SET FOR APPROVAL
The Securities and Exchange Commission (SEC) is set to approve spot Ethereum exchange-traded funds (ETFs) today, signaling the introduction of a second cryptocurrency investment option that is anticipated to attract significant investor capital. Let’s remember that these proposed funds will track the digital token of the Ethereum blockchain, and are scheduled to start trading next week on the Cboe exchange, where five of the funds will be listed. The SEC is currently evaluating a total of 10 spot Ethereum ETF applications, with leading entities such as BlackRock and Fidelity.
SURPRISE EXIT
President Biden made a surprising announcement yesterday, revealing that he will not seek re-election in 2024. This decision comes after facing pressure from within his own party, particularly following criticisms of his debate performance in June. Biden stated that he believes stepping aside is in the best interest of the Democratic Party and the nation as a whole. Instead, he intends to fulfill the remainder of his current term. The President endorsed Vice President Kamala Harris as the Democratic nominee for the upcoming election, urging Democrats to unite against former President Trump. This unexpected move by Biden has created uncertainty regarding the Democratic Party’s plans for the 2024 election, the upcoming nominating convention, and the impact on financial markets. The decision could potentially result in changes in market dynamics, particularly in terms of assets that were influenced by expectations related to the possibility of Trump returning to office.
CYBERSECURITY CONCERNS
Cybersecurity company CrowdStrike (CRWD) is facing a 5% drop in its stock value as a result of the recent software glitch that caused a global cyber outage affecting millions of Windows devices. This incident has raised concerns about financial repercussions and questions about the reliance on critical software systems. Moreover, despite services gradually being restored, companies are still dealing with delays and backlogs, prompting a discussion on how to prevent such incidents in the future. Furthermore, as a result of the quality assurance issue, CrowdStrike is expected to encounter challenges in securing new deals in the short term. Analysts have adjusted their price targets for the company, leading to a downgrade of the stock by two brokerages. On the other hand, cybersecurity competitors like Palo Alto Network’s (PANW), Sentinel One (S), and Fortinet (FTNT) experienced a stock price increase.
REVENUE MISS
Verizon Communications has revealed that it fell short of revenue expectations in the second quarter due to slow phone upgrades in the U.S., resulting in a 3.4% drop in shares before trading. This is likely because customers are holding on to their phones longer, impacting upgrade rates and revenue. As a result, the company reported revenue of $32.8 billion, below analysts’ estimates. Nonetheless, it is worth noting that despite the challenges, analysts believe upcoming AI features in new iPhone releases could drive growth in the smartphone market. Moreover, Verizon added more bill-paying wireless phone subscribers than expected in the quarter, partially attributed to the success of its myPlan offering. In addition, partnerships with streaming services and pricing adjustments also contributed to Verizon’s strategy in a competitive telecom market. Furthermore, although the company’s consumer business saw losses in wireless retail postpaid phone subscribers, earnings per share met expectations when excluding certain items.
KEY EVENTS HAPPENING THIS WEEK
Tuesday: Existing home sales report for June, S&P flash U.S. services and manufacturing PMI report for July, and earnings reports from General Motors, Coca-Cola, Comcast, UPS, Spotify (before market opens), Alphabet, Tesla and Mattel (after market closes).
Wednesday: New home sales report June, and earnings reports from AT&T (before market opens), Ford, IBM and Chipotle Mexican Grill (after market closes).
Thursday: GDP report for second quarter, durable-goods orders report for June, initial jobless claims report for the week ending on July 20, and earnings reports from Hasbro, Southwest Air and American Airlines (before market opens).
Friday: PCE index report for June, final consumer sentiment report for July, and earnings report from Squibb (before market opens).
