but then retraced most of the slide after Fed speakers hosed down hopes of rate cuts next year. Federal Reserve Bank of Minneapolis president Neel Kashkari ruminated that he would like to see the Fed funds rate at 3.9% by the end of this year and at 4.4% by the end of 2023. He also said that the soft inflation data doesn’t change the Fed’s rate path. Since he joined the Federal Open Market Committee (FOMC) in 2015, Kashkari leaned toward a dovish stance. At the outbreak of the pandemic, he became more flexible, making his hawkish views particularly noteworthy.
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Professional money managers have a strong preference for one stock sector in particular, along with cash dividends. A group of 100 institutional money managers surveyed by S&P Global Market Intelligence favours the healthcare sector and dividend stocks for defensive allocation. The S&P 500 Index has rallied 10% since June 22 from a deep decline, but there are different schools of thought about whether investors are out of the woods yet. Mark Hulbert has called the recent action a bear-market rally, setting the stage for the stock market to resume its slide. Meanwhile, analysts at BlackRock recommend investors lean toward defensive stocks. One way to do that is to focus on the healthcare sector. This is generally considered a defensive group of stocks — after all, the population is ageing, innovation creates new treatments and medical attention is not an option for most people. A screen of health-care-sector stocks in the S&P 500 SPX, +2.13% is below. On Aug. 8, S&P Global Market Intelligence published results of a survey of money managers who oversee about $845 billion of investors’ money. This group of about 100 institutional investors remains “risk averse,” according to S&P Global, which went so far as to say that its Global Investment Manager Index indicated “overall sentiment” had its lowest point in the survey’s history.
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Social Security recipients are on pace to receive the biggest raise in more than 40 years for 2023, although cooling inflation has brought the projection down slightly from prior estimates. The projected cost-of-living adjustment, or COLA, for 2023 is 9.6%, according to the Senior Citizens League. That bump would raise the average retiree benefit of $1,656 by $158.98, according to the organization. The Social Security Administration will announce the actual adjustment for 2023 in October, based on a calculation that compares the average consumer-price index from the third quarter of 2022 with data from the same period last year. Wednesday’s estimate factored in consumer prices from July, which rose at 8.5% over the same time last year. That was down from 9.1% in June, largely due to falling energy prices. A fat raise would be good news for the roughly 51 million people who collect Social Security retirement benefits. But it will still fall short of many recipients’ needs. The 5.9% COLA for 2022 proved no match for this year’s inflation, so many have had to dip deeper into savings to cover higher prices on essentials like gas and groceries.
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Amid a more saturated U.S. market, one analyst sees Disney and other streaming players ‘pivot to a new wave of sobriety’ Disney is raising prices across a variety of its streaming offerings, suggesting that the company has become more focused on streaming financials than absolute growth. Walt Disney Co. plans to raise prices on various streaming offerings as it gears up for the Dec. 8 launch of an ad-supported tier, marking the latest sign that the streaming market isn’t what it used to be. Whereas media companies once rushed to launch new services and grab new subscribers with flashy offers, they seem to be taking a more financially focused approach in light of a more saturated U.S. market. Disney’s DIS, +3.98% Wednesday afternoon earnings report marked a coda of sorts for the media industry, with MoffettNathanson analyst Michael Nathanson noting that now all the June-quarter streaming results are in for major players. And, indeed, growth for the industry was muted, with Nathanson noting an aggregate of just 2.7 million domestic streaming additions across the industry, most of which could be attributed to Paramount+ and an “undetermined number of free-trial [subscribers]” at that service.
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Shares of Coinbase Global fell sharply on Wednesday after the U.S. Securities and Exchange Commission warned that it would sue the crypto exchange company if it went ahead with a plan to allow users to earn interest by lending crypto assets. Beyond the blow to the growth plans of Coinbase (ticker: COIN), the move by the SEC signals a new phase in its enforcement actions. The agency is now questioning whether some of the fastest-growing parts of the crypto industry are legal at all. In particular, the SEC and other regulators seem concerned about crypto companies offering high-interest rates for people to lend out their assets, a service traditionally performed by banks.“The SEC has been flirting with crypto regulations for some time, but today’s news of Coinbase receiving a Wells notice from the SEC feels very much like the first salvo of a long and drawn-out conflict that may engulf the whole space,” said Webull CEO Anthony Denier, whose brokerage offers crypto trading.
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Coinbase Global had at least one bright spot in a dismal quarter: commissions earned from “staking,” where investors can earn yield by locking up certain cryptocurrencies. The problem? Coinbase (ticker: COIN) says that very program is under scrutiny by the Securities and Exchange Commission. The company’s quarterly filing on Tuesday expanded the list of topics on which it says the SEC has sent it investigative subpoenas or other document requests. New on the list was the company’s process for listing assets, the classification of certain listed assets, and its staking programs. That added to queries shown on the company’s first-quarter report surrounding its yield-generating products and stablecoin. The company, in its shareholder letter, said that in May it received a voluntary request for information regarding its listings, a probe which had already been widely reported. The letter didn’t address the staking program inquiry. A Coinbase spokeswoman didn’t answer queries on why staking was added to the disclosure this quarter but pointed to a section of the company’s shareholder letter that said the company often provides input to policymakers.
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