Market Monitor #3

Markets

Market performance showed a mixed pattern on the conclusion of a highly volatile day yesterday. The Dow Jones Industrial Average continued its ten-day winning streak, the longest since August 2017. On the other hand, the Nasdaq experienced a dip as investors anticipated upcoming changes scheduled for Monday.

A notable event occurred in the trading of meme stock AMC during after-hours, as a Delaware judge surprisingly intervened, stopping the company's divisive plan to split its stock. This move was aimed at preventing dilution of shares for amateur investors who had placed their confidence in the struggling theater chain.

In recent developments, the founder of the digital asset platform FTX, Sam Bankman-Fried, along with some former executives, faces legal action initiated by the company's new management. The main objective of this lawsuit is to recover over $1 billion in company funds.

The defunct crypto exchange has accused these former executives of misappropriating the funds for personal purposes, including a significant donation of $10 million to Bankman-Fried's father. FTX is now concerned that this money might be used to support SBF's legal defense.

Another contentious issue raised by the company is the allocation of $725 million in FTX stock to certain executives without clear justification for the equity they received.

Additionally, FTX claims that a substantial amount of $546.1 million was utilized to acquire a stake in Robinhood, further fueling the controversy surrounding the management of company funds.

Sam Bankman, Fried

The Job Market is Hot!

Last week, there was an unexpected decline in initial claims by 9,000, reaching 228,000, which stands as the lowest level observed in the past two months. This positive development contrasted with the consensus expectation of a 5,000 increase.

On the other hand, continuing claims experienced their most significant surge in over three months. Despite this, the overall data indicates ongoing strength and resilience in the labor market.

Recession!

The Conference Board's leading indicators are strongly signaling an impending recession.

In June, the Leading Economic Index (LEI) experienced its 15th consecutive month of decline, dropping by 0.7%.

Economists had anticipated a smaller decrease of 0.6%.

The year-on-year decrease in the LEI stands at 7.8%, which closely aligns with a significant 20% decline in S&P earnings.

This decline in the leading indicators can be attributed to various factors, including pessimistic consumer expectations, a softening in new orders, an increase in initial jobless claims, and a slowdown in housing construction.

Market Recap:

Last Week's Economic Insights

I'm sought after by traders, investors, and banks,

In bull markets, my value steadily ranks.

My name's derived from a mystical breed,

In finance, I'm crucial, a vital need.

So You Think You Know Finance?

Last Week's Answer:

Diversification