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JULY 14, 2023

RIPPLE’S LEGAL WIN

The cryptocurrency company Ripple Labs, has won a major victory against the Securities and Exchange Commission (SEC) over the sale of its digital token, XRP. U.S. District Judge Analisa Torres ruled that approximately half of Ripple’s sales of XRP did not violate investor-protection laws, supporting Ripple’s argument that XRP is not a security. Nevertheless, the judge also ruled that the other half of Ripple’s sales did constitute an illegal sale of securities. Ripple views the outcome as a major victory for both the company and the crypto industry, as they have resisted SEC oversight. Following these developments, Coinbase shares experienced a substantial increase, but a research report by Berenberg cautioned against overinterpreting the ruling, emphasizing that it primarily pertains to Ripple’s primary market transactions and does not reject the SEC’s argument regarding unregistered securities in secondary-market transactions.

IMPORT PRICES FALL

According to the U.S. Bureau of Labor Statistics, the price index for U.S. imports decreased by 0.2% in June, with lower nonfuel prices offsetting higher fuel prices. This decline marks the fifth out of six months in 2023 where import prices have fallen, after rising by 3.2% in 2022. In addition, the report showed that import fuel prices rose by 0.8% in June, but still experienced a significant 36.4% drop over the past year. For nonfuel imports, prices declined by 0.4% in June, mainly driven by lower prices in various sectors such as industrial supplies, consumer goods, capital goods, food, and automotive vehicles. Moreover, prices for finished goods imports, including consumer goods and capital goods, also declined in June.

MIXED RESULTS

Wells Fargo & Co., JPMorgan Chase & Co., and Citigroup Inc. recently announced their second-quarter results, revealing varying performances among the three major banks. Wells Fargo exceeded analysts’ expectations by reporting $13.2 billion in net interest income (NII), a 29% increase from the previous year. The bank raised its full-year NII guidance and emphasized its focus on controlling expenses. JPMorgan Chase saw a significant 67% jump in profit for the quarter, benefiting from increased interest payments and the acquisition of First Republic Bank. However, the positive trend was not joined by Citigroup as the bank experienced a 36% decline in profit due to weakness in its trading business, offsetting gains in personal banking and wealth management. Additionally, Citigroup reported that market revenues and investment banking fees were notably affected during the second quarter.

STRONG PERFORMANCES

The positive results of the second quarter from JPMorgan and Wells Fargo were joined by impressive performances from BlackRock Inc, the world’s largest asset manager and UnitedHealth Group, a leading health insurer, which showcased strong financial outcomes. BlackRock exceeded profit estimates as its assets under management soared to $9.4 trillion, with net inflows of $80 billion. The firm’s adjusted profit of $9.28 per share surpassed estimates, attributed to increased client consolidation and the popularity of their exchange-traded funds (ETFs). Meanwhile, UnitedHealth surpassed expectations with an adjusted profit of $6.14 per share, effectively managing rising medical costs and meeting increased demand for outpatient services and delayed surgeries.

STUDENT DEBT FORGIVENESS

The Biden administration shared its plans to automatically forgive $39 billion in student debt for approximately 804,000 borrowers. This relief is a result of improvements made to the income-driven repayment plans in the student loan system. Previously, the system failed to accurately track borrowers’ progress towards forgiveness, causing many to fall through the cracks. To rectify this, the administration has now accounted for payments made during deferments, forbearances, and partial or late payments. This announcement comes after the Supreme Court invalidated President Biden’s broader student loan forgiveness proposal.

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