Global economy to slow to lowest level since the 2008 financial crisis: World Bank (3 min read)
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The World Bank projects that global growth will slow to its lowest level since the 2008 financial crisis in 2023 due to higher interest rates, inflation, and more restrictive credit conditions. Global growth is forecasted to decelerate to 2.1% this year from 3.1% in 2022, with a significant slowdown occurring in the second half of the year. However, developed countries like the US and the euro area are expected to retain higher growth than emerging markets. The World Bank warns that it could be even weaker if major central banks raise the rate higher than it is now.

China asks big banks to cut deposit rates again to boost economy (2 min read)
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Chinese authorities have asked its largest banks, including Bank of China, Industrial & Commercial Bank of China, and Bank of Communications, to lower their deposit rates for the second time in less than a year. The request includes reducing rates on a range of deposit products by 5 to 10 basis points. While it is not mandatory, the banks are considering the request and may adjust rates as early as this week. The move aims to stimulate the economy, following recent efforts to lower interest rate ceilings on deposits.

SEC sues Coinbase over exchange and staking programs, stock drops 12% (3 min read)

The SEC has filed a lawsuit against crypto exchange Coinbase, accusing the company of operating as an unregistered broker and exchange. The SEC alleges that Coinbase’s brokerage, staking programs, and certain crypto assets violate securities laws. Following the news, Coinbase shares dropped 12% on Tuesday after falling 9% the previous day when rival crypto exchange Binance faced similar charges from the SEC. Coinbase has previously received a Wells notice from the SEC and has been preparing for potential action of defense.

Merck sues US government to halt Medicare drug price negotiation (2 min read)
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Merck & Co has filed a lawsuit against the U.S. government, seeking to halt the drug price negotiation program outlined in the Inflation Reduction Act (IRA). The company argues that the program, which forces drugmakers to negotiate Medicare drug prices below market rates, violates the Fifth and First Amendments of the U.S. Constitution. The new law aims to save billions of dollars annually for medicines in the US but at the cost of the pharmaceutical industry sales and could result in pull back on developing new treatments.

Long Bond Fund Ranks as 2023’s Most Popular ETF (2 min read)
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Investors are placing significant bets on long bonds, particularly the iShares 20 Plus Year Treasury Bond ETF (TLT), which is the No.1 asset gatherer among US ETFs this year. They expect a rebound in Treasury bond prices after a poor performance in 2022 and so far it has been paid off with TLT up 4.9% this year. The bounce-back is driven by expectations that the Fed will pause hikes or cut rates, which supports long bonds. However, there are still risks involved, like the possibility of bond prices slipping again if the Fed keeps rates at current levels.

Goldman Sachs Plans ETFs Mirroring Popular JPMorgan Strategy (2 min read)
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Goldman Sachs filed to launch two ETFs that utilize options-writing to generate income from a US equity portfolio, with name and strategy similar to the successful JPMorgan Equity Premium Income ETF (JEPI) and JPMorgan Nasdaq Equity Premium Income ETF (JEPQ). Although the filing lacks specific details, it appears the aim is to attract investors from JEPQ and JEPI, one of the most popular active ETFs in the US. While being the first mover in the ETF industry is advantageous, Goldman’s potential better performance and lower costs could sway investors.

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Thomas

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